Companies Act

Ans: The President postpones the punishment using power of Reprieve under Article 72 of Indian constitution. 

Ans:  Steps to be followed for appointing an independent director are as follows:  Step 1: Identification based on independence criteria An independent director may be selected from a databank containing names, addresses and qualifications of persons who are eligible for this purpose. This databank is to be maintained by any entity authorized by the Central Government and will be uploaded on the Ministry of Corporate Affairs website. This is only for a facilitative purpose - a company is allowed to select any other person as independent director, provided the person meets. Step 2: Shareholder approval The appointment of independent Directors shall be approved at the meeting of the shareholders. The explanatory statement attached to the notice of the meeting shall include a statement that the independent Director proposed to be appointed fulfills the conditions mentioned in the Act. Step 3: Issue of appointment letter by board and obtaining declaration from director The appoint...

Ans:  Independent directors shall be held liable only for acts or omissions by a company which occurred with their knowledge, with their consent or connivance or where they did not act diligently. This will ensure that the independent directors can work honestly, and take decisions without the fear of being trapped in a false case.

Ans: Remuneration of independent directors It is essential that an independent director continues to remain 'independent', and hence remuneration is inconsistent with independence, barring certain conditions. An independent director shall not receive any stock option or remuneration except for attending meetings, reimbursement of expenses for participation in the meeting and may receive profits subject to the approval of shareholders. The sitting fee for independent directors shall not be less than the sitting fee payable to other directors. This was to ensure that there is no financial nexus between independent directors and the company. Equating the fee of independent directors and other directors will ensure that they do not feel they are at disadvantage. 

Ans:  Companies Act also mentions the Stakeholders Relationship Committee - this must be constituted by all companies which have more than 1000 holders of securities (shares, debentures or other securities). Stakeholder's Relationship Committee is one of the important committees within the organization responsible for looking after the interest of shareholders, debenture holders & other security holders; and. resolving the grievances of such security holders. The size of the committee can be determined by the board however, it is essential that the chairperson is a non-executive director (that is, someone who is not involved in day-to-day operations of the company and is not an employee of the company). An independent director must comply with other functions and duties mentioned under Code of Conduct provided under Schedule IV of the Companies Act, 2013.

Ans:  The composition of the board committee is given below : Name of the committee: 1. Corporate social responsibility committee: A company which meets the following conditions: Net worth of Rs 500 crores or more. Turnover of Rs 1000 crores or more. Net profit of Rs 5 crores or more. Size of the committee and number of independent directors required in corporate social responsibility: 3 or more directors and atleast one should be an independent director.  There is no restriction on the remaining directors being the full time directors.  2. Nomination and Remuneration Committee: Listed Companies and unlisted public companies which satisfy any of the following conditions: Paid up capital of Rs 10 crores or more. Turnover of Rs 100 crores or more. Outstanding loan borrowings, debentures or deposits of Rs 50 crores or more. 3 or more non executive directors (with atleast half, i.e., 2 or more independent directors) . 3. Audit Committee: Listed Companies + unlisted public c...

Ans:  In order for the independent directors to efficiently perform their role, the companies appointing them have been placed under an obligation to familiarise the independent directors with different aspects of the listed entity including: nature of the industry in which the listed entity operates; business model of the listed entity; his roles, rights, and responsibilities as an independent director; other relevant information which can include material ongoing projects, significant investments etc. (Regulation 25 of the SEBI (LODR) Regulations, 2015. It is mandatory for all independent directors of the company to meet at least once annually (without the presence of non-independent directors and members of the management) they are required to evaluate the performance of the company's chairperson, non-independent directors and the board as a whole at these special meetings. This provides the independent directors freedom to assess the company's performance and take impartial...

Ans: The liability of estate of deceased partner is mentioned under section 35 of partnership act whereas the right of outgoing partner to carry on competing business is mentioned under Article 36 and right of outgoing partner in certain cases to share subsequent profits is mentioned under section 37 of partnership act. 

Ans: The partners are mentioned under Section 31, 32 , 33 and 34 of partnership act,  1932.  The introduction of partner is mentioned under section 31 of partnership act.  The retirement of partners is mentioned under section 32 of partnership act. The expulsion of partner is mentioned under section 33 of partnership act.  The Insolvency of partner is mentioned under section 34 of partnership act. 

Ans: No,  Judicial stamp can not be used in partnership deed.  Judicial stamps are paid under court fees act, 1870 and Non Judicial Stamps are paid under Indian Stamp Act, 1899 and the respective state amendments.

Ans: PARTNERSHIP NOT CREATED BY STATUS.  In accordance with section 5 of partnership act, 1932, the relation of partnership arises from contract and not from status; and, in particular, the members of a Hindu undivided family carrying on a family business as such, or a Burmese Buddhist husband and wife carrying on business as such are not partners in such business.  According to section 5 of contract act, 1932, the partnership is not created by status. The relation of partnership arises: From Contract; and not from status. Example 1:  Members of Hindu undivided family (Joint Family) carrying on a family business together. The family members are not partners of each other because although,  they are carrying business together but the relationship between them has not arisen from Contract but due to their family status according to their religion. Example 2: A Burmese Buddhist husband and wife carrying on business together according to their religion. The husband and w...

Ans: In accordance with section 4 of partnership act, 1932:  Partnership is the relation between persons who have agreed to share the profits of a business carried on by all or any of them acting for all.  Persons who have entered into partnership with one another are called individually, "partners" and collectively "a firm", and the name under which their business is carried on is called the "firm-name". So persons individually are partners and collectively makes a firm and the name under which business is carried on is the firm- name.  To make partnership,  partnership deed is required. If two persons agree to share profits, they become partners in partnership firm. 

Ans: The company act, 2013 comprises of 470 sections , 29 chapters and 7 schedules whereas partnership act, 1932 comprises of 74 Sections and 2 schedules.  

Ans: The partnership firm is governed by Indian Partnership Act, 1932 and state rules.  The partners individually and collectively make firm. Generally in every act, the powers are given to make rules. In Indian Partnership Act, the power to make rules are given to state government. The parties in partnership firm are called the partners. Contract is essential and basis of a partnership firm. Term is governed by the Agreement/ Deed. If silent,  it is 'partnership at will '. All terms can be decided by the partners,  and in absence of any specific term the relevant sections of the Act will apply. The minimum number of partners are two. The maximum number of partners are 50. Companies Act, 2013( Section 464), Companies Miscellaneous) Rules, 2014( Rule 10) . All terms can be decided by the partners,  and in absence of any specific term the relevant sections of the Act will apply. Each partner is the agent of other partner and this relationship is called Principal Agent ...

Ans: Though an OPC and sole proprietorship have only one person/member, their functioning differs.   OPC has the features of a company, while the sole proprietorship does not enjoy the benefits of a company . Thus, the sole proprietor has unlimited liability, and the business does not have perpetual succession. The sole proprietorship is registered under shop and establishment act of states.  In company law, perpetual succession is the continuation of a company's/corporation's or other organization's existence despite the death, retirement, bankruptcy, insolvency, insanity, change in membership or an exit from the business of any owner or member, or any transfer of stock etc.

 Ans:  1. Partnership firm requires partnership deed whereas incorporation of company requires memorandum of association and articles of association.   2. A member whose name is entered in the register of members of company is member of company. It is not mandatory that the member will be the the shareholder. The minimum number of members in the partnership firm are 2 and minimum number of members for private limited company are 2 and minimum number of members for public limited company are 7 and one for one person company.  3. The maximum number of partners in partnership firm are 100.  The maximum number of members in private limited company are 200 and maximum number of members in  public limited company are unlimited.  4.  The company comprises of members and directors.  Thus minimum number of directors as per section 149(1) of companies act are 2 in case of private limited company and 3 in case of public limited company and one for ...

Ans: Section 5(3) which implies that certain provisions within the Articles of Association will not be alterable by merely passing a special resolution, and will require a much more lengthy and elaborate process. x

Ans: Memorandum of association is a public document according to Section 399 of the Companies Act, 2013. Hence, any person who enters into a contract with the company is expected to have knowledge of the MOA. It contains details about the powers and rights of the company and not about company 's persons. 

Ans:1.  Memorandum of Association refers to a charter document that encloses key detail which is necessary for company’s incorporation.  Articles of Association refer to documents that contain all the norms and rules that regulate the company. 2. Memorandum of association is subordinate to the governing Act whereas Articles of Association is subordinate to Memorandum of Association. 3. The memorandum of association can not be amended retrospectively whereas the Articles of Association can be amended retrospectively. 4. A memorandum of association has six fundamental clauses whereas the articles of association can be prepared as per the company’s requirement. 5. Memorandum of association is obligatory for all companies whereas Articles of Association is obligatory for private companies while a public limited company limited by shares can opt for Table F in place of articles. 6. Memorandum of Association can be subjected to alteration after passing speci...

  Ans: According to section 2(56) of Companies act, 2013, the memorandum of association are of two types i.e., memorandum of association as originally framed and memorandum as altered from time to time.  According to section 2(5) of companies act, 2015, articles of association are of two types as articles of association originally framed and articles of association as altered from time to time.