The curious case of section 4 7 of the companies act, 1956. Learning professionals august 15, 2012 section 309 of the companies act, 1956 remuneration of directors approval of central government under section 309 not required in case of increase in remuneration of nonwhole time directors of a company solely on account of payment of service tax on commission payable to them by the company. Applicability of section 372a companies act 1956 abcaus. Companies act 1956 section 266a citation 11205 bare act. The curious case of section 4 7 of the companies act, 1956 this issue is of paramount importance for foreign companies having majority shareholding in indian companies since classification as a. This an act to consolidate and amend the law relating to companies. Main provisions of companies act 1956 presented by. Section 291 of the companies act, 1956 confers general power on the board of directors. X x x x extracts x x x x b extracts may be taken therefrom and copies thereof may be required, by any member of the company to the same extent, in the same manner, and on payment of the same fees as in the case of the register of members of the company. Section 372a of the companies act legal service india. Companies compliance certificate rules, 2001 view download. Whether this will amount to investment under the provisions of section 372a of the companies act, 1956 for the listed company. The companies act, 20 act has come up with a change in the concept of loan and investment by company.
Companies act 1956 by study material lecturing notes pdf. The companies act, 20 has been notified in the official gazette on 30th august, 20 but the provisions of this act shall come into force on such dates as the central government may. Attention students applicability of companies act, 1956 and. Section 372a of the companies act of 1956 old law specifically exempts any loans made, any guarantee given, security provided or investments made by a holding company to its wholly owned. Powers of the board of directors of a company as per the. Meaning under section 25 of the companies act, 1956 under indian law, 3 legal forms exist for non profit organizations. Main provisions of companies act 1956 linkedin slideshare.
Jun 08, 2011 this post is contributed by vaibhav modi section 4a of the companies act, 1956 the act lays down what institutions shall be regarded as public financial institutions for the purposes of the act. There is no such provision under section 372a of erstwhile companies act, 1956. Powers of the board of directors of a company as per the indian companies act, 1956. Group 1 aarti singh, azhar hussain, jyoti nawlani, nemchand meena, renuka sharma 2.
Section 372a of the companies act,1956 corporate law forum. Section 372a inter corporate loaninvestmentguarantee. Notice pursuant to section 192a2 of the companies act, 1956 the company proposes the following resolution for approval by its members by postal ballot in accordance with section 192a of the companies act, 1956 the act and rules made under the act, seeking approval of its members in terms of section 372a of the act. In terms of section 192 a of the companies act 1956 read with companies passing of resolution by postal ballot rules, 2001 and with a view to ensure participation of all members of the company in passing of the resolutions, the items of business set out in the notice above may be passed by way of a postal ballot. Lesson 16 intercorporate loans, investments, guarantees. Sections 3994 and other relevant provisions of the act defined hereinafter, for such consideration and in such manner as provided for in this scheme defined hereinafter. Penalty for contravention of section 369, 370 or 370a.
Lesson 16 intercorporate loans, investments, guarantees and security 5 1862c of the act, 20. Companies act 1956 section 581b citation 11595 bare. Section 372a of the companies act, 1956 the act deals with intercorporate loan, investment, guarantee and securities in connection with loan. Section 186 of the companies act, 20 is yet to be notified. Updated and amended bare acts in pdf format of companies act 1956 and companies act 20. Companies act the companies act is a successor to the indian companies act of 19 and is a consolidation of many successive amendment acts, statutory rules and principles laid down in decisions of. Here is the pdf file for companies act, 20 and 1956. In a jv company wherein the indian listed company is providing know how and in lieu of that the jv company is allotting shares of 25%. At the time of doing so the companys management need to check the compliances of provisions of section 292, 58a and 372a of the companies act, 1956.
