Incorporation of company and matters incidental there to mode of forming incorporated company effect of failure to register

Companies Act – PART II
INCORPORATION OF COMPANY AND MATTERS INCIDENTAL THERE TO

Certain companies, associations and partnerships to be registered, as companies under Act.

11.Prohibition of associations and partnerships exceeding certain number.
1)No company, association or partnership consisting of more than ten persons shall be formed for the purpose of carrying on the business of banking, unless it is registered as a company under this Act, or is formed in pursuance of some other Indian law.
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1.Subs. by Act 46 of 1977, s. 2, for the words and figures “Chapter XXXV of the Code of Criminal Procedure, 1898”.
2.Subs. by Act 31 of 1988, s. 4 (w.e.f.31-5-1991).
3.Ins. by s. 5, ibid. (w.e.f. 31-5-1991).
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2)No company, association or partnership consisting of more than twenty persons shall be formed for the purpose of carrying on any other business thathasfor its object the acquisition of again by the company, association or partnership, or by the individual members thereof, unless it is registered as a company under this Act, or is formed in pursuance of some other Indian law.
3)This section shall not apply to a joint family as such carryingon a business; and where a business is carried on by two or morejointfamilies,in computing the numberofpersonsforthe purposesof sub-sections (1) and (2), minor members of suchfamilies shall be excluded.
4)Every member of a company, association or partnership carrying on business in contravention of this section shall be personally liable for all liabilities incurred in such business.
5)Every person who is a member of a company, association or partnership formed in contravention of this section shall be punishable with fine which may extend to one thousand rupees.
MEMORANDUM OF ASSOCIATION
12.Mode of forming incorporated company.
1)Any sevenormore persons, or where the company to be formed will be a privatecompany, anytwoor more persons, associated for any lawful purposemay,by subscribingtheir names to a memorandum of association andotherwise complyingwiththe requirements of this Act in respect of registration, form an incorporated company, with orwithout limited liability.
2)Such a company may be either –
(a)a company having the liability of its members limited by thememorandum to the amount, if any, unpaid on the shares respectively heldby them (in this Act termed “a company limited by shares”
(b)a company having the liability of its members limited by the memorandum to such amount as the members may respectively undertakeby the memorandum to contribute to theassetsof the company in the event of its being wound up (in thisAct termed “a company limited byguarantee”);
(c)a company not having any limit on the liability ofits members (in this Act termed ” an unlimited company”).
13.Requirements with respect to memorandum.
1)The memorandum of every company shall state –
(a)the name of the company with “Limited” as the lastword of the name in the case of a public limited company, and with “Private Limited” as the last word of the name in the case of a private limited company;
(b)the State in which the registered office of the company is to be situate
(c)in the case of a company in existence immediately before thecommencement of the Companies (Amendment) Act, 1965, the objects of the company ;
(d)in the case of a company formed after such commencement –
(i)the main objects of the company to bepursued by the company on its incorporation and objects incidental or ancillary to the attainment of the main objects;
(ii)other objects of the company not included in sub-clause (i); and
(e)in the case of companies (other than trading corporations), with objects not confined to one State, the States to whose territories the objects extend.
2)Thememorandumofacompanylimitedbysharesorby guaranteeshallalsostate that the liabilityofitsmembersis limited.
3)Thememorandum of a company limited by guaranteeshallalso statethat each member undertakes to contribute to the assets of the company in the event of its being wound up while he is a member or within oneyear after he ceases to be a member, for payment of the debts and liabilities of the company, or of such debts and liabilities of the company as may have been contracted before he ceases tobe a member, as the case may be, and of the costs, charges and expenses of winding up,and for adjustment of the rights of the contributories among themselves,such amount as may be required, not exceeding a specified amount.
4)In the case of a company having a share capital –
(a)unless the company is an unlimited company, the memorandum shall also state the amount of share capital with which thecompany is to be registered and the division thereof into shares of a fixed amount;
(b)no subscriber of the memorandum shall take less than one share; and
(c)each subscriber of the memorandum shall writeopposite to his name the number of shares he takes.
14.Form of memorandum.
The memorandum of association of a company shall be in such one of the Forms in Tables B, C, D and E in Schedule I as may be applicable to the case of the company, or in a Form as near thereto as circumstances admit.
Printing and signature of memorandum
15.Printing and signature of memorandum.
The memorandum shall –
(a)be printed,
(b)be divided into paragraphs numbered consecutively, and
(c)be signed by each subscriber (who shall add his address, description and occupation, if any,) in the, presence ofat least one witness who shall attest the signatureand shall likewise add his address, description andoccupation, if any.
15A.Special provision as to alternation of memorandum consequent on alteration of name of State of Madras. 1[15A.Special provision as to alternation ofmemorandum consequent on alteration o
15B.Special provision as to alternation of memorandum consequent on alteration of name of State of Mysore. 1[15B.Special provision as to alteration of memorandum consequent on alteration of name of State of Mysore. Where, in the memorandum of association of a companyinexistenceimmediatelybefore the commencement of the Mysore State (Alteration of Name) Act, 1973 (31 of 1973),it is stated that Mysore is the State in which theregistered officeofthat company is situate,then, notwithstandinganything containedinthisAct, the said memorandum shall, as from such commencement, be deemed to have been altered by substitution of a reference to the State of Karnataka for the reference to the State of Mysore and the Registrar of the State of Karnatakashallmake necessaryalterationsinthememorandumofassociationandthe certificate of incorporation of the said company.
16.Alteration of memorandum.
1)A company shall not alter the conditions contained in its memorandum except in the cases, in the mode, and to the extent, for which express provision is made in this Act.
2)Only those provisions which are required by section 13 or by any other specific provision contained in this Act, to be stated in the memorandum of the company concerned shall be deemed to be conditions contained in its memorandum.
3)Other provisions contained in the memorandum, including thoserelating to the appointment of a managing director, managing agent,secretaries and treasurers or manager, may be alteredinthe same mannerasthe articles of the company, but ifthereisany expressprovision in this Act permitting of the alteration of such provisions in any other manner, they may also be altered in such other manner.
4)All references to the articles of a company in this Act shall be construed as including references to the other provisions aforesaid contained in its memorandum.
17.Special resolution and confirmation by Company Law Board required for alternation of memorandum.
