BUSINESS LAW

Q1. Indian Companies Act 1956-

The Companies Act 1956 was an Act of the Parliament of India, enacted in 1956, which
enabled companies to be formed by registration, and set out the responsibilities of
companies, their directors and secretaries.
The Act was administered by the Government of India through the Ministry of Corporate
Affairs and the Offices of Registrar of Companies, Official Liquidators, Public
Trustee, Company Law Board, Director of Inspection, etc. The Registrar of Companies
(ROC) handles incorporation of new companies and the administration of running
companies.
Since its commencement, it was amended many times, in which amendment of 1988,
1990, 1996, 2000 , 2011 & 2013 were notable.
Companies play very vital role in any economy. In our country, the Companies Act, 1956
primarily regulates the formation, financing, functioning and winding up of companies. The Act
prescribes regulatory mechanism regarding all relevant aspects including organisational,
financial and managerial aspects of companies. The winding up matters, presently are largely
within jurisdiction of High Courts. Regulation of the financial and management aspects
constitutes the main focus of the Act. In the functioning of corporate sector, although freedom
of companies is important, protection of investors and shareholders is also equally important.
The Companies Act plays the balancing role between these two competing factors, namely,
management autonomy and investor protection. The main objects of the Act are as under. (a)
To protect the interests of a large number of shareholders, as there exists separation of
ownership from management in a company; (b) To safeguard the interests of creditors; (c) To
help the development of companies in India on healthy lines, because corporate sector
constitutes a very important segment of the economy; (d) To help the attainment of the
ultimate ends of social and economic policy of the Government; (e) To equip the Government
with adequate powers to intervene in the affairs of a company in public interest and as per
procedure prescribed by law so that the interests of all stakeholders may be protected from
unscrupulous management. These objectives are achieved through measures as explained in
the following paragraphs.

Q 2. Legal Aspeets relating to Promotion and Estuablishment of

Joint Stock Companies in India?
Although you are generally free in terms of setting a price for your products,
there are certain rules which you must follow when it comes to
communicating these prices to customers. If you’re running a promotion or
competition there are additional considerations which must be taken into
account.
It’s important to display prices clearly and, for consumers, inclusive of VAT.
Prices should be unambiguous, easily identifiable and clearly legible - so
there shouldn’t be any room for doubt about which price relates to which
product. In the case that goods are being sold by measure, unit prices must
be shown in metric figures and pounds sterling.
If there are any non-optional extras which are required to be purchased with
the primary goods, you should either include these as part of the total price,
or display these prices prominently along with an explanatory statement.
If you’re comparing your prices to those of competitors, you need to make
sure the prices you quote are accurate and up-to-date. It’s often a good idea
to provide a date for the price comparison, especially in cases where pricing
is likely to change quickly.
A joint-stock company is a business entity in which shares of the company's stock can
be bought and sold by shareholders. Each shareholder owns company stock in
proportion, evidenced by their shares (certificates of ownership).[1] Shareholders are
able to transfer their shares to others without any effects to the continued existence of
the company.[2]
In modern-day corporate law, the existence of a joint-stock company is often
synonymous with incorporation (possession of legal personality separate from
shareholders) and limited liability (shareholders are liable for the company's debts only
to the value of the money they have invested in the company). Therefore, joint-stock
companies are commonly known as corporations or limited companies.
Some jurisdictions still provide the possibility of registering joint-stock companies
without limited liability. In the United Kingdom and in other countries that have adopted
its model of company law, they are known as unlimited companies. In the United States,
they are known simply as joint-stock companies. A joint-stock company is an artificial
person; it has legal existence separate from persons composing it. It can sue and can
be sued in its own name. It is created by law, established for commercial purposes, and
comprises a large number of members. The shares of each member can be purchased,
sold, and transferred without the consent of other members. Its capital is divided into
transferable shares, suitable for large undertakings.

Q3. Memorandum of Association?

