Companies. Act 35 er & ctiam. ARRANGEMENT OF SECTIONS. Section. 1. 2. 3. Short title and commencement,. Interpretation. Prohibition. PART I. (1) This Act may be called the Companies Act, Provided that the article of association of a company framed under any law relating to companies at any. Short Title - This Act may be cited as the International Business Companies part of the International Business Companies Act, and the International.
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assets of the company over the sum of its total liabilities as shown in the books of account plus its issued and outstanding share capital. 28 of , s. 2. COMPANIES AMENDMENT ACT 2. Amends section 5 of principal Act. 3. Section 5 of the principal Act is amended—. Short Gde. 1. This Act may be cited as the International Business. Companies Act . Interpretatich. 2.(1). In this Act -. Page 7. ED]. INTERNATIONAL.
A trustee is a person who is the owner of the property and deals with it as principal. A director is not the owner of the company and he does not enter into contracts with third parties as owner of the companys property.
But the directors position is similar to that of a trustee because he is bound to exercise his power in the interest of the company and is liable for the misuse of his powers. Director as Employee: Being a director does not make that person an employee of the company. If the company enters into a service contract with the director, then the director becomes an employee. For example, a director may be the legal advisor of a company.
In this circumstance, relevant aspects of employment law apply in addition to the law relating to directors. Director as Agent: It is more accurate to describe directors as agents of the company. The directors are agents of the company because the company acts through the directors. Contracts with third parties are entered into by the directors, not as principals but as agents of the company.
An agent is bound to take instructions from his principal. But by the articles and under the Companies Act, , the directors have independent power in certain matter.
Even the directors are not bound to consult the shareholders in all matters. Director as Officer: Directors are treated as officers of the company. An officer, who is in default may be punished if he is guilty of default, no compliance, failure or refusal of the rules regarding the Companies Act, Discuss the appointment methods of the Directors.
A Director of a company may be appointed by various ways. These ways are described in brief- a. By promoters: According to sec a , the subscriber of the memorandum shall be deemed to be the directors of the company until the first directs are appointed in the Annual General Meeting AGM of the company. They are primarily elected by the promoters of the company and may work as directors until the AGM. By shareholders: According to sec b , the directors of the company are elected by the direct votes of the shareholders of the company in the AGM.
This the general rule for appointing directors.
By board of directors: According to sec c , the Board of Directors can appoint directors of the company under following conditions- The Board of Directors can appoint directors for any temporary vacancy in the post of directors.
By the articles mentioned in the Memorandum of the company or by the decisions made in the AGM by the shareholders, the Board of Directors may appoint a person for the absence of other director. By the articles mentioned in the Memorandum of the company.
The Board of Directors might appoint additional directors for the company if necessary.
But it shall not exceed in number one-third of the total number of directors. Discuss the Dissolution process of the company. Dissolution is the last stage of liquidation, the process by which a company or part-of-a company is brought to an end, its legal entity is terminated, and the assets and property of the company redistributed.
According the Sec. They are described in brief- a. If company has by special resolution resolved that the company be wound up by the Court. If Default is made in filing the statutory report or in holding the statutory meeting.
If the company does not commence its business or fails to commence its business or suspends its business within a year from its incorporation. If the minimum number of members is reduced. If the company is unable to pay the debts. If the Court is of opinion that it is just and equitable that the company should be wound up. Voluntary Dissolution: If the shareholders or the directors of the company, voluntarily want an end to company, it is called voluntary dissolution.
It may occur in following two ways: 1. The court shall take into account the contingent and prospective liabilities of the company. The demand referred to in clause i of sub-section I shall be deemed to have been duly given under the hand of the creditor.
It is signed by an agent or legal advisor or ay one member of the firm on behalf of the firm. The district court shall have all the jurisdiction and power of the high court division for the propose of winding up of the company.
The shares of contributory is allotted and registered in his name for at least 06 months during the 18 months before the commencement of winding up, or have development on him through the death of a firmer holder. On the making of a winding up order the official receiver shall become the official liquidator of the company.
He shall continue to act as such until his further continuance is terminated by an order of the court. As the official liquidator, the official receiver shall forthwith take into custody and control all the books, documents and the assets of the company.
