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Category Archives for "Companies Act"

Startup Recognition and Registration

A startup is term used to identify and promote entrepreneurs in establishing business undertakings. Several benefits/relaxations are offered to startup entities from compliance’s which would have been otherwise applicable to them. Benefits/Relaxations are offered for the initial period of establishment. Exemptions are granted from complying certain provisions of the Companies Act, 2013 such as minimum number of board meetings to be conducted, signing of annual return etc. Before getting recognition as a startup, an entity should be formed either as a Private Company (including One Person Company) or a Registered Partnership Firm or a Limited Liability  Partnership.

Ministry of Corporate Affairs explained the terms “start-up” or “start-up company” as a private company incorporated under the Companies Act, 2013 (18 of 2013) or the Companies Act, 1956 (1 of 1956) and recognized as start-up in accordance with the notification issued by the Department of Industrial Policy and Promotion, Ministry of Commerce and Industry.” Continue reading

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Register One Person Company

Before the enactment of Companies Act, 2013, minimum two persons were required to register a private company. Companies Act, 2013 introduced the concept of One Person Company (OPC) opened avenues for individual businessman and entrepreneurs to carry out their business as a separate legal entity with the advantages available to a sole proprietary concern and at the same time with limited liability. To form an OPC, only one person is required as a promoter/member.

Following are the advantages which One Person Company offers

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Registration of Charge by Bank/Charge holder

Can a bank/charge holder make application for registration of charge?

YES!.

Section 78 of the Companies Act, 2013 allows a bank/charge holder to make application for registration of charge.

Section 77 of the companies act, prescribes registration of charge as a duty of every company within 30 days of its creation, or within a period of 300 days from the creation of charge on reasonable grounds for delay.
In case, the company fails to register the charge within 30 days, section 78 of the Act empowers the charge holder (the person in whose favor the charge is created) to make application for the registration of charge along with the instrument created for the charge. Continue reading

What is entrenchment of Articles of Association

ENTRENCHMENT OF ARTICLES OF ASSOCIATION

Articles of Association contains regulations for management of a company. Company can adopt all or any of the regulations contained in the model articles prescribed in Table F, G, H, I & J of schedule 1 of Companies Act, 2013. Further companies can include additional matters in its articles which are necessary for its management.

In order to alter any regulations contained in the articles of association, special resolution should be passed in a general meeting. ( a special resolution means a resolution which requires at lease 3 times the number of votes, if any, cast against the resolution by members)
for example :- Assume 10 members(having 1 share each) were present in a general meeting of company in which a special resolution is to considered for alteration of a clause in the articles of association. If 2 out of 10 members had cast their votes against the resolution, then at least 6 members (3 times of votes cast against the resolution i.e. 3 X 2) shall cast their vote in favor of the resolution to consider it to be duly passed. Continue reading

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Resolutions requiring Special Notice

Section 115 of the Companies Act, 2013 requires members to give special notice on certain resolutions/matters prescribed in the act or in articles of association of the company.
Where, by any provision contained in the Act or in the articles of a company, special notice is required of any resolution, notice of the intention to move such resolution shall be given to the company by such number of members holding not less than one per cent of total voting power or holding shares on which such aggregate sum not exceeding five lakh rupees, as may be prescribed, has been paid-up and the company shall give its members notice of the resolution in such manner as may be prescribed.

Following are the matters/resolutions which require special notice by members Continue reading

Did Member and Nominee shall be Relatives – OPC

One Person Company (OPC), as its name indicates is formed by a single individual. A subscriber/member of an OPC shall name a person (after obtaining his consent) as a nominee of OPC who shall, in the event of the subscriber’s death or his incapacity to contract, become the member of that One Person Company. Further, name of such nominee shall be stated in the memorandum of association.

 

Some important features of OPC are:

  • A One Person Company is incorporated as a private limited company.
  • One person cannot incorporate more than one OPC or become nominee in more than one OPC.
  • A Person can become a member in one OPC and a nominee in another OPC.
  • No minor shall become member or nominee of the One Person Company or hold share with beneficial interest.
  • It must have only one member at any point of time.
  • It shall have at least one director.

 

One question which evolved from the concept of nominee is that whether the nominee shall be the relative of the subscriber/member. Continue reading