Memorandum of Association (MoA) represents the charter of the company. It is a legal

document prepared during the formation and registration process of a company to define its
relationship with shareholders and it specifies the objectives for which the company has
been formed. The company can undertake only those activities that are mentioned in the
Memorandum of Association. As such, the MoA lays down the boundary beyond which the
actions of the company cannot go.

Memorandum of Association helps the shareholders, creditors and any other person dealing
with the company to know the basic rights and powers of the company. Also, the contents of
the MoA help the prospective shareholders in taking the right decision while thinking of
investing in the company. MoA must be signed by at least 2 subscribers in case of a private
limited company, and 7 members in case of a public limited company

1. Name Clause: This clause specifies the name of the company. The name of the
company should not be identical to any existing company. Also, if it is a private
company, then it should have the word ‘Private Limited’ at the end. And in case of
public company public company, then it should add the word “Limited” at the end of its
name. For example, ABC Private Limited in case of the private, and ABC Ltd for a
public company.

2. Registered Office Clause: This clause specifies the name of the State in which the
registered office of the company is situated. This helps to determine the jurisdiction of
the Registrar of Companies. The company is required to inform the location of the
registered office to the Registrar of Companies within 30 days from the date of
incorporation or commencement of the company.

3. Object Clause: This clause states the objective with which the company is formed.
The objectives can be further divided into the following 3 subcategories:

 Main Objective: It states the main business of the company

 Incidental Objective: These are the objects ancillary to the attainment of main
objects of the company

 Other objectives: Any other objects which the company may pursue and are not
covered in above (a) and (b)
 Liability Clause: It states the liability of the members of the company. In case of an
unlimited company, the liability of the members is unlimited whereas in case of a
company limited by shares, the liability of the members is restricted by the amount
unpaid on their share. For a company limited by guarantee, the liability of the members
is restricted by the amount each member has agreed to contribute.

Capital Clause: This clause details the maximum capital that a company can raise
which is also called the authorized/nominal capital of the company. This also explains
the division of such capital amount into the number of shares of a fixed amount each.

Q4. Article of Association?

Articles of association form a document that specifies the regulations for a company's
operations and defines the company's purpose. The document lays out how tasks are to be
accomplished within the organization, including the process for appointing directors and
the handling of financial records.

KEY TAKEAWAYS

 Articles of association can be thought of as a user's manual for a company, defining

its purpose and outlining the methodology for accomplishing necessary day-to-day
tasks.
 The content and terms of the "articles" may vary by jurisdiction, but typically include
provisions on the company name, its purpose, the share structure, the company's
organization, and provisions concerning shareholder meetings.
 In the the U.S. and Canada, articles of association are often referred to as "articles"
for short.

Understanding Articles of Association

Articles of association often identify the manner in which a company will issue shares,
pay dividends, audit financial records, and provide voting rights. This set of rules can be
considered a user's manual for the company because it outlines the methodology for
accomplishing the day-to-day tasks that must be completed.

While the content of the articles of association and the exact terms used vary from
jurisdiction to jurisdiction, the document is quite similar throughout the world and generally
contains provisions on the company name, the company's purpose, the share capital, the
company's organization, and provisions regarding shareholder meetings. 1
Company Name

As a legal entity, the company must have a name that can be found in the articles of
association.1 All jurisdictions will have rules concerning company names. Usually, a
suffix such as "Inc." or "Ltd." must be used to show that the entity is a company. Also,
some words that could confuse the public, such as "government" or "church," cannot
be used or must be used only for specific types of entities. Words that are offensive or
heinous are also usually prohibited.

Purpose of the Company

The reason for the creation of the company must also be stated in the articles of
association.1 Some jurisdictions accept very broad purposes—"management"—while
others require greater detail—"the operation of a wholesale bakery," for example.

Share Capital

The number and type of shares that comprise a company's capital are listed in the
articles of association. 1 There will always be at least one form of common share that
makes up a company's capital. In addition, there may be several types of preferred
shares. The company may or may not issue the shares, but if they are found in the
articles of association, they can be issued if and when the need presents itself.

A company may or may not issue shares, but if they are listed in the articles of
association, shares can be issued if and when needed.

Organization of the Company

The legal organization of the company, including its address, the number of directors
and officers, and the identity of the founders and original shareholders, are found in
this section. Depending on the jurisdiction and type of business, the auditors and legal
advisors of the company may also be in this section.

Shareholder Meetings

The provisions for the first general meeting of shareholders and the rules that will
govern subsequent annual shareholder meetings —such as notices, resolutions, and
votes—are laid out in detail in this section.

Q5. Prospectus, Shares and Share Capital; Allotment of Shares?

Prospectus_
What Is a Prospectus?
A prospectus is a formal document that is required by and filed with the Securities and
Exchange Commission (SEC) that provides details about an investment offering to the
public. A prospectus is filed for offerings of stocks, bonds, and mutual funds.

The prospectus can help investors make more informed investment decisions because
it contains a host of relevant information about the investment or security.

Shares_
Shares represent ownership of a company. When an individual buys shares
in your company, they become one of its owners. Shareholders choose who
runs a company and are involved in making key decisions, such as whether a
business should be sold.

While shares are most obviously associated with the stock market, most
small businesses don't go near a stock market in their lifetime. They are
more likely to issue shares in their company in return for a lump sum
investment. This investment may either come from friends and family or, for
businesses that are looking for capital to fund high growth, through formal
equity funding finance.

Formal equity finance is available through:

 business angel investors

 venture capital firms
 stock markets
These investors are willing to put up capital for a share in a growth business.
The advantage of raising money in this way is that you don't have to pay the
money back or pay interest to the investors. Instead, shareholders are
entitled to a share of the distributable profits of the company, known as
dividends.

Share capital_
In accounting, the share capital of a corporation is the nominal value of issued
shares (that is, the sum of their par values, sometimes indicated on share certificates). If
the allocation price of shares is greater than the par value, as in a rights issue, the
shares are said to be sold at a premium (variously called share premium, additional
paid-in capital or paid-in capital in excess of par). Commonly, the share capital is the
total of the nominal share capital and the premium share capital. Most jurisdictions do
not allow a company to issue shares below par value, but if permitted they are said to
be issued at a discount or part-paid.
Sometimes, shares are allocated in exchange for non-cash consideration, most
commonly when corporation A acquires corporation B for shares (new shares issued by
corporation A). Here the share capital is increased to the par value of the new shares,
and the merger reserve is increased to the balance of the price of corporation B.
In practice, the concept of "par value" has very little meaning, since shares usually
represent a residual claim; they do not endow their owners with a claim toward any fixed
sum of money. In some jurisdictions, share par values have been either abolished or
made optional, so a corporation can issue shares having no par value. In that case,
from an accounting perspective, all of the corporation's share capital is premium.

Allotment of Shares_
An allotment of shares is when a company issues new shares in exchange for cash or
otherwise. Such allotment of new shares increases the company’s share capital. Private
companies can allot new shares only after filing the “Return of Allotment of Shares”
transaction via BizFile+. Public companies limited by shares can allot new shares
anytime and must file the “Return of Allotment of Shares” transaction within 14 days
from the date of allotment.

The company’s constitution may give its directors the power to decide on the number of
new shares to be issued, the terms which they will be issued and the price subject to
compliance with Section 161 of the Companies Act. However, regardless of what is
provided in the constitution, all company directors must first seek approval through a
general meeting before proceeding with the share allotment.

Shares may be allotted for cash or for a consideration otherwise than in cash. Some
reasons include:

 Due to a contract, which can be written or not.

 Due to a provision in the company’s constitution.
 In exchange for payment of dividends to a shareholder.
If your company is issuing shares other than in cash, you must attach a copy of the
relevant documents (e.g. the contract or Order of Court) when submitting the “Return of
Allotment of Shares” transaction via BizFile+.