The official receiver shall be entitled so much remuneration as the court shall fix. On the filling of accompany of the winding up order, the register shall register a summary thereof in his books relating to the company. He shall also notify in the official gazette that such an order has been made.
Such order shall be deemed to be the servants of the company, except when the business of the company is continued. Performing such duties in reference thereto as the court may impose.
The court may make such an appointment provisionally at any time. It shall be made after the presentation of a petition. Before making any such appointment, give notice to the company unless for reasons to be recorded it thinks fit to dispense with such notice. If more persons than one are appointed to the office or official liquidator, the court shall declare any act, by this act required to authorize.
This Act contains the work not be done by all or any one or more of such persons. The court may determine whether any and what security is to be given by any official liquidator on his appointment.
The Acts of an official liquidator shall be valid notwithstanding any defect that may afterwards be discovered in his appointment. Provided that nothing in this sub-section shall be deemed to give validity to Acts done by an official liquidator after his appointment has been shown to be invalid. A receiver shall not be appointment of assets in the hands of an official liquidator. He also may be removed by the court on due cause shown.
Any vacancy in the office of an official liquidator appointed by the court shall be filled up by the court. Unless the vacancy is so filled up the official receiver shall be and act as the official liquidator. There shall be paid to the official liquidator salary or remuneration in the following way: By way of percentage; As the court may direct; If more liquidators than one are appointed, such remuneration shall be distributed amongst them in such proportions as the court directs.
The assets of the company staying the cash balance in hand and bank. The debts and other liabilities. The names, residence and occupations of the persons, they are due and the amount likely to be realized. The statement shall be submitted and verified one or more persons. The persons who were at the relevant date the directors and that date the secretary, manager and other chief officer of the company. The person as the official liquidator may subject to direction or court require submitting and verifying the statement.
Directors or officer of the company. The company have taken part in any time within one year before the relevant date. The employment of the company within sub-section and in the official liquidator capable of giving the information required. The statement relates offices of or in the employment of a company. The submitted shall be submitted within twenty one days from the relevant date or within such extended time as the official liquidator or the court may for special reasons appoint.
As the amount of capital issued, subscribed, and paid up…. Cash and negotiable securities; Debts due from contributors; Debts due to and securities; Moveable and immoveable properties belonging to the company; Unpaid calls; The company has failed as to the causes of the failure, The promotion, formation, or failure of the company or the conduct of the business thereof.
The official liquidator may thinks fits, make a further report, stating the manner in which the company. Any person in the promotion or formation or by any director or the other official of the company in relation to the company since the formulation and any other matter which is his opinion it is desirable, to bring to the notice of the court.
He is appointed provisionally; He is not appointed provisionally. All the property and effects of the company shall be deemed to be in the custody of the court as from the date of the order for the winding up of the company.
The official liquidator shall, within from the date of the creditors meeting convince a meeting of the contributories to consider the decision of the creditors. The contributories do not accept the decision of the creditors in its entirely, the duty of official liquidator to apply the court, shall be a committee of inspection. What shall be the composition of the committee and who shall be members thereof.
A committee inspection more than twelve members being creditors and contributories of the company or persons holding general or special power of attorney from creditors or contributories in such proportions as may be agreed on by the meeting of creditors or contributors.
The committee of inspection shall have the right to inspect the accounts of the official liquidator. The committee shall meet appoint and the liquidator or any members of the committee may also call a meeting of the committee as and thinks necessary. The committee may act by a majority of their members at a meeting but act unless a majority of the committee is present. A member of the committee may resign by notice in writing signed by him and delivered to the liquidator.
The committee becomes bankrupt or compounds or arranges with the creditors or is absent five meeting of the committee of those members who together with himself represent the creditors or contributors.
A member of the committee may be removed by an ordinary resolution at a meeting of the creditors or contributors, of which seven days notice has been given starting of the meeting. On a vacancy occurring of the committee, the liquidator shall summon a meeting of creditors or of contributories, as the case may require, to fill in the vacancy.
Qualification and disqualification of auditors: Audit of accounts of branch office of company: Right of auditor to attend general meeting- Penalty for non-compliance with section to Penalty for non-compliance by auditor with section and Audit of certain matters by Cost and Management Accountants.
