Company law

CS: Executive Programme
Paper 4 : Company Law
[One paper: Three Hours – 100 marks]

Level of Knowledge :

Working knowledge.

Objective . . .

To develop an understanding of the regulation of companies and to provide thorough knowledge of the various provisions of the Company Law in India as well as Schedules and Rules made thereunder including their interpretation through case laws, departmental circulars, clarifications, notifications, etc.

Contents . . .

1.	Introduction
	Nature and form of business enterprise ; types of business enterprises; company – definition and nature. Historical development of corporate concepts ; emergence of principles of limited liability and development of Company Law in England and India. Concept of corporate personality; corporate veil and its lifting. Working and administration of Company Law.
2.	Incorporation and its Consequences
	Types of companies and their incorporation; memorandum and articles of association and their alteration; registered office; publication of name; commencement of business; contracts; deeds; common seal; effect of incorporation. Re–registration and registration of unregistered joint–stock companies. The doctrine of ultra-vires, constructive notice and indoor management. Promoters – meaning and importance; position, duties and liabilities.
3.	Financial Structure
	Concept of capital and financing of companies, sources of capital; classes and types of shares; equity with differential rights; issue of shares at par, premium and discount; forfeiture and surrender of shares; bonus issues; rights issues; issue of sweat equity shares; employees stock option scheme; private placement. Alteration of share capital; reduction of capital; buy–back of shares. Debt capital – debentures, debenture stock, bonds; new developments in corporate debt financing; debenture trust deed and trustees; conversion of and redemption of debentures. Securing of debts – creation, modification and satisfaction of charges. Prospectus – definition; abridged prospectus; red-herring prospectus; shelf prospectus; information memorandum; contents, registration, misrepresentations and penalties. Allotment and certificates – contracts to subscribe for shares, debentures and other securities; calls; share certificates and share warrants.
4.	Membership, Depositories and Transfer/Transmission
	Membership – modes of acquiring membership; rights and privileges of members, register of members; dematerialisation and rematerialisation of securities; transfer and transmission of securities in physical and depository modes; nomination.
5.	Management and Control of Companies
	Directors – appointment/re–appointment, qualifications, disqualifications, remuneration, vacation of office, retirement, resignation and removal; loans to directors; powers and duties; office or place of profit; role of directors; contracts in which directors are interested. Managing and whole–time directors and manager. Company secretary – appointment, role and responsibilities; company secretary as a principal officer. Meetings of directors and committees – frequency, convening, and proceedings of Board /Committee meetings; tele and videoconferencing of Board/Committee(s); resolution by circulation; minutes and evidence General meetings – kinds of meetings; law, practice and procedure relating to convening and proceedings at general and other meetings – notice, quorum, proxy, voting including voting through electronic means, resolutions, circulation of member's resolution, etc.; postal ballot; recording, signing and inspection of minutes; role of chairman. Distribution of powers of a company – division of powers between Board and general meetings; acts by directors in excess of authority; monitoring and management. Sole Selling and Buying Agents – Meaning, appointment and reappointment, removal; powers of Central Government and rules framed for the purpose.

6.	Dividend
	Profit and ascertainment of divisible profits; declaration and payment of dividend; treatment of unpaid and unclaimed dividend; transfer of unpaid and unclaimed dividend to Investor Education and Protection Fund.
7.	Investments, Loans and Deposits
	Law relating to making investments in and granting loans to other bodies corporate and giving guarantees and providing security. Invitation, acceptance, renewal, repayment, default and remedies.
8.	Accounts and Audit
	Books of account; financial statements; audit and auditor's report; powers of the Central Government to direct special audit; cost audit. Auditors – appointment, resignation and removal; qualification and disqualification; rights, duties and liabilities.
9.	Board's Report and Disclosures–
	preparation; disclosures; director's responsibility statement. Compliance certificate – need and purpose; issue and signing by practising company secretary; disclosure and filing.
10.	Registers and Returns
	maintenance, authentication, presentation and inspection of statutory books/registers prescribed under various provisions of the company law and filing of various forms/ returns to Registrar of Companies; procedure and penalties for delayed filing, etc. Annual Return – Nature and significance ; contents ; filling – preparation and disclosures; signing, certification and filing; maintenance, place of keeping and its inspection.
11.	Inspection and Investigation
	Inspection of documents, books of account, registers etc; powers of the inspector, seizure of books and documents, inspector's report; power of the Registrar of Companies, investigation into affairs of the company.
12.	Majority Rule and Minority Rights
	Law relating to majority powers and minority rights. Shareholder remedies – actions by shareholders; statutory remedies; personal actions; prevention of oppression and mis-management.
13.	Compromises and Arrangements
	an overview.
14.	Societies, Co-operative Societies, Trusts, Producer Companies and Limited Liability Partnerships
	Concept, formation, membership, functioning and dissolution.
15.	Application of Company Law to Different Sectors such as Banking, Insurance, etc.
16.	Offences and Penalties
	an overview.
17.	Striking off Name of Companies.
	Concept.
18.	Winding up of Companies
	Concept and modes.
19.	An Introduction to E-governance