1)A company may, byspecial resolution, alter the provisions of its memorandum so as to change the placeofits registered office from one State toanother,orwith respecttothe objects of the company so far as may berequiredto enable it –
(a)to carry on its business moreeconomically or more efficiently;
(b)to attain its main purpose by new or improved means;
(c)to enlarge or change the local area of its operations;
(d)to carry on some business which under existing circumstances may conveniently or advantageously becombined with the business of the company;
(e)to restrict or abandon any of the objects specified in the memorandum;
(f)to sell or dispose of the whole, or anypart, ofthe undertaking, or of any of the undertakings, of thecompany; or
(g)to amalgamate with any other company or body of persons.
2)The alteration shall not take effect until, and except in so far as, it is confirmed by the 1[Company Law Board] on petition.
3)Before confirming the alteration, the 1[Company Law Board] must be satisfied –
(a)that sufficient notice has been given to every holderof thedebentures of the company, and to every other personor class of persons whose interests will, in the opinion ofthe 1[Company Law Board], be affected by the alteration; and
(b)that, with respect to every creditor who, in theopinion ofthe1[Company Law Board], is entitled to objecttothe alteration,andwho signifies his objection inthemanner directedby the 1[Company Law Board], either his consentto thealterationhas been obtained or his debt orclaimhas been discharged or has determined, or has been secured to the satisfaction of the 1 [Company Law Board] :
Provided that the 1[Company Law Board] may, in the case of any person or class of persons, for special reasons, dispense with the notice required by clause (a).1[(4) The 2[Company Law Board] shall cause notice of the petition for confirmation of the alteration to be served on the Registrar who shall also be given a reasonable opportunity to appear before the 2[Company Law Board] and state his objections and suggestions, if any, with respect to the confirmation of the alteration.]
5)The 2[Company Law Board] may make an order confirming the alteration either wholly or in part, and on such terms and conditions, ifany, as it thinks fit, and may make such order as to costsasit thinks proper.
6)The 2[Company Law Board] shall, in exercising itspowers underthissection, have regard to the rights and interestsofthe members of the company and of every class of them, as well as to the rightsandinterests of the creditors of the companyandofevery class of them.
7)The 2[Company Law Board] may, if it thinks fit, adjourn the proceedings in order that an arrangement may be made to the satisfaction of the 2[Company Law Board] for the purchase of the interests of dissentient members; and may give such directions and make such orders as it thinks fit for facilitating, or carrying into effect, any such arrangement:
Provided that no part of the capital of the company may be expended in any such purchase.
Alternation to be registered within three months
18.Alternation to be registered within three months.
3[(1)A certifiedcopyof the order of the 2[Company Law Board]madeunder sub-section (5) of section 17 confirming the alteration, together with aprinted copy of the memorandum as altered,shall,withinthree monthsfrom the date of the order, be filed by the companywiththe Registrarwhoshall register the same and certifytheregistration underhis hand within one month from the date of the filingofsuch documents.
2)The certificate shall be conclusive evidence that all the requirements of this Act with respect to the alteration and the confirmation thereof have been complied with, and thenceforth the memorandum as so altered shall be the memorandum of the company.
3)Wherethealteration involves a transfer oftheregistered office from, one state to another, a certified copy of the confirmingthe alterationshall be filed by the companywiththe Registrar of each of the States, and the Registrar of each suchState shallregister thesame, and shallcertifyunderhis handthe registrationthereof; and the Registrar of the State from which such officeis transferred shall send to the Registrar of the other State all documents relating to the company registered, recorded or filed in his office.
4)The 1[Company Law Board] may, at any time, by order, extend the time for the filing of documents 2[or for the registration of the alteration] under this section by such period as it thinks proper.
19.Effect of failure to register.
1)No such alteration as is referred to in section 17 shall have any effect until it has been duly registered in accordance with the provisions of section 18.
2)If the documents required to be filed withtheRegistrar undersection 18 are not filed within the time allowed under that section, suchalteration and the order of the 1[CompanyLawBoard] made under sub-section (5) of section 17 and all proceedings connected therewith,shall,atthe expiry of suchperiod,becomevoidand inoperative :
Provided that the 1[Company Law Board] may, on sufficient cause shown, revive the order on application made within a further period of one month.] Provisions with respect to names of
20.Companies not to be registered with undesirable names.
1)No company shall be registered by a name which, in the opinion of the Central Government, is undesirable.
2)Without prejudice to the generality of the foregoing power, a name which is identical with, or too nearly resembles, the name by which a company in existence has been previously registered, may be deemed to be undesirable by the Central Government within the meaning of sub-section (1).
21.Change of name by company.
A company may, by special resolution and with the approval of the Central Government signified in writing, change its name:
[Provided that no such approval shall be required where the only change in the name of a company is the addition thereto or, as the case may be, the deletion there from, of the word “Private”, consequent on the conversion in accordance with the provisions of this Act of a public company into a private company or of a private company into a public company.]
22.Rectification of name of company.
1)If, through inadvertence or otherwise, a company on its first registration or on its registration by a new name, is registered by a name which, in the opinion of the Central Government, is identical with, or too nearly resembles, the name by which a company in existence has been previously registered, whether under this Act or any previous companies law, the first mentioned company –
(a)may by ordinary resolution and with the previous approval ofthe Central Government signified in writing,changeits name or new name; and
(b)shall, if the Central Government so, directs withintwelve monthsof its first registration or registration by itsnew name,asthe case may be, or within twelvemonthsofthe commencementofthis Act, whichever is later, by ordinary resolution and with the previous approval of the Central Government signified in writing, change its name or newname within a period of three monthsfromthe date of the direction or such longer period as the Central Government may think fit to allow.
2)If a company makes default in complying with any direction given under clause (b) of sub-section (1), the company, and every officer who is in default, shall be punishable with fine which may extend to one hundred rupees for every day during which the default continues.
23.Registration of change of name and effect thereof.
1)Where a company changes its name in pursuance of section 21 or 22, the Registrar shall enter the new name on the Register in the place of the former name, and shall issue a fresh certificate of incorporation with the necessary alterations embodied therein; and the change of name shall be complete and effective only on the issue of such a certificate.
2)The Registrar shall also make the necessary alteration in the memorandum of association of the company.
3)The change of name shall not affect any rights or obligations of the company, or render defective any legal proceedings by or against it; and any legal proceedings which might have been continued or commenced by or against the company by its former name may be continued by or against the company by its new name
Change of existing private limited companies
24.Change of existing private limited companies.
1)In the case of a company which was a private limited companyimmediatelybefore thecommencementofthis Act, the Registrar shallenter the word ‘Private’before the word ‘Limited’ in the name of thecompany upon the register and shall also make the necessaryalterationsinthe certificateofincorporationissuedtothecompanyandinits memorandum of association.
2)Sub-section (3) of section 23 shall apply to a change of name under sub-section (1), as it applies to a change of name under section 21.
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*In its application to Government Companies section 23 shall be read along with the following sub-section:-
“(1A)Where the change in the name of aGovernmentCompany consists only in the deletion of the word “Private” there from, thatGovernment Company shall, not later thanthreemonths fromthe date there of, inform the Registrar ofthe aforesaid changeandthereupon the Registrar shalldeletetheword ‘Private’beforetheword ‘Limited’ inthenameofthe Companyupon the register and shall also make thenecessary alterations in the certificate of incorporation issued to the company”:
Vide Notifn.No.(GSR 1649 dt. 13.11.1965, Gaz.of India,Pt.II, Sec.3(i), p-1733-34 (issued under s. 620).
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25.Power to dispense with “Limited” in name of charitable or other company.
1)Where it is proved to the satisfaction of the Central Government that an association –
(a)is about to be formed as a limited company for promoting commerce, art, science, religion, charity or any other useful object, and
(b)intends to apply its profits, if any, or other income in promotingits objects, and to prohibit the payment of any dividend to its members, theCentral Government may, by licence, direct thattheassociation mayberegistered as a company with limited liability,withoutthe additiontoits name of the word ” Limited” orthewords”Private Limited”.
2)The association may thereupon be registered accordingly; and on registration shall enjoy all the privileges, and (subject to the provisions of this section) be subject to all the obligations, of limited companies.
3)Where it is proved to the satisfaction of the Central Government –
(a)that the objects of a company registered under this Act as a limited company are restricted to those specified in clause (a) of sub-section (1); and
(b)that by its constitution the company is required to apply its profits, if any, or other income in promoting its objects and is prohibited from paying any dividend to its members, the Central Government may, by licence, authorise the companyby a special resolution to change its name, including orconsistingof theomission of the word “Limited” or the words “PrivateLimited”; and section 23 shall apply to a change of name under thissub-section as it applies to a change of name under section 21.
4)A firm may be a member of any association or company licensed under this section, but on the dissolution of the firm, its membership of the association or company shall cease.
5)A license may be granted by the Central Government under this section on such conditions and subject to such regulations as it thinks fit, and those conditions and regulations shall be binding on the body to which the license is granted, and where the grant is under sub-section (1), shall, if the Central Government so directs, be inserted in the memorandum, or in the articles, or partly in the one and partly in the other.
6)It shall not be necessary for a body to which a license is so granted to use the word “Limited” or the words “Private Limited” as any part of its name and, unless its articles otherwise provide, such body shall, if the Central Government by general or special order so directs and to the extent specified in the direction, be exempt from such of the provisions of this Act as may be specified therein.
7)The license may at any time be revoked by the Central Government, and upon revocation, the Registrar shall enter the word “Limited” or the words “Private Limited” at the end of the name upon the register of the body to which it was granted; and the body shall cease to enjoy the exemption granted by this section:
Provided that, before a license is so revoked, the Central Government shall give notice in writing of its intention to the body, and shall afford it an opportunity of being heard in opposition to the revocation.
8)(a)A body in respect of which a license under this section isinforce shall not alter the provisions of its memorandum with respect to itsobjects except with the previousapproval of the Central Government signified in writing.
(b)The Central Government may revoke the license of such a body if it contravenes the provisions of clause (a).
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1.Subs. by Act 65 of 1960 s. 9, for sub-section (6).
2.Subs. by s. 9, ibid., for sub-section (8).
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(c)In according the approval referred to in clause (a), the CentralGovernment may vary the license by making it subject to suchconditions and regulations as that Government thinks fit, in lieuof, orin addition to, the conditions and regulations, if any,towhich the license was formerly subject.
(d)Wherethealterationproposedintheprovisionsofthe memorandumofa body under this sub-section is with respect to the objectsof the body so far as may be required to enable it to do any ofthe things specified in clauses (a) to (g) of sub-section(1)of section17, the provisions of this sub-section shall beinaddition to, and not in derogation of, the provisions of that section.]
9)Upon the revocation of a license granted under thissection to a body the name of which contains the words “Chamber ofCommerce”, that bodyshall,withinaperiodof three months from the date of revocationor such longer period as the Central Government maythink fitto allow, change its name to a name which does not containthose words; and –
(a)the notice to be given under the provisotosub-section(7) to that body shall include a statement of the effect of the foregoing provisions of this sub-section; and
(b)section 23 shall apply to a change of name under this sub-sectionas it applies to a change of name undersection 21.
10)If the body makes default in complying with the requirements of sub-section (9),it shall be punishable with fine which may extend to fivehundredrupeesfor everydayduringwhichthedefault continues.
Incorporation of Company and Matters Incidental thereto
Articles of Association.
26.Articles prescribing regulations.
There may in the case of a public company limited by shares, and there shall in the case of an unlimited company or a company limited by guarantee or aprivate company limited by shares, be registered with the memorandum, articles of association signed by the subscribers of the memorandum, prescribing regulations for the company.
27.Regulations required in case of unlimited company, company limited by guarantee or private company limited by shares.
1)In the case of an unlimited company, the articles shall state the number of members with which the company is to be registered and, if the company has a share capital, the amount of share capital with which the Company is to be registered.
2)In the case of a company limited by guarantee, the articles shall state the number of members with which the company is to be registered.
3)In the case of a private company having a share capital, the articles shall contain provisions relating to the matters specified in sub-clauses (a), (b) and (c) of clause (iii) of sub-section (1) of section 3; and in the case of any other private company, the articles shall contain provisions relating to the matters specified in the said sub-clauses (b) and (c).
28.Adoption and application of Table A in the case of companies limited by shares.
1)The articles of association of a company limited by shares may adopt all or any of the regulations contained in Table A in Schedule I.
2)In the case of any such company which is registered after the commencement of this Act, if articles are not registered, or if articles are registered, in so far as the articles do not exclude or modify the regulations contained in Table A aforesaid, those regulations shall, so far as applicable, be the regulations of the company in the same manner and to the same extent as if they were contained in duly registered articles.
29.Form of articles in the case of other companies.
