Issue of Rights shares to Existing Shareholders of the Company

Companies Act 2013 : Section 62 – Issue of rights shares Section 62 of the 2013 Act was notified and has been in effect from 01-04-2014,except Sub-sections(4) to (6) which have not been notified ,at the time of going to press.Section 62 of the 2013 Act,like Section 81 of the 1956 Act,provides for issuance of shares to employees under Employee’s Stock Opinion Scheme and issue of shares on preferential basis.Sub-sections(4) to (6) of the Section 62 which have not been…

Read More

Alteration of Objects – Company Registration in Bangalore

Alteration of Objects Section 17(1) of the 1956 Act contained clauses (a) to (g) specifying purposes for which the object clause in the memorandum could be altered. The 2013 Act has not specified any purpose for which the object clause or any other clause of the memorandum could be altered, thus leaving the same to the wisdom of the shareholders. The only restriction or additional conditions to comply with or specified in the case of the company wishing to alter…

Read More

Rights of existing members – Company Registration in Bangalore

Section 81 of Companies Act, 1956 Section 81 of the 1956 Act granted pre-emptive rights to existing members of the company and provided for issue of rights shares to existing shareholders. However, the section also permitted the company to issue further shares to persons other than existing shareholders provided the conditions as stated in the section were met. Section 81 of the 1956 Act also empowered the Central Government to require a company to convert the loans granted or debentures…

Read More

Shareholder’s rights – Company Registration in Bangalore

Section 82 of Companies Act, 1956 As discussed earlier there is a difference between the terms negotiable and transferable and shares and debentures are not negotiable instruments, but transferable of the shareholder. Shares or debentures are movable property as made explicit under section 82 of the 1956 Act, and now by section 44 of the 2013 Act. Shareholder’s rights The rights of shareholders are: to elect directors and thus to participate in the management through them; to vote on resolutions…

Read More

Issue of convertible debentures – Company Registration in Bangalore

Section 117 of Companies Act, 1956 Issue of convertible debentures The 1956 Act did not empower a company to issue partly or fully convertible debentures. However, sub-section (1) of s. 71 of the 2013 Act is a new provision empowering the companies to issue partly or fully convertible debentures, provided the issuance is made pursuant to approval of the members by means of special resolution passed at a general meeting. Issue of debenture with voting rights prohibited Section 117 of…

Read More

Alteration of Articles of Company- Company Registration in Bangalore

Companies Act, 1956: Section 31 Section 31 of the 1956 Act empowered a company to alter its articles by passing a special resolution. The power, however, was subject to the provisions of the 1956 Act and conditions contained (if any) in the memorandum of the company. As per the provisions of section 31 of the 1956 Act a public company could be converted into a private company. Such conversion, however, was subject to the approval by the Central Government. Moreover,…

Read More

Definition of relevant issues of the company – Company Registration in Bangalore

Extracts relevant to new terms/definition  of Companies Act,2013 The JJ Irani committee was an Expert Committee  set up by the Ministry of Company Affairs which mentioned in Order dated 2nd December ,2004,to advise the Government to the new Company Registration  Law.The committee had the benefit of participation by several experts in various disciplines .It took a comprehensive view in developing a perspective on changes necessary in the companies Act,1956 in context of the economic and business registration environment.One of the…

Read More

Formation of companies with charitable objects

Formation of companies with charitable objects Section 8 of the 2013 Act corresponds to s. 25 of the 1956 Act. As per the 1956 Act, an association of persons alone could form a company under s. 25 of that Act. However, as per s. 8 of the 2013 Act, even one person can form a company under the section. The scope of objects for which a company can be registered under s. 8 of the 2013 Act has been expanded.…

Read More

Alteration of share capital – Company Registration in Bangalore

Companies Act, 1956: Section 94 Section 94 of the 1956 Act empowered a company limited by shares to alter its capital in any of the manner as stipulated under the section. Such power had to be exercised by the company in its general meeting. The section, however, clarified that cancellation of shares pursuant to the section would not amount to reduction of share capital under the Act. Companies Act, 2013: Section 61 Section 61 of the 2013 Act was notified…

Read More

Definition of Manager – Company Registration in Bangalore

Companies Act, 1956: Section 2(24) – Meaning of the term ‘manager’ Three conditions are to be satisfied before a person may become a manager under section 2(24) of the 1956 Act, viz., a) he must be an individual as opposed to a firm or a body corporate or an association, b) he must have the management of the whole or substantially the whole of the affairs of the company and c)he must be subject to the superintendence, control and direction…

Read More