Companies declaration of beneficial interest in shares rules, 1975 view download. The companies act 20 has 464 sections and 7 schedules. Mca clarification on section 185 of ca 20 qua section. It is observed from the budget 2014 authorizes union govt to raise rs. India the companies act 1956 sec 25 power to dispense with limited in name of charitable or other company. Group 1 aarti singh, azhar hussain, jyoti nawlani, nemchand meena, renuka sharma companies act. The name of the company hereinafter called the federation is the federation of indian mineral industries. In this connection, it is hereby clarified that registers maintained by companies pursuant to sub section 5 of section 372a of companies act, 1956 may continue as per requirements under these provisions and the new format prescribed vide form mbp2 shall be used for particulars entered in such registers on and from 1. Applicability of companies act, 1956 and the companies act, 20 for june, 2015 examinations the question papers on the subjects of foundation new syllabus, executive new syllabus, and professional programme old and new syllabus shall carry questions from the notified sections of the companies act, 20 and rules made thereunder. One of the restrictions is contained in sub section 3 which provides as below.
Nov 24, 20 on november 19, 20 mca clarified that provisions of section 372a of the companies act, 1956 shall continue to operate until corresponding new provision under section 186 of the companies act 20 is notified. Mca has now clarified that sec 372a of the companies act 1956 dealing with intercorporate loans continues to remain in force till sec 186 of companies act 20. The new act provides that intercorporate investments not to be made through more than two layers of investment companies. Mar 17, 20 the ministry of corporate affairs mca vide its general circular no. The ministry of corporate affairs mca vide its general circular no.
The companies act, 1956 memorandum of association of the. Section 372a inserted in the principal act by the companies amendment act, 1999, lays down restrictions on intercorporate loans and investments. Clarification under section 372a3 of the companies act. This circular will apply till section 186 is notified, and if and when section 186 is notified, there will be again ambiguity as section 186 does not grant exemptions in holding and wholly owned subsidiary cases like section 372a does. Companies act, 1956 bare acts law library advocatekhoj. Section 9 effect of registration section 9 is not yet brought to force corresponding provisions of the companies act, 1956. Section 372a has been enacted following the recommendation of the working group constituted by the govt. Part ixa of companies act, 1956 income tax department. In computing at any time the percentages specified in sub section 2 and the provisos thereto, the aggregate of the investments made by the investing company in other body or bodies corporate whether before or after the commencement of the companies amendment act, 1960 65 of 1960, up to that time shall be taken into account. Clarification on section 372a of the companies act, 1956. Copy of the special resolution passed by the shareholders of the company under section 372 a of the companies act, 1956 is attached herewith. In which it has been clarified that section 372a,which deals with inter corporate loans remain effective till section 186 the.
Clarification under section 372a 3 of the companies act, 1956. Mca clarification under section 372a3 of the companies act. The 20 act is divided into 29 chapters containing 470 sections as against 658 sections in the companies act, 1956 and has 7 schedules. Companies acts section 185, 186 and 372a ambiguities. The word person has not been defined under the 20 act. Book companies act 1956 pdf download book companies act 1956 by pdf download author written.
Pursuant to sections 331 and 2 of the companies act, 1956 1. Clarification with regard to applicability of provision of. The companies act, 1956 existing act contains 658 sections and xv schedules. Companies acts section 185, 186 and 372a ambiguities come. May 07, 2011 main provisions of companies act 1956 presented by. Section 372a of 1956 act covers only body corporate, whereas section 186 of the 20 act covers perons and body corporate. This scheme under sections 391 to 394 of the companies act, 1956, provides for the transfer of entire business of transferred undertaking defined hereinafter of the. Manner of reporting on section 2273bb of the companies act, 1956. Act, 1960, choose not more than two of those companies as companies in which he wishes to continue to hold the office of managing director or manager, as the case may be. The companies act, 1956 section 303 to 674 the schedule, indian bare acts at, a website for indian laws and bareacts, legal advice. Saving of prosecutions instituted by liquidator or court under section 237 of act 7 of 19. Section 372a of the companies act, 1956, specifically exempts any loans mode, any guarantee given or security provided or any investment mode by d holding company to its wholly owned subsidiary. The companies act, 1956 section 303 to 674 the schedule.