The articles ofaassociationof any company, not beingacompanylimitedby shares,shallbe in such one of the Forms in Tables C, D and E in Schedule I as may be applicable, or in a Form asneartheretoas circumstances admit:
[Provided that nothing in this section shall be deemed to prevent a company from including any additional matters in its articles in so far as they are not inconsistent with the provisions contained in the Form in any of the Tables C, D and E, adopted by the company.]
30.Form and signature of articles.
Articles shall –
a)be printed;
b)be divided into paragraphs numbered consecutively ; and
c)be signed by each subscriber of the memorandum of association (whoshall add his address, description and occupation, if any,) in the presence of at least one witnesswho shallattestthesignatureandshalllikewiseaddhis address, description and occupation, if any.
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1.Ins. by Act 65 of 1960, s. 10.
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Alteration of articles by special resolution
31.Alteration of articles by special resolution.
1)Subject to the provisions of this Act and to the conditions contained in its memorandum, a company may, by special resolution, alter its articles:
1[Provided that no alteration made in the articles under this subsection which has the effect of converting a public company into a private company, shall have effect unless such alteration has been approved by the Central Government.]
2)Anyalterationso made shall, subject to theprovisionsof thisAct, be as valid as if originally contained in the articles and be subject in likemanner to alteration by special resolution.1[(2A) Where any alteration such as is referred to in the provision to sub-section(1) has been approved by theCentralGovernment, a printed copy of the articles as altered shall be filed by thecompany withthe Registrar within one month of the date of receipt of the order of approval.]
3)The power of altering articles under this section shall, in the case of any company formed and registered under Act No. 19 of 1857 and Act No. 7 of 1360 or either of them, extend to altering any provisions in Table B annexed to Act 19 of 1857, and shall also, in the case of an unlimited company formed and registered under the said Acts or either of them, extend to altering any regulations relating to the amount of capital or its distribution into shares,notwithstanding that those regulations are contained in the memorandum.
Change of registration of companies
32.Registration of unlimited company as limited, etc.
1)Subject to the provisions of this section –
(a)a company registered as unlimited may register underthis Act as a limited company; and
(b)a companyalready registered as a. limitedcompanymay re-register under this Act.
2)On registration pursuance of this section, the Registrar shall close the former registration of the company, and may dispense with the delivery to him of copies of any documents with copies of which he was furnished on the occasion of the original registration of the company; but, save as aforesaid, the registration shall take place in the same manner and shall have effect, as if it were the first registration of the company under this Act.
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1.Ins. by Act 65 of 1960, s. 11.
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3)The registration of an unlimited company as a limited company under this section shall not affect any debts, liabilities, obligations or contracts incurred or entered into, by, to, with or on behalf of, the company before the registration, and those debts, liabilities, obligations and contracts may be enforced in the manner provided by Part IX of this Act in the case of a company registered in pursuance of that Part.
33.Registration of memorandum and articles.
1)There shall be presented for registration, to the Registrar of the State in which the registered office of the company is stated by the memorandum to be situate –
(a)the memorandum of the company;
(b)its articles, if any ; and
(c)the agreement, ifany, which the company proposes to enterintowithanyindividualforappointment asits managing or whole-time director or manager.]
2)Adeclaration by an advocate of the Supreme Court or of a High Court, an attorney or a pleader entitled to appear before a High Court or 2[“a secretary or achartered accountant, in whole-time practice in India”] who is engaged in the formation of a company, or by a person named in the articles as a director, manager or secretary of the company, that all the requirements of this Act and the rules there under have been complied with in respect of registration and matters precedent andincidental thereto, shall be filed with the Registrar; and the Registrar may accept such a declaration as sufficient evidence of such compliance.
3[Explanation.- For the purposes of this sub-section, “chartered accountant in whole-timepractice in India” means a chartered accountant within the meaning of clause (b) ofsub-section (1) of section 2 of the Chartered Accountants Act, 1949 (38 of 1949), whois practicing in India and who is not in fulltime employment.]
3)IftheRegistrar is satisfiedthat all the requirements aforesaidhavebeencomplied with bythe company andthat it is authorised to beregistered under this Act,heshallretainand registerthememorandum,the articles, if any, andthe agreement referred to in clause (c) of sub-section (1), if any.
34.Effect of Registration.
1)On the registration of the memorandum of a company, the Registrar shall certify under his hand that the company is incorporated and, in the case of a limited company, that the company is limited.
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1.Subs. by Act 31 of 1988, s.6 (w.e.f. 15-6-1988).
2.Omitted by s.6, ibid. (w.e.f. 15-6-1988).
3.Added by s.6, ibid (w.e.f. 15-6-1988).
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2)From the date of incorporation mentioned in the certificate of incorporation, such of the subscribers of the memorandum andother persons, as may from time to time be members of the company, shall be abody corporate by the name contained in the memorandum, capable forthwith of exercising all the functions of an incorporatedcompany, andhavingperpetualsuccession and a common seal, but with such liability on the part of the members to contribute to theassetsof the company in the event of its being wound up as is mentioned in this Act.
35.Conclusiveness of certificate of incorporation.
A certificate of incorporation given by the Registrar in respect of any association shall be conclusive evidence that all the requirements of this Act have been complied with in respect of registration and matters precedent and incidental thereto, and that the association is a company authorized to be registered and duly registered under this Act.
36.Effect of memorandum and articles.
1)Subject to the provisions of this Act, the memorandum and articlesshall,when registered, bind the company and the members thereof to thesame extent as if they respectively had been signed by the company andby each member, and contained covenants on its and his part toobserve all the provisions of the memorandum and of the articles.
2)All money payable by any member to the company under the memorandum or articles shall be a debt due from him to the company.
37.Provision as to companies limited by guarantee.
1)In the case of a company limited by guarantee and not having a share capital, and registered on or after the first day of April,1914, every provision in the memorandum or articles or in any resolution of the company purporting to give any person a right to participate in thedivisible profits of the company otherwise than as a member shall be void.
2)Forthe purpose of the provisions of this Act relating to the memorandum of a company limited by guarantee and of this section, everyprovision in the memorandum or articles, or in anyresolution, ofanycompany limited by guarantee and registered on or after the first day of April, 1914, purporting to divide the undertaking ofthe company into shares or interests, shall be treated as a provision for a share capital, notwithstanding that the nominal amount or number of the shares or interests is not specified thereby.
38.Effect of alteration in memorandum or articles.
Notwithstanding anything in the memorandum or articles of a company, no member of the company shall be bound by an alteration made in thememorandum or articles after the date on which he became a member, if and so faras the alteration requires him to take or subscribe for more sharesthan the number held by him at the date on which the alteration is made, or inany way increases his liability as at that date, to contribute to the share capital of, or otherwise to pay money to, the company:
[Provided that this section shall not apply –
a)in any case where the member agrees in writing either before or after a particular alteration is made, to bebound by the alteration; or
b)in any case where the company is a club or the companyis any other association and the alteration requires themember to pay recurring or periodical subscriptions or charges ata higher rate although he does not agree in writing to be bound by the alteration.]
39.Copies of memorandum and articles, etc, to be given to members.
1)A company shall, on being so required by a member, send to him within seven days of the requirement and subject to the payment of a fee of one rupee, a copy each of the following documents as in force for the time being-
(a)the memorandum;
(b)the articles, if any;
(c)the agreement, if any, entered into or proposed to be entered into, by the company with any person appointed or to be appointed as its managing agent or as its secretaries and treasurers; and
(d)every other agreement and every resolution referred to in section 192, if and in so far as they have not been embodied in the memorandum or articles.
2)If a company makes default in complying with the requirements of this section, the company, and every officer of the company who is in default, shall be punishable, for each offence, with fine which may extend to fifty rupees.
40.Alteration of memorandum or articles, etc., to be noted in every copy.
1)Wherean alteration is madeinthememorandumor articles of a company, in the agreement referred to in clause (c) of sub-section(1) of section 39 or in any other agreement, orany resolution, referred to in section 192, every copy of thememorandum, articles,agreementorresolution issued afterthedateofthe alteration shall be in accordance with the alteration.
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1.Subs. by Act 65 of 1960, s. 12, for the proviso.
2)If, at any time, the company issues any copies of thememorandum, articles, resolution or agreement, which are not in accordance with the alteration or alterations made therein before that time,the company, and every officer of the company who is in default, shallbe punishablewith fine which may extend to ten rupees for each copyso issued.
Membership of company
41.Definition of “member”.
1)The subscribers of the memorandum of a company shall be deemed to have agreed to become members of the company, and on its registration, shall be entered as members in its register of members.
2)Every other person who 1[agrees in writing] to become a member of a company and whose name is entered in its register of members, shall be a member of the company.
3)Every person holding equity share capital or companyand whose name is entered as beneficial owner in the records of the depository shall be deemed to be a members of the concerned company.]
42.Membership of holding company.
1)Except in the cases mentioned in this section, a body corporate cannot be a member of a company which is its holding company and any allotment or transfer of shares in a company to its subsidiary shall be void.
2)Nothing in this section shall apply –
(a)where the subsidiary is concerned as the legal representative of a deceased member of the holdingcompany; or
(b)wherethe subsidiary is concerned as trustee, unless the holding company or a subsidiary thereof is beneficially interested under the trust and is not so interested onlyby way ofsecurity for the purposes of a transactionentered into by it in the ordinary course of a business which includes the lending of money.
3)This section shall not prevent a subsidiary from continuing to be a member of its holding company if it was a member thereof either at the commencement of this Act or before becoming a subsidiary of the holding company, but, except in the cases referred to in sub-section (2), the subsidiary shall have no right to vote at meetings of the holding company or of any class of members thereof.
4)Subject to sub-section (2), sub-sections (1) and (3)shall applyinrelation to a nominee for a bodycorporate which is a subsidiary,as if references in the said sub-sections (1) and (3)to such a body corporate included references to a nominee for it.
5)In relation to a holding company which is either acompanylimitedby guarantee or an unlimited company, the reference in this section to shares shall, whether or not the company has ashare capital, be construed as including a reference to the interest ofits members as such, whatever the form of that interest.
Private companies
43.Consequences of default in complying with conditions constituting a company a private company.
Where thearticlesofa companyincludetheprovisions which, under clause(iii)ofsub-section (1) of section 3, are required to be included in the articles of a company in order to constitute it a private company, but default is made in complying with any of those provisions, the companyshall cease to be entitled to the privileges and exemptionsconferred on private companies by or under this Act, and this Act shall apply to the company as if it were not a private company:
Provided that the 1[Company Law Board] on being satisfiedthat the failure to comply with the conditions was accidental or due to inadvertenceor to some other sufficient cause, or that on other groundsitisjustand equitable tograntrelief,may,onthe application of the company or any other person interested and onsuch terms andconditions as seem to the 1[Company LawBoard]justand expedient, order that the company be relieved from suchconsequences as aforesaid.
43A.Private company to become public company in certain cases.
1)Save as otherwise provided in this section, where not less than twenty-five per cent.of the paid-up sharecapital of a private companyhavinga share capital, is held by one or morebodies corporate, the private company shall –
(a)on and from the date on which the aforesaid percentageis first held by such body or bodies corporate, or
(b)wheretheaforesaid percentage has beenfirstsoheld beforethecommencement of the Companies(Amendment)Act, 1960 (65 of 1960),onandfrom the expiry of the period of three months from the date of such commencement unless within that period the aforesaid percentage is reduced belowtwenty-five per cent. of the paid-up share capital of the private company, become by virtue of this section a public company:
Providedthateven after the private company hassobecomea public company, its articles of association may includeprovisions relatingto the matters specified in clause (iii) of sub-section(1) of section 3 and the number of its members may be, or may at anytime be reduced, below seven
Providedfurtherthat in computingtheaforesaidpercentage, account shall not be taken of any share in the private company held by abankingcompany,if, but only if, thefollowingconditionsare satisfied in respect of such share, namely –
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1.Subs. by Act 31 of 1988, s. 67 (w.e.f. 31-5-1991).
2.Ins. by Act 65 of 1960, s.14.
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(a)that the share –
(i)forms part of the subject-matter of a trust,
corporate, and
(ii)has not been set apart for the benefit of any body
(iii)is held by the banking company either as atrusteeof that trust or in its own name on behalf of a trustee ofthat trust; or
(b)that the share-
(i)forms part of the estate of a deceased person,
has not been bequeathed by the deceased personbyhis will to any body corporate, and
(iii)is held by the banking company either as an executor or administrator of the deceased person or in its ownname on behalfof anexecutor or administrator of the deceased person; and the Registrar may, for the purpose of satisfying himself thatany shareisheldintheprivate companybyabankingcompanyas aforesaid, call for at any time from the banking companysuchbooks and papers as he considers necessary.
1[Explanation.- For the purposes of this sub-section, “bodies corporate” meanspublic companies, or private companies which had become public companies by virtue of this section.]