Right of preference shareholders and debenture holders as to receipts and inspection of reports, etc: Liability for carrying on business with fewer than seven or, in the case of a private company, two members: Service of documents on company: Service of documents of Registrar: Authentication of documents: Application and alteration of schedules and power to make rules as to prescribed matters: Power of companies to refer matters to arbitration. Power to compromise with creditors and members.
Provisions for facilitating arrangements and compromises. Conversion of private company into public company. Power of Court to give direction for protectiong interest of the minority. Mode of winding up. Liability as Contributories of present and past members. Liability of directors whose liability is unlimited. Nature of liability of contributory.
Contributories in case of death of member. Contributories in case of insolvency of member. Circumstances in which company may be wound up by Court. Company when deemed unable to pay its debts. Winding up may be referred to District Court. Transfer of winding up from one District Court to another. Provisions as to applications for winding up. Effect of winding up order. Commencement of winding up by Court. Court may grant injunction. Powers of Court on hearing peititon. Suits stayed on winding up order.
Vacancy in the office of liquidator. Copy of winding up order to be filed with the Registrar. Power of Court to stay winding up. Court may have regard to wishes of creditors or contributories— Appointment of official liquidator. Resignations, removals, filling up vacancies and compensation. Official liquidator. Statement of affairs to be made to the liquidator.
Statement by liquidator. Committee of Inspection in compulsory winding up. Powers of official liquidator. Limit of Discretion of official liquidator. Provision for legal assistance to official liquidator. Liquidator to keep books containing proceeding of meetings and to submit account of his receipts to Court.
Settlement of list of contributories and application of assets. Power to require transfer, delivery etc of property. Power to order payment of debts by contributory. Power of Court to make calls. Power to order payment into bank. Regulation of account with Court.
Power to enclude creditors not providing in time: Adjustment of right of contributories: Power to order cost: Dissolution of company- Power to summon persons suspected of having property of company: Power to order public examination of promotors, etc: Power to arrest absconding contributionry: Saving of other proceedings: Power to enforce orders: Order made in any Court to be enforced by other Courts.
Mode of dealing with order to be enforced by other Courts.
Appeal from orders: Circumstances in which company may be wound up voluntarily: Commencement of voluntary winding up. Effect of voluntary winding up on status of company. Notice of resolution to wind up voluntarily. Declaration of solvency. Power of company to appoint and fix remuneration of liquidator.
Power to fill vacancy in the office of liquidator. Power of liquidator to accept shares, etc as consideration for sale of property of company. Duty of liquidator to call general meeting at the end of each year: Final meeting and dissolution— Provision applicable to a vonutary winding up: Meeting of creditors: Appointment of liquidator.
Appointment of committee of inspection. Fixing of liquidators remuneration and cessation of directors powers. Application of section to a creditors vointary winding up. Duty of liquidator to call meeting of company and of creditors at the year and. Final meeting and dissolution. Provisions applicable to every voluntary winding up. Distribution of property of company — Powers and duties of liquidator in voluntary winding up.
Power of Court to appoint and remove liquidator in voluntary winding up— Notice by liquidator of his appointment. Arrangement when bindings on credtitors. Power to apply to Court to have questions determined of powers exercised. Cost of voluntary winding up. Saving for rights of creditors and contributory. Power of Court to adopt proceeding of voluntary winding up. Power to order winding up subject to supervision. Effect of petition for winding up subject to supervision.
Court may have regard to wishes of creditors and contributories. Power of Court to appoint and remove liquidators. Effect of supervision order. Appointment of liquidators subject to supervision to the office of official liquidators— Avoidance of transfers, etc.
Debts of all descriptions to be proved. Application of insolvency rules in winding up of insolvent companies. Preferential payments. Fraudulent preference. Avoidance of certain attachments, executions, etc Effect of charge created after commencement of winding up— General scheme of liquidation may be sanctioned.
Power of Court to assess damages against delinquent director, etc. Penalty for falsification of book.
Prosecution of delinquent directors. Penalty for false evidence: Penal provisions— Meeting to ascertain wishes of creators or contributions. Evidentially value of documents of company— Inspection documents. Power of Court to declare dissolution of comma void: Information as to pending liquidations: Payment of liquidator into bank: Unclaimed dividend and undistributed assets to be paid to Combines Liquidation Account: Court or person before whom affidavit may be sworn: Power of Supreme Court to make rules: