This is the basic law which governs the creation,continuation, the winding up of companies and also the relationships betweenthe shareholders, the company, the public and the government. This circular will apply till section 186 is notified, and if and when section 186 is notified, there will be again ambiguity as section 186 does not grant exemptions in holding and wholly owned subsidiary cases like section 372a does. Section 372a of 1956 act covers only body corporate, whereas section 186 of the 20 act covers perons and body corporate. Main provisions of companies act 1956 presented by.
Companies declaration of beneficial interest in shares rules, 1975 view download. Companies branch audit exemption rules, 1961 view download. Section 372a of the companies act, 1956 the act deals with intercorporate loan, investment, guarantee and securities in connection with loan. Group 1 aarti singh, azhar hussain, jyoti nawlani, nemchand meena, renuka sharma companies act. Be it enacted by parliament in the sixth year of the republic of india as follows 1.
Companies compliance certificate rules, 2001 view download. Comparison of section 186 of companies act, 20 and section. An act to consolidate and amend the law relating to companies and certain other associations. Definitions of company, existing company, private company and public company 4. These bonds carry a lower rate of interest, currently in the range of 6. Companies act 1956 by study material lecturing notes pdf. Resolved that pursuant to the provisions of section 372a and other applicable provisions, if any, of the companies act, 1956 hereinafter referred to as the act or any. Clarification under section 372a3 of the companies act,1956. Applicability of section 372a companies act 1956 abcaus. All the four transactions are frequently taken place in any company and henceforth the section becomes more important and therefore it requires to special heed by virtue of strict penal provisions and. Section 372 a of the companies act, 1956 deals with the inter corporate loan and investment. Introductionwhat is company a company is an artificial person created by law. Special resolution through postal ballot under the provisions of section 372a of the companies act, 1956. A company is defined as, a company formed and registered under this act or an existing company.
Section 372a of the companies act, 1956, specifically exempts any loans made, any guarantee given or security provided or any investment made by a holding company to its wholly owned subsidiary. Power of company law board to call annual general meeting. Companies act, 1956 bare acts law library advocatekhoj. Appointment under previous companies laws to have effect as if made under act 653. Under the companies act, 20 inter corporate loans and investment plays a very vital role for the growth of industries as there is result in the flow of funds for the group companies or other companies who are in the need of funds. Section 31i of the companies act, 1956 defines a company as. Clarification on section 372a of the companies act, 1956. Section 372a of the companies act, 1956, specifically exempts any loans mode, any guarantee given or security provided or any investment mode by d holding company to its wholly owned subsidiary. Content introduction definition characteristics of a company types of company 2. May 19, 2020 provisions related to producer companies under companies act, 1956 part ixa of companies act, 1956 part ixa of the companies act, 1956 is not repealed and even though the companies act, 20 is made fully operative, the provisions of this part relating to producer companies, will continue to be operative as part of the. Register of investments in any shares or securities not held in its own name. The issue has been examined with reference to applicability of section 372a of the companies act, 1956 visavis section 185 of the companies act, 20. Companies acts section 185, 186 and 372a ambiguities come. Registers under previous companies laws to be deemed to be part of registers under act 655.
The act contains the mechanism regarding organizational, financial, and managerial, all the relevant aspects of a company. Powers of the board of directors of a company as per the indian companies act, 1956 article shared by all the powers that a company is vested with can be exercised by the board of directors of the company, subject to the applicable law. The board of directors of the investing company shall be entitled to invest in any shares of any other body corporate up to such percentage of the subscribed equity. Clarification on section 185 of the companies act, 20 assets. Funds and accounts under act to be in continuation of funds and accounts under previous companies taw 656. The companies act, 1956 memorandum of association of the federation of indian mineral industries new delhi limited by guarantee and not having a share capital name 1. Companies act, 1956 for inspection of general minutes book us. In the new act, many sections from the old act were amended among which one section 372a which dealt with inter corporate loan, investment, guarantee, and security. Section 372a of the companies act,1956 corporate law forum. This is a ready reckoner for the information of stakeholders. Provisions related to producer companies under companies act. The indian companies act, 1956 basic concept the word company. The name of the company hereinafter called the federation is the federation of indian mineral industries. The explanation provided in section 372a of companies act, 1956 to the effect that loan includes debentures or any deposit of money made by one company.