Before filing the Return of Allotment of Shares for your company, you will need to
prepare the following information:

1. Number of shares allotted.

2. Amount paid (if any) or deemed to be paid on the allotment of each share.
3. Amount (if any) unpaid on each share.
4. Class of shares that are being issued.
5. Updated list of shareholders and their shareholdings. This list should include:
a. Personal particulars of each shareholder, such as full name, identification
number, nationality and address
 b. Number and class of shares held by each of the members.

Public companies that are not listed on the Singapore Exchange only need to list out the
50 members with the most number of shares in the company, excluding treasury
shares. Listed public companies need not provide this information.

Q6. , Legal Rules regarding Membership and Borrowing Powers,

Every business requires a lot of financial amounts to operate effectively. A
business becomes healthy only if it has a number of financing options available to
capitalize on the assets which are a foundation of every business. Companies need
money for a lot of reasons like buying new capital, fund the existing capital,
expand the business, etc. Hence companies borrow money to facilitate the
efficacious running of their business which cannot be solely run on profit
generated.

Borrowing can be defined as a means through which Companies arrange financial

funds through external sources like bank loans, shareholders, public investment,
etc.

Power of Board to Borrow Money

 Powers of Board – The board of directors is a body of people who supervise

the management of affairs in a company and represent the shareholders
of the company. The board of directors has been disposed of powers by
the Act to exercise power to borrow money on behalf of the company.
[i] The same has to be done. They also have the power to issue
debentures, securities in respect of loans. But when dealing with banks
like RBI, SBI or any other established bank, the arrangement of loans is
done based on overdraft or cash credit.
 RestrictionsOn Power – The board of directors under Section 180 have
some restrictions where they have to pass a special resolution to borrow
money. The money to be borrowed should be more than the paid-up
share capital and free reserves apart from temporary loans obtained by
the company’s bankers.[ii]The the board is prohibited from borrowing
money in terms of Temporary loans and for more than six months which
include short-term, cash credit arrangements, the discounting of bills.
  Special Resolution – The special resolution has to be passed by all board
members in General Meeting. The amount to be borrowed is specified on
the resolution which has to be duly approved by all people in or required
people in the company. [iii]
 Limits on borrowing– There is a limit on borrowings of the company which
has to be complied with unless the lender proves that it was in good faith
and without knowledge that the limit imposed in Section 180.

Ultra Vires or Unauthorised Borrowings

 There is a limit that has been set under which companies can borrow
money in the Act. If the companies go beyond and exceed the limit to
borrow money specified by the articles of the Act, it is ultra vires
borrowings. It is generally unauthorized borrowing as it is beyond the
authority of the directors. [iv] The Relationship of a debtor and creditor is
not created in an ultra-vires borrowing.[v]

 The concept of ultra vires originated in the famous case of Ashbury Railway
Carriage and Iron Co. Ltd. v. Riche where it was decided that the
contract between company and Richie was null and void as it was ultra
vires. [vi] The borrowings are generally inoperative.

 Importance – It is essential to protect the interest of shareholders and

creditors. In one of the cases, it was held by the Bombay High Court held,
“A shareholder can maintain an action against the directors to compel
them to restore to the company the funds of the company that have by
them been employed in transactions that they have no authority to enter
into, without making the company a party to the suit”.[vii]
 In the case of ultra vires or unauthorized borrowings, the company will be
liable to repay, it is shown that the money had gone into the company’s
pocket.[viii] The same was laid down in Krishan Kumar & others Vs. State Bank
of India.[ix]

Q7. Debentures - their issue, floating and fixed charges Powers?

The issue of Debentures for Cash
Debentures in accustomed progress of the business concern are circulated for cash.
Circulation of debentures that occurs can be categorised into 3 types, like the issue of
shares at a discount, at a premium and at par.

The issue of Debentures at Discount

When the debentures are circulated below the face value, this type of circulation of
debentures is called a discount issue. Say, for instance, the debenture possesses a
nominal value of 200/- but is issued for 190/-. This type of debentures is known to be
issued at a discount.