Subject to the provisions of the act, the board of directors of a company shall be entitled to exercise all such powers, and to do all such acts and things, as the company is authorized to exercise and do. Wholly owned subsidiary us 372a of the companies act, 1956. The powers of the board of directors under various provisions of the indian companies act, 1956 may be grouped under four heads. Mca clarification under section 372a3 of the companies. A company, whether by itself or together with its subsidiaries hereafter in this section and section 373 referred as the investing company, shall not be entitled to acquire, by way of subscription, purchase or otherwise whether by itself. Companies act 1956, 20 pdf bare act, bare act pdf, law. Mca has now clarified that sec 372a of the companies act 1956 dealing with intercorporate loans continues to remain in force till sec 186 of companies act 20 is notified. Have you got tired of juggling through various changes under companies act, 20, rules thereunder. There is no such condition in section 185 of companies act, 20 and section 372a of companies act, 1956.
Mca clarification on applicability of section 372a of of. The companies act 20 is an act of the parliament of india on indian company law which regulates incorporation of a company, responsibilities of a company, directors, dissolution of a company. Companies act the companies act is a successor to the indian companies act of 19 and is a consolidation of many successive amendment acts, statutory rules and principles laid down. General law amendment act 50 of 1956 english text signed by the governorgeneral as amended by prisons act 8 of 1959 supreme court act 59 of 1959 general law amendment act 80 of 1964 general law amendment act 70 of 1968. Section 34 corresponding provisions of the english companies act, 2006 section 16 applicability. Section 4a2 empowers the central government to specify other institutions as a public financial institution by a gazetted notification. The ministry of corporate affairs vide its general circular no. These bonds carry a lower rate of interest, currently in the range of 6. As to the application of the provisions under section 295, the exemption under sub. All the four transactions are frequently taken place in any company and henceforth the section becomes more important and therefore it requires to special heed by virtue of strict penal provisions and. The companies act, 1956 memorandum of association of the federation of indian mineral industries new delhi limited by guarantee and not having a share capital name 1. Companies act, 1956 section 303 to 674 latest laws. The issue hos been examined with reference to applicability of section 372a ol the companies act, 1956 visavis section 185 of the companies act.
Indicate registrar of companies roc reference number for name approval2. Application for allotment of director identification number. Section 186 of the 20 act requires that a company will not i give loans to any personother body corporate, ii give guarantee or provide security in connection with a loan to any personbody corporate and iii acquire securities of any other body corporate. Section 186 of companies act, 20 loan and investment. Be it enacted by parliament in the sixth year of the republic of india as follows 1. To make it easier to understand lets first list out the transactions on which section 372a will not be applicable. Clarification with regard to applicability of provision of section 372a of the companies act 1956. Companies disqualification of directors under section 2741g of the companies act, 1956 rules, 2003.
The power to sanction intercorporate loansinvestments or giving of guarantee or providing security under section 372a. An act to reform company law and restate the greater part of the enactments relating to companies. Comparison of section 186 of companies act, 20 and. The issue has been examined with reference to applicability of section 372a of the companies act, 1956 visavis section 185 of the companies act, 20. The income tax department never asks for your pin numbers, passwords or similar access information for credit cards, banks or other financial accounts through email the income tax department appeals to taxpayers not to respond to such emails and not to share information relating to their credit card, bank and other financial accounts. The act, has lesser sections as the companies will be governed more through the rules which are yet to be prescribed. As per section 231 of the income tax act 1961, person includes. Cos act 20 section 186, 372a register mb2 of loansguarantee. An act to consolidate and amend the law relating to companies and certain other associations.
Jan 18, 2014 chapter ii incorporation of company and matters incidental thereto provisions of the companies act, 20. Definitions of company, existing company, private company and public company 4. Nov 20, 20 clarification on section 372a of the companies act, 1956. Lesson 16 intercorporate loans, investments, guarantees and security 1 lesson outline. Pursuant to sections 331 and 2 of the ihndi companies.
The companies act, 20 passed by the parliament has received the assent of the president of india on 29th august, 20. Public financial institutions under section 4a of the. Every a individual, intending to be appointed as director of a company. Section 372a of the companies act, 1956, specifically exempts any loans made, any guarantee given or security provided or any investment made by a holding company to its wholly owned subsidiary. Provisions as to certain loans which could not have been made if sections 369 and 370 were in force. The notes below are prepared based on the provisions of the act.
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