2[(1A) Without prejudice to the provisions of sub-section (1), where the average annual turnover of a private company, whether in existence at the commencement of the Companies (Amendment) Act,
1974,(41of 1974)or incorporated thereafter, is not,duringthe relevant period 1[less than such amount as may be prescribed] the private company shall, irrespective of its paid-up share capital, become, on and from the expiry of a period of three months from the last day of therelevantperiod during which the private companyhadthesaid averageannualturnover,a public company by virtueofthissubsection :
Provided that even after the private company has so become a public company, its articles of association may include provisions relating to the matters specified in clause (iii) of sub-section (1) of section 3 and the number of its members may be, or may at any time be reduced, below seven.
(1B)Where not less than twenty-five per cent ofthepaid-up share capital of a public company, having share capital, is held by a private company, the private company shall –
(a)on and from the date on which the aforesaidpercentage is first held by it after the commencement of the Companies (Amendment) Act, 1974, (41 of 1974), or
(b)wheretheaforesaid percentage has beenfirstsoheld beforethe commencement of the Companies (Amendment)Act, 1974,( 41 of 1974)on and fromthe expiry of the periodof threemonths fromthe date of such commencement, unless within that period the aforesaid percentage is reducedbelow twenty-fiveper cent. of the paid-up sharecapitalofthe public company, become, by virtue of this sub-section, a public company, and thereupon all other provisions of this section shall apply thereto :
Providedthateven after the private company hassobecomea publiccompany,its articles of association mayincludeprovisions relating to the matters specified inclause (iii) of sub-section(1) of section 3 and the number of its members may be, or may at anytime be reduced, below seven.]
1C)Where, after the commencement of the Companies (Amendment) Act, 1988,(31 of 1988) a private company accepts, after an invitation is made by an advertisement, or renews, deposits from the public, other than its members, directors or their relatives,such private company shall, on and from the date on which such acceptance or renewal, as the casemay be, is first made after such commencement, become a public company andthereuponall the provisions of this section shall apply thereto:
Provided that even after the private company has so become a public company, its articles of association may include provisions relating to the matters specified in clause (iii) of sub-section (1) of section 3 and the number of its members may be, or may at any time be, reduced below seven.]
2)Within three months from the date on which a private company becomes a public company by virtue of this section, the company shall inform the Registrar that it has become a public company as aforesaid, and thereupon the Registrar shall delete the word “Private” before the word “Limited” in the name of the company upon the register and shall also make the necessary alterations in the certificate of incorporation issued to the company and in its memorandum of association.
3)Sub-section (3) of section 23 shall apply to a change of name under sub-section (2) as it applies to a change of name under section 21.
4)A private company which has become a public company by virtue of this section shall continue to be a public company until it has, with the approval of the Central Government and in accordance with the provisions of this Act, again become a private company.
5)If a company makes default in complying with sub-section (2), the company and every officer of the company who is in default, shall be punishable with fine which may extend to five hundred rupees for every day during which the default continues.
8)Every private company having a share capital shall, in addition to the certificate referred to in sub-section (2) of section 161, file with the Registrar along with the annual return a second certificate signedby both the signatories ofthereturn, stating either-
(a)thatsince the date of the annual general meetingwith referenceto which the last return was submitted, or inthe caseof a first return, since the date of theincorporation ofthe private company, no body or bodies corporatehasor have held twenty-five per cent. or more of its paid-up share capital
2[(c)that the private company, irrespective of its paid-up share capital, did not have, during the relevant period, an average annual turnover of 3[such amount as is referred to in such-section (1A) or more.]]
4[“(d)that the private company did not accept or renew deposits from the public.]
2[(9)Every private company, having share capital, shall file with the Registrar along with the annual return a certificate signed by both the signatoriesof the return, stating that since thedateofthe annual generalmeeting with reference to which the lastreturnwas submitted,orin the case of a first return, since the dateofthe incorporation of the private company, it didnot hold twenty-five percent or moreof the paid-up share capital of oneormorepublic companies.
4[(10)Subject to the otherprovisions ofthisAct,any reference in this section to accepting, after an invitation is made by an advertisement, orrenewing deposits fromthepublicshallbe construedas including a reference to accepting, after an invitation is made by an advertisement, or renewing deposits from any sectionofthepublic and the provisions of section 67 shall, so far as may be, apply, as if the reference to invitation to the public tosubscribe for shares or debentures occurring in that section, includes a reference to invitation from the public for acceptance of deposits.]
Explanation.-For the purposes of this section –
(a)”relevant period” means the period of three consecutive financial years –
(i)immediately preceding the commencement of the Companies (Amendment) Act, 1974, (41 of 1974), or
(ii)a part of which immediately preceded such commencement and the other part of which immediately, followed such commencement, or
(iii)immediately following such commencement or at anytime thereafter;
(b)”turnover”,of a company, means the aggregatevalueof the realization made from the sale, supply or distribution of goods or on account of services rendered, or both,bythe company during a financial year.]
1[“(c)”deposit” has the same meaning as in section 58A.]
44.Prospectus or statement in lieu of prospectus to be filed by private company on ceasing to be private company.
1)If a company, being a private company, alters its article in such a manner that they nolongerinclude the provisions which, under clause (iii)ofsub-section (1) of section 3, are required tobe included in the articles of a company in order to constitute it a private company, the company –
(a)shall, as on the date of the alteration, cease to be a private company; and
(b)shall, within a period of 2[thirty] days after the said date, file with the Registrar either a prospectus or a statement in lieu of prospectus, as specified in sub-section (2).
(2)(a)Every prospectus filed under sub-section (1) shall state the matters specified in Part I of Schedule II and set out the reports specifiedinPart II of that Schedule, and the said Parts IandII shallhave effect subject to the provisions contained in Part III of that Schedule.
(b)Every statement in lieu of prospectus filed under sub-section (1) shall be in the form and contain the particulars set out in Part I of Schedule IV, and in the cases mentioned in Part II of the Schedule, shall set out the reports specified therein, and the said Parts I and II shall have effect subject to the provisions contained in Part III of that Schedule.
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1.Ins. by Act 31 of 1988, s.7 (w.e.f. 15-6-1988).
2.Subs. by Act 31 of 1965, s. 62 and Sch., for “fourteen” (w.e.f. 15-10-1965).