The issue of Debentures at Premium

The issue of debentures at a premium is when the money is charged more than the
nominal value. The premium amount charged to a special a/c is known as Securities
Premium Reserve A/c. This account shall be depicted on the liabilities side of the
Balance Sheet below the heading Reserves and Surplus. So, if a debenture with a face
value of 200/- is sold at 210/- then it is circulated at a premium.

Floating_
A debenture is a document put in place when a loan is granted to protect the company
or individual which lends money to a business. It gives lenders a priority position in the
list of companies or people who’ll get their payment if a company becomes insolvent.

The debenture defines the terms of the loan agreement, covering the total loan amount,
interest rate, repayment amount and any other charges that should be included. It
should be filed with the Registrar of Companies at Companies House within 21 days of
the loan being taken out.

Unfortunately, if it’s not filed, the debenture can be ignored by the business
administrator meaning the lender would have to join the list of unsecured creditors.

Is a debenture a floating charge?

A floating charge is a charge over a particular class of assets, such as inventory or
trade receivables. It isn’t possible to identify specific individual assets like this, as they
change day to day as a company runs its business. However, the moment a business
defaults, the charge will attach to all assets of that class that exist on that date; they’ll be
seized and sold as soon as possible. Often, both a fixed and floating charge will be
granted on the same loan

As we all know share capital is the main source of finance of a company. Such capital is
raised by issuing shares. Those who hold the shares of the company are called the
shareholders and are owners of the company. The company may need an additional
amount of money for a long period. It cannot issue shares every time. It can raise loans
from the public. The amount of loan can be divided into units of small denominations
and the company can sell them to the public. Each unit is called a ‘debenture’ and the
holder of such units is called a Debenture holder. The amount so raised is a loan for the
company. A debenture is the most important instrument and method of raising the loan
capital by the company. A debenture is like a certificate of loan or a loan bond
evidencing the fact that the company is liable to pay a specified amount with interest
and although the money raised by the debentures becomes a part of the company’s
capital structure, it does not become share capital. Introduction In every organization,
whether it operates on any scale, there is a need for funds, for conducting various
business activities. There has to be sufficient capital, based on the appetite of the
company, in order to ensure smooth functioning. There are various methods adopted by
companies to raise funds and capital, but some companies might opt for issuing
debentures, especially when there is a need for raising funds for the long term. The
shareholders are the company’s investors/owners. As the company’s equity assets are
depleted, it must seek financing help from outside sources such as External
Commercial Borrowing (ECB), Debentures, Bank Loans, and Public Fixed Deposits. A
provision for borrowing powers for the company is included in the memorandum of
association of a company. . As the funds raised by the issuance of shares would not be
enough to satisfy the company’s long-term financial needs. As a result, companies
choose to raise long-term capital through debentures.

Q8. , Functions and Duties af Directors and Managing

Directors?
Managing Director job profile

Managing Director is a professional responsible for the successful leadership and management of
company's business. Managing Director supervises and stirrs all company's operations, people
and ventures in order to maintain and grow business.

In order to attract Managing Director that best matches your needs, it is very important to write a
clear and precise Managing Director job description.

Managing Director job description

Are you an experienced Managing Director looking for an opportunity to advance your career?
Are you ready for a challenging and exciting endeavor that will require the investment of a lot of
hard work, dedication and all your experience?

If you are a passionate, inspiring and forward-thinking leader, we have the perfect job for you!