Section 372a inter corporate loaninvestmentguarantee. X x x x extracts x x x x b extracts may be taken therefrom and copies thereof may be required, by any member of the company to the same extent, in the same manner, and on payment of the same fees as in the case of the register of members of the company. Section 372 in the companies act, 1956 indian kanoon. Comparison of section 186 of companies act, 20 and. There is no such condition in section 185 of companies act, 20 and section 372a of companies act, 1956. Mar 17, 20 the ministry of corporate affairs mca vide its general circular no. These are created by special act of the legislature e. Registered companies are those companies which are registered or incorporated with the registrar of companies as per the provisions of the companies act. In computing at any time the percentages specified in sub section 2 and the provisos thereto, the aggregate of the investments made by the investing company in other body or bodies corporate whether before or after the commencement of the companies amendment act, 1960 65 of 1960, up to that time shall be taken into account. Resolved that pursuant to the provisions of section 372a and other applicable provisions, if any, of the companies act, 1956. Whether this will amount to investment under the provisions of section 372a of the companies act, 1956 for the listed company.
Inter corporate loans and investments law times journal. Powers of the board of directors of a company as per the. Company law tribunal, mumbai bench, mumbai register of charges us. All the four transactions are frequently taken place in any company and henceforth the section becomes more important and therefore it requires to special heed by virtue of strict penal provisions and because of no much space to play. The companies act, 1956 memorandum of association of the.
Section 372a of the companies act legal service india. Here is the pdf file for companies act, 20 and 1956. In a jv company wherein the indian listed company is providing know how and in lieu of that the jv company is allotting shares of 25%. Analysis of section 186 pursuant to companies amendment act. Companies act the companies act is a successor to the indian companies act of 19 and is a consolidation of many successive amendment acts, statutory rules and principles laid down in decisions of. Lesson 16 intercorporate loans, investments, guarantees and. Table containing provisions of companies act, 20 as notified up to date and corresponding provisions thereof under companies act, 1956 note. Companies disqualification of directors under section 2741g of the companies act, 1956 rules, 2003. In this connection, it is hereby clarified that registers maintained by companies pursuant to subsection 5 of section 372a of companies act, 1956 may continue as per requirements under these provisions and the new format prescribed vide form mbp2 shall be used for particulars entered in such registers on and from 1. Subject to the provisions of the act, the board of directors of a company shall be entitled to exercise all such powers, and to do all such acts and things, as the company is authorised to exercise and do. Companies act 1956 is applicable to the statutory companies. May 29, 2008 section 291 of the companies act, 1956 confers general power on the board of directors. Nov 20, 20 clarification on section 372a of the companies act, 1956.
The word person has not been defined under the 20 act. References in the foregoing provisions of this section to shares shall in the case of investments made by the investing company in other bodies corporate in the same group. Please refer to the relevant notifications and circulars issued separately. Classification on the basis of incorporation statutory companies. As per section 231 of the income tax act 1961, person includes. Companies act 1956, 20 pdf bare act, bare act pdf, law. In which it has been clarified that section 372a,which deals with inter corporate loans remain effective till section 186 the. Section 186 of companies act, 20 loan and investment by. When such an association of persons is registered under the companies act, it becomes an artificial person with perpetual succession and common seal. Provisions as to certain loans which could not have been made if sections 369 and 370 were in force. Further, the exemption available from the provisions of section 372a of the 1956 act to private companies as well as loans or investment given or made by a holding company to its subsidiary company are no longer. Table containing provisions of companies act, 20 as.
Resolved that pursuant to section 372a and other applicable provisions, if any, of the companies act, 1956 and subject to the approval of. Under the companies act, 20 inter corporate loans and. Company law intercorporate loans and investments under. Register of loans made, guarantees given, securities provided or. Mca clarification under section 372a3 of the companies act. Companies act, 1956 section 303 to 674 latest laws. In the matter of companies act, 1956 under sections 163 v. Notice pursuant to section 192a of the companies act, 1956 read with. Updated and amended bare acts in pdf format of companies act 1956 and companies act 20. Clarification under section 372a3 of the companies act,1956 it is observed from the budget 2014 authorizes union govt. The issue hos been examined with reference to applicability of section 372a ol the companies act, 1956 visavis section 185 of the companies act. Be it enacted by parliament in the sixth year of the republic of india as follows. Mar 05, 2015 section 372a of 1956 act covers only body corporate, whereas section 186 of the 20 act covers perons and body corporate. Introduced by companies amendment act 2000 which came into force w.
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