Through Section 117 of the new Act, The Government insisting every Indian company to register with the Registrar of
Companies certain decisions of the Board. The list is given below. Thus every
company has to register/file every year two resolutions (7 and 15 in the given
list) mandatorily. Penalties are stringent. Both company and defaulting officers are
liable to pay penalty.
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The Board of Directors of a company shall exercise the following
powers on behalf of the company by means of resolutions passed at meetings of
the Board, namely:—
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1
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to make calls on shareholders in respect of money unpaid on
their shares
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2
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to authorise buy-back of securities
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3
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to issue securities, including debentures, whether in or outside
India;
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4
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to borrow monies
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Nothing
in clause (d) shall apply to
borrowings by a banking company from other banking companies or from the
Reserve Bank of India, the State Bank of India or any other banks established
by or under any Act and dealings between a company and its bankers
the
Board may, by a resolution passed at a meeting, delegate to any committee of
directors, the managing director, the manager or any other principal officer
of the company or in the case of a branch office of the company, the
principal officer of the branch office
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5
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to invest the funds of the company
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the Board may, by a resolution passed at a
meeting, delegate to any committee of directors, the managing director, the
manager or any other principal officer of the company or in the case of a
branch office of the company, the principal officer of the branch office
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6
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to grant loans or give guarantee or provide security in respect
of loans
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the Board may, by a resolution passed at a
meeting, delegate to any committee of directors, the managing director, the
manager or any other principal officer of the company or in the case of a branch
office of the company, the principal officer of the branch office
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7
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to approve financial statement and the Board’s report
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This is to do every year
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8
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to diversify the business of the company
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9
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to approve amalgamation, merger or reconstruction
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10
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to take over a
company or acquire a controlling or substantial stake in another company
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The following items prescribed through rules:
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11
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to
make political contributions
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12
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to
appoint or remove key managerial personnel (KMP);
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13
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to
take note of appointment(s) or removal(s) of one level below the Key
Management Personnel;
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14
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to
appoint internal auditors and secretarial auditor
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15
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to
take note of the disclosure of director’s interest and shareholding
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Every financial year a Director
has to disclose his interests in other companies, firms etc to the company and
the Board in its first meeting in the financial year has to read and approve
the disclosure notices of Directors.
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16
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to
buy, sell investments held by the company (other than trade investments),
constituting five percent or more of the paid up share capital and free reserves
of the investee company
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17
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to
invite or accept or renew public deposits and related matters
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18
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to
review or change the terms and conditions of public deposit
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19
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to
approve quarterly, half yearly and annual financial statements or financial
results as the case may be
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Section 117
(3)(g) provides that all decisions of the Board Meeting as listed above
should be filed with the Registrar within thirty days of the passing or
making of resolution/agreement.
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Section 117 (2) provides the
penalty clause for default:
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THE
COMPANY shall be punishable with fine which shall not be less than five lakh rupees but which may extend
to twenty-five lakh rupees and
EVERY
OFFICER OF THE COMPANY who is in default, including liquidator of
the company, if any, shall be punishable with fine which shall not be less
than one lakh rupees but which may extend to five lakh rupees.
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Section 403(2) further
provides that: Where a company fails or commits any default to submit, file,
register or record any document, fact or information before the expiry of the
prescribed period with additional fee,
the
company and the officers of the company who are in default, shall,
without prejudice to the liability for payment of fee and additional fee, be
liable for the penalty or punishment provided under this Act for such failure
or default.
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Important points
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1.
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Every company should register (by filing form with Registrar of
Companies)the disclosure of interests by Directors probably before July 30
every year (within 30 days of Ist quarter Board Meeting)
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2.
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Every company should register the approval of financial
statements and directors report probably before the end of the second quarter.
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(Company Secretary)
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