We are looking for a competent and experienced Managing Director to provide excellent strategic
leadership and assume responsibility for the successful leadership and management of our
business.
 Managing Director duties and responsibilities

 Develop and execute the company’s business strategies in order to attain goals
 Provide strategic advice to the board and Chairperson
 Prepare and implement comprehensive business plans
 Plan cost-effective operations and market development activities
 Establish company policies and legal guidelines
 Build long term, trusting relationships with shareholders, business partners and
authorities
 Oversee the company’s financial performance, investments and other business
ventures
 Supervise the work of executives providing guidance and motivation to drive
maximum performance
 Ensure a positive work environment
 Ensure performance appraisal, training and professional development activities
 Reward performance, prevent issues and resolve problems
 Execute public speaking and represetational apperances in a professional manner
 Analyze problematic situations and occurrences and provide solutions to ensure
company survival and growth
 Further develop and enhance company culture

Managing Director qualifications and requirements

 Previous working experience as Managing Director for (x) year(s)

 MA in business administration or similar relevant field
 Hands on experience in developing strategic and business plans
 In depth knowledge of market changes and forces that influence the company
 Familiarity with corporate law and management best practices
 Excellent organisational and time management skills
 Outstanding communication, presentation and leadership skills
 Superior quantitative and qualitative analytical skills
 Problem solver able to keep calm and efficient under pressure and in crisis

Q9. Prevention of management and Oppression. Winding Up of

company?
Oppression
Oppression is the exercise of authority or power in a burdensome, cruel, or
unjust manner.[1] It can also be defined as an act or instance of oppressing,
the state of being oppressed, and the feeling of being heavily burdened,
mentally or physically, by troubles, adverse conditions, and anxiety.

The Supreme Court in Daleant Carrington Investment (P) Ltd. v. P.K.

 Prathapan[2], held that increase of share capital of a company for the sole
purpose of gaining control of the company, where the majority shareholder is
reduced to minority , would amount to oppression. The director holds a
fiduciary position and could not on his own issue shares to himself. In such
cases the oppressor would not be given an opportunity to buy put the
oppressed.

Prevention of oppression
Section 397(1) of the Companies Act provides that any member of a
company who complains that the affair of the company are being conducted
in a manner prejudicial to public interest or in a manner oppressive to any
member or members may apply to the Tribunal for an order thus to protect
his /her statutory rights.

Sub-section (2) of Section 397 lays down the circumstances under which the
tribunal may grant relief under Section 397, if it is of opinion that :-

(a)the company’s affairs are being conducted in a manner prejudicial to

public interest or in a manner oppressive to any member or members ; and

(b) to wind up the company would be unfairly and prejudicial to such

member or members , but that otherwise the facts would justify the making
of a winding up order on the ground that it was just and equitable that the
company should be wound.

The tribunal with the view to end the matters complained of, may make such
order as it thinks fit.

Q10. . Aspects relating to Company Meetings.

1. Statutory meeting,
2. Annual general meeting,
3. Extraordinary general meeting,
4. Class meetings.

Statutory Meeting

Every company limited by shares and every company limited by guarantee

and having a share capital shall, within not less than one month and not
more than six months from the date at which the company is entitled to
 commence a business, hold a general meeting of the members of the
company.

This meeting is called the ‘statutory meeting.’ This is the first meeting of the
shareholders of a public company and is held only once in the lifetime of a
company.

Statutory report: The Board of directors shall, at least 21 days (based on

Companies Act) before the day on which the meeting is to be held, forward a
report, called the ‘statutory report,’ to every member of the company.

Procedure at the meeting;

a. List of members,
b. Discussion of matters relating to a formational aspect,
c. Adjournment.

Objects of the meeting and report;

1. To put the members of the company in possession of all the important facts
relating to the company.
2. To provide the members an opportunity of meeting and discussing the
management, methods, and prospects of the company.
3. To approve the modification of the terms of any contract named in the
prospectus.

Annual General Meeting

Company to hold an annual general meeting every year. Every company

shall in each year hold, in addition to any other meetings, a general meeting
as its annual general meeting and shall specify the meeting as such in the
notice calling it.

There shall not be more than 15 months between one annual general
meeting and the other. But the first annual general meeting should be held
within 18 months from the date of its incorporation.

The Registrar may, for any special reason, extend the time for holding an
annual general meeting by a period not exceeding 3 months. But no
extension of time is granted for holding the first annual general meeting.