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(c)Where the persons making any such report as is referred to in clause (a) or (b) have made therein, or have, without giving the reasons indicated therein, any such adjustments as are mentioned in clause 32 of Schedule II or clause 5 of Schedule IV, as the case may be, the prospectus or statement in lieu of prospectusfiledas aforesaid, shall have endorsed thereon or attached thereto, a written statement signed by those persons, setting out theadjustments and giving the reasons therefore.
(3)If default is made in complying with sub-section (1) or (2), the company, and every officer of the company who is in default, shall be punishable with fine which may extend to five hundred rupees for every day during which the default continues.
(4)Where any prospectus or statement in lieu of prospectus filed under this section includes any untrue statement, any person who authorised the filing of such prospectus or statement shall be punishable with imprisonment for a term which may extend to two years, or with fine which may extend to five thousand rupees, or with both, unlesshe proves either that the statement was immaterial or that he had reasonable ground to believe, and did up to the time of the filing of the prospectus or statement believe, that the statement was true.
(5)For the purposes of this section –
(a)a statementincluded in a prospectus or a statement in ieu of prospectus shall be deemed to be untrue if it is misleading in the form and context in which it isincluded; and
(b)where the omission from a prospectus or a statement in lieu of prospectus of any matter is calculatedto mislead, the prospects or statement in lieu of prospectus shall be deemed, in respect of such omission, to be a prospectus or a statement in lieu of prospectus in which an untruestatement is included.
(6)For the purposes of sub-section (4) and clause (a) of sub-section (5), prospectus or statement in lieu of prospectus, means included in the prospectus or statement in lieu of prospectus itself or contained in any report or memorandum appearing on the face thereof, or by reference incorporated therein.
Incorporation of Company and Matters Incidental thereto
Reduction of Number of Members below Legal Minimum
45.Members severally liable for debts where business carried on with fewer than seven, or in the case of a private company, two members.
If at any time the number of members of a company is reduced, in the case of a public company, below seven, or in the case of a private company, below two, and the company carries on business for more than six months while the number is so reduced, every person who is a member of the company during the time that it so carries on business after those six months and is cognisant of the fact that it is carrying on business with fewer than seven members or two members, as the case may be, shall be severally liable for the payment of the whole debts of the company contracted during that time, and may be severally sued therefore.
Contracts and deeds, investments, seal, etc.
46.Form of contracts.
(1)Contracts on behalf of a company may be made as follows –
(a)a contract which, if made between private persons, wouldby law be required to be in writing signed by the parties to be charged therewith, may be made on behalf of the company in writing signed by any person acting under its authority, express or implied, and may in the same manner be varied or discharged;
(b)a contract which, if made between private persons, would by law be valid although made by parol only and not reduced into writing, may be made by parol on behalf of thecompany by any person acting under its authority, express or implied, and may in the same manner be varied or discharged.
(2)A contract made according to this section shall bind the company.
47.Bills of exchange and promissory notes.
A bill of exchange, hundi or promissory note shall be deemed to have been made, accepted, drawn or endorsed on behalf of a company if drawn, accepted, made, or endorsed in the name of, or on behalf or on account of, the company by any person acting under its authority, express or implied.
48.Execution of deeds.
(1)A company any, by writing under its common seal, empower any person, either generally or in respect of any specified matters, as its attorney, to execute deeds on its behalfin any place either in or outside India.
(2)A deed signed by such an attorney on behalf of the company and under his seal where sealing is required, shall bind the company and have the same effect as if it were under its common seal.
49.Investments of company to be held in its own name.
(1)Save as otherwise provided in sub-sections (2) to (5) 1[or any other law for the time being in force] and subject to the provisions of sub-sections (6) to (8) –
(a)all investments made by a company on its own behalf shall be made and held by it in its own name; and
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1.Ins. by Act 65 of 1960, s. 15.
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(b)where any such investments are not so held at the commencementof this Act the company shall, within aperiod ofone year from such commencement, either cause them tobe transferred to, and hold them in, its own name, or dispose of them.
(2)Where the company has a right to appoint any person or persons, or where any nominee or nominees of the company has or have been appointed, as a director or directors of any other body corporate, shares in such other body corporateto an amount not exceeding the nominal value of the qualification shares which are requiredto be held by a director thereof, may be registered or held by such company jointly in the names of itself and of each such person or nominee or in the name of each such person or nominee 1** *.
(3)A company may hold any shares in its subsidiary in the name or names of any nominee or nominees of the company, if and in so far as it is necessary so to do, to ensure that the number of members of the subsidiary is not reduced, where it is a public company, below seven, and where it is a private company, below two.
(4)Sub-section (1) shall not apply to investments made by a company whose principal business consists of the buying and selling of shares or securities.
(5)Nothing in this section shall be deemed to prevent a company –
(a)from depositing, with a bank, being the bankers of the company,any shares or securities for the collection ofany dividend or interest payable thereon; or
2[(aa)from depositing with, or transferring to, or holding in the name of, the State Bank of India or a ScheduledBank, beingthe bankers of the company, shares orsecurities, in order to facilitate the transfer thereof;
Provided that if thin a period of six months from the date on which the shares or securities are transferred by the company to, or are first held by the company in the name of, the State Bank of India or a Scheduled Bank as aforesaid, no transfer of such shares or securities takes place, the company shall, as soon as practicable after the expiry of that period, have the shares or securities retransferred to it from the State Bank of India or the Scheduled Bank or, as the case may be, again hold the shares or securities in its own name; or]
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1.The words “expressly described as a nominee of the company” omitted by Act 65 of 1960, s. 15.
2.Ins. by s. 15, ibid.
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(b)from depositing with, or transferring to, any person any shares or securities, by way of security for the repayment of anyloan advanced to the company or the performanceofany obligation undertaken by it.
1[(c)from holding investments in the name of a depository when such investment are in the form of Securities held by the company as a beneficial owner.]
(6)The certificate or letter of allotment relating to the shares or securities in which investments have been made by a company shall, except in the cases referred to in sub-sections (4) and (5), be in the custody of such company or 2[with the State Bank of India or a Scheduled Bank], being the bankers of the company.
(7)Where, in pursuance of sub-section (2), (3), (4) or (5), any shares or securities in which investments have been made by a company are not held by it in its own name, the company shall forthwith enter in a register maintained by it for the purpose –
(a)the nature, value, and such other particulars as may be necessary fully to identify the shares or securities in question; and
(b)the bank or person in whose name or custody the shares or securities are held.
(8)The register kept under sub-section (7) shall be open to the inspection of any member or debenture holder of the company without charge, during business hours, subject to such reasonable restrictions as the company may, by its articles or in general meeting, impose, so that not less than two hours in each day are allowed for inspection.
(9)If default is made in complying with any of the requirements of subsections (1) to (8), the company and every officer of the company who is in default, shall be punishable with fine which may extend to five thousand rupees.
(10)If any inspection required under sub-section (8) is refused, the 3[Company Law Board] may, by order, direct an immediate inspection, of the register.
Nothing in this sub-section shall be construed as prejudicing in any way the operation of sub-section (9).
(11)in this section, “Securities” includes stock and debentures.
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1.Ins. by Act 22 of 1996 s.31 and Sch. (w.e.f. 20-9-1995).
2.Subs. by Act 65 of 1960 s. 15, for “with a Scheduled Bank”.
3.Subs. by Act 31 of 1988, s. 67 (w.e.f. 31-5-1991).
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Power for company to have official seal for use outside India
50.Power for company to have official seal for use outside India.
(1)A company whose objects require or comprise the transaction of business outside India may, if authorized by its articles, have for use in any territory, district or place not situate in India an official seal which shall be a facsimile of the common seal of the company, with the addition on its face of the name of the territory, district or place where it is to be used.
(2)A company having an official seal for use in any such territory, district or place may by writing under its common seal, authorize any person appointed for the purpose in that territory,district or place to affix the official seal to any deed or other documentto which the company is a party in that territory, district or place.
(3)The authority of any agent authorized under sub-section (2) shall, as between the company and any person dealing with the agent, continue during the period, if any, mentioned in the instrument conferring the authority, or if no period is there mentioned, until notice of the revocation or determination of the agents authority has been given to the person dealing with him.
(4)The person affixing any such official seal shall, by writing under his hand, certify on the deed or other document to which the seal is affixed, the date on which and the place at which, it is affixed.
(5)A deed or other document to which an official seal is duly affixed shall bind the company as if it had been sealed with the common seal of the company.
Service of Documents
51.Service of documents on company.
A document may be served on acompanyoran officer thereof by sending ittothecompanyor officerattheregisteredoffice ofthecompany by post under certificate of posting or by registered post, or by leaving it atits registered office:
1[Provided that where the securities are held in a depository, the records of the beneficial ownership may be served by such depository on the company by means of electronic mode or by delivery of floppies or discs.]
52.Service of documents on Registrar.
A document may be served on a Registrar by sending it to him at, his office by post, under a certificate of posting or by registered post,’ or by delivering it to or leaving it for, him at his office.
53.Service of documents on members by company.
(1)A document may be served by a company on any member thereof either personally, or by sending it by post to him to his registered address, or if he has no registered address in India, to the address, if any, within India supplied by him to the company for the giving of notices to him.
(2)Where a document is sent by post –
(a)service thereof shall be deemed to be effected by properly addressing, prepaying and posting a letter containing the document, provided that where a member has intimated tothe company in advance that documents should be sent to him under a certificate of posting or byregistered post with or without acknowledgementdueand has deposited with the company a sum sufficient to defray the expenses of doing so, serviceof the document shall not be deemed tobeeffected unless it is sent in the manner intimated by the member; and
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1.Ins. by Act 22 of 1996, s.31 and Sch. (w.e.f. 20-9-1995).
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(b)1* * * such service shall be deemed to have been effected –
(i)in the case of a notice of a meeting, at the expiration of forty-eight hours after the letter containing the same is posted, and
(ii)in any other case, at the time at which the letter would be delivered in the ordinary course of post.
(3)A document advertised in a newspaper circulating in the neighbourhood of the registered office of the company shall be deemed to be duly served on the day on which the advertisement appears, on every member of the company who has no registered address in India and has not supplied to the company an address within India for the giving of notices to him.
(4)A document may be served by the company on the joint holders of a share by serving it on the joint-holder named first in the register in respect of the share.
(5)A document may be served by the company on the persons entitled to a share in consequence of the death or insolvency of a member by sending it through the post in a prepaid letter addressed to them by name, or by the title of representatives of the deceased, or assigneesoftheinsolvent,or by anylike description, at the address,ifany, in India supplied for the purposebythepersons claimingtobeso entitled, or until such an addresshasbeen so supplied, by serving the document in any manner in which it might have been served if the death or insolvency had not occurred.
Authentication of Documents and Proceedings
54.Authentication of documents and proceedings.
Save as otherwise expressly provided in this Act, a document or proceeding requiring authentication by a company may be signed by a director, the managing agent the secretaries and treasurers, the manager, the secretary or other authorised officer of the company, and need not be under its common seal.
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1.The words “unless the contrary is proved,” omitted by Act 65 of 1960, s. 16.
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(b)from depositing with, or transferring to, any person any shares or securities, by way of security for the repayment of anyloan advanced to the company or the performanceofany obligation undertaken by it.
1[(c)from holding investments in the name of a depository when such investment are in the form of Securities held by the company as a beneficial owner.]
(6)The certificate or letter of allotment relating to the shares or securities in which investments have been made by a company shall, except in the cases referred to in sub-sections (4) and (5), be in the custody of such company or 2[with the State Bank of India or a Scheduled Bank], being the bankers of the company.
(7)Where, in pursuance of sub-section (2), (3), (4) or (5), any shares or securities in which investments have been made by a company are not held by it in its own name, the company shall forthwith enter in a register maintained by it for the purpose –
(a)the nature, value, and such other particulars as may be necessary fully to identify the shares or securities in question; and
(b)the bank or person in whose name or custody the shares or securities are held.
(8)The register kept under sub-section (7) shall be open to the inspection of any member or debenture holder of the company without charge, during business hours, subject to such reasonable restrictions as the company may, by its articles or in general meeting, impose, so that not less than two hours in each day are allowed for inspection.
(9)If default is made in complying with any of the requirements of subsections (1) to (8), the company and every officer of the company who is in default, shall be punishable with fine which may extend to five thousand rupees.
(10)If any inspection required under sub-section (8) is refused, the 3[Company Law Board] may, by order, direct an immediate inspection, of the register.
Nothing in this sub-section shall be construed as prejudicing in any way the operation of sub-section (9).
(11)in this section, “Securities” includes stock and debentures.
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1.Ins. by Act 22 of 1996 s.31 and Sch. (w.e.f. 20-9-1995).
2.Subs. by Act 65 of 1960 s. 15, for “with a Scheduled Bank”.
3.Subs. by Act 31 of 1988, s. 67 (w.e.f. 31-5-1991).
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