Every annual general meeting shall be called during business hours on a day
that is not a public holiday.
 It shall be held either at the registered office of the company or at some
other place within the city, town, or village in which the registered office of
the company is situated.

As regards holding of the annual general meeting, no distinction is made

between a public company and a private company.

A general meeting of a company may be called by giving not less than 21

days’ notice in writing.

Annual general meeting a statutory requirement: The annual general

meeting of a company is a statutory requirement. It has to be called even
where the company did not function during the year.

Canceling or postponing of convened meeting: Where an annual

general meeting is convened for a particular date, and notice is issued to the
members, the Board of directors can cancel or postpone the holding of the
meeting on that date provided power is exercised for bona fide and proper
reasons.

Canceling of failure to hold an annual general meeting: If a company

fails to hold an annual general meeting:

 Any member can apply to the Company Law Board for calling the meeting.
 The company and every officer who is in default shall be punishable with a
fine.

Powers of Company Law Board to call an annual general meeting: If

a company makes the default in holding an annual general meeting, any
member of the company may apply to the Company Law Board for calling
such a meeting.

Penalty for default: If a company makes the default is holding a meeting

by Company Law or in complying with any direction of the Company Law
Board is calling a meeting, the company, and every officer of the company
who is in default, shall be punishable with fine.

Extraordinary General Meeting

A statutory meeting and an annual general meeting of a company are called

ordinary meetings.

Any meeting other than these meetings is called an extraordinary general

meeting. It is called for transacting some urgent or special business which
cannot be postponed till the next annual general meeting.
 It may be convened. (1) By the Board of directors On its own or on the
requisition of the members; or (2) by the requisitionists themselves on the
failure of the Board of directors to call the meeting.

a. The extraordinary meeting convened by the Board of directors. The Board of

directors may call an extraordinary general meeting:
i. On its own.
ii. On the requisition of the members.
b. An extraordinary meeting convened by the requisitionists Power of
Company Law Board to order meeting: If for any reason it is
impracticable for a company to call, hold or conduct an extraordinary general
meeting, the Company Law Board may call an extraordinary meeting.

Class Meetings

Under the Companies Act, class meetings of various kinds of shareholders

and creditors are required to be held under different circumstances.

Class meetings of the holders of different classes of shares are to be held if

the rights attaching to these shares are to be varied.

Requisites of a Valid Meeting

A meeting can validly transact any business if the following requirements are
satisfied;

1. The meeting must be duly convened by proper authority.

2. Proper notice must be served in the prescribed manner.
3. A quorum must be present.
4. A chairperson must preside.
5. Minutes of the proceedings must be kept.

Q11. Securities Exchange Board of India Act 1992

The Securities and Exchange Board of India Act, 1992 is an Act of the enacted for
regulation and development of securities market in India. It was amended in the years
1995, 1999 and 2002 to meet the requirements of changing needs of the securities
market.
It is the 15th Act of 1992. The Act provides for the establishment of Securities and
Exchange Board of India following the Harshad Mehta scam.
The Act contains 10 Chapters and 91 Sections.
 Contents

 1Preamble
 2Management of the Board
 3Functions of Board
 4See also
 5References

Preamble[edit]
The Securities and Exchange Board of India is the sole regulator of the Indian
Securities Market. Its Preamble describes its basic function as "...to protect the interests
of investors in securities and to promote the development of, and to regulate the
securities market and for matters connected therewith or incid thereto"[1]

Management of the Board[edit]

The management of Board is run by its members appointed by the central Government:
[2]

(a) Chairman
(b) Two members from the Ministry of Finance of the Union.
(c) One member from the Reserve Bank
(d) five other members.

Functions of Board[edit]
(1) Protect the interest of investors in securities market, regulate the
securities market in India.
(2) Registering the depositories, investment schemes, mutual funds.
(3) Promoting fundamental education needed to invest in securities
markets.[3]

Q12. Important Legal Provisions and implication

On book_