Incorporation of Company and Matters Incidental Therato

The Articles of the Company shall be in respective forms specified in Table F

(Schedule ‐ I), as may be applicable on the Company
Every Company shall paint or affix the name and address of registered office
and keep the same painted/affixed, outside every office or place in which its
business is carried on, in conspicuous position and legible letters.
Every Company shall get its name, address of registered office, CIN,
telephone/fax no. (if any) and email/website address (if any) printed on all
business letters, billheads, letter papers, Notices and other official publications

Alteration of AOA to be done through a Special Resolution.

Every alteration of Articles shall be filed with Registrar within 15 days of
alteration, together with copy of altered Articles
Every alteration made in MOA and AOA shall be noted in every copy thereof
Management and Administration

Entry in the Register to be done within 7 days of approval

Closure of Register of Members by giving not less than 7 days Notice in English
and Hindi languages in respective newspapers
Annual Return to be prepared in Form No. MGT‐7 to be filed with ROC within
60 days of AGM
Certificate from PCS in Form MGT‐8 to be filed with Annual Return
Form MGT‐10 to be filed with ROC within 15 days of any change
(increase/decrease) for 2% or more, in shareholding position (value/volume) of
promoters and top ten shareholders
AGM to be called during business hours (9AM to 6PM) except National Holiday,
in the same city where the Registered Office is situated
General meeting can be convened by providing clear 21 days notice, either in
writing or in electronic mode
Notice shall be given to every member, legal representatives, auditors and
directors of the Company
Explanatory Statement annexed to Notice for special business shall provide
requisite disclosures w.r.t. to directors, KMP, their relatives and promoters
(only for shareholding)
Proxy shall have no right to speak or vote except on poll and one person not to
be proxy for members exceeding 50 in numbers or holding not more than 10%
of shareholding of the Company
Proxy Form shall be in Form MGT‐11
E‐voting facility at general meeting is mandatory for every listed company and
companies having shareholders 1000 or more.
Specified items to be transacted through Postal Ballot.
‐ Copy of every resolution (with explanatory statement, if any) or Agreement
for the specified matters to be filed with ROC in Form MGT‐14 within 30 days ‐
Article of Company shall have copy of resolution effecting amendment in AOA
and Agreements referred in Section 117(3) of the Act ‐ Section 117(3) inter‐alia
includes resolution passed under Section 179(3) ‐ Power of the Board

‐ Minutes of every general meeting, Creditors, Board, Committee and postal

ballot shall be prepared and kept within 30 days of conclusion of every meeting
concerned. ‐ All appointments in the meeting shall be included in the minutes.

Every Company shall observe Secretarial Standards w.r.t. General and Board
Meetings, issued by ICSI and approved by CG
‐ Minutes of each meeting shall be entered into Minutes Book along with date
of such entry, within 30 days of conclusion of meeting. ‐ Specific requirements
for noting of postal ballot resolutions. ‐ Every page to be initialed/signed with
last page to be signed and dated.
Every listed company and company having not less than 1000
shareholder/debenture holder/security holder, shall maintain its records in
electronic form
‐ Every listed public company to prepare a report on each AGM in the
prescribed format and file the same with ROC in Form MGT‐15 within 30 days
of conclusion of AGM ‐ Report shall include specific matters and shall be signed
and dated by Chairman and CS

Appointment and Qualification of Directors

Following class of companies shall have woman director: - every listed

company; - Other public company having paid-up share capital of Rs. 100 Crore
or more; - Other public company having turnover of Rs. 300 Crore or more

Every company shall have at least 1 director resident of India for a total period
of not less than 182 days in previous calendar year
Every listed company shall have at least one‐third of total number of directors
as independent director
Following class of public companies shall have at least 2 Independent Directors:
‐ Public company having paid‐up share capital of Rs. 10 Crore or more; ‐ Public
company having turnover of Rs. 100 Crore or more; ‐ Public company having
aggregate outstanding loan, debentures and deposits exceeding Rs. 50 Crore.

Every independent director shall give a declaration that he meets the criteria of
independence as under: ‐ at the first meeting in which he participates as a
director ‐ at the first meeting of the Board in each financial year ‐ whenever any
change in circumstances which affects his status as independent director

Company and Independent Director shall abide by Schedule IV (Code for

Independent Directors)
‐ An Independent Director shall hold office for a term up to five consecutive
years. Shall be eligible for re‐appointment on passing of special resolution and
disclosure of such appointment in Board Report ‐ Provisions pertaining to
retirement of directors by rotation shall not be applicable to Independent
Directors.
Appointment of Independent Director shall be approved in General Meeting
and explanatory statement shall indicate justification for choosing such person

No person shall be appointed as Director unless he has been allotted a DIN

Every person to be appointed as Director shall provide his consent in Form DIR‐
2 and such consent shall be filed by the Company with ROC in Form DIR‐12
within 30 days
For appointment of Independent Director in general meeting, explanatory
statement to Notice shall include a statement that in the opinion of Board, the
independent director fulfills the conditions of appointment as specified in the
Act
‐ Subject to AOA, 2/3 of the total number of directors shall be rotational
directors and be appointed in general meeting. ‐ Independent Directors shall
not be rotational directors ‐ 1/3 of the rotational directors shall retire from
office
Provisions related to DIN

A non‐retiring director shall be eligible for appointment as director, provided a

member nominates him at least 14 days before the meeting and deposits Rs. 1
Lacs (refundable on successful appointment)
Subject to AOA, Board may appoint Additional Director who shall hold office up
to the date of next AGM
Subject to AOA, Board may appoint Alternate Director in place of a director
who is not in India for a period not less than 3 months
Subject to AOA, Board may appoint a nominee director
Board of public companies may appoint a director in casual vacancy at its
meeting, subject to regulations of AOA
‐ Disqualification for appointment of director ‐ Declaration from Director at the
time of appointment or re‐ appointment in Form DIR‐8 ‐ Annual disclosure from
Director to be taken
‐ No person shall be a director in more than 20 companies ‐ Maximum number
of public companies can be 10
Vacation of office of Director, inter‐alia ‐ incurs disqualification in section 164; ‐
absents from all meetings in 12 months, with or without leave of absence; ‐
breach of RPT disclosure
‐ Director to intimate his resignation to the Company, which the Company shall
file with ROC in Form DIR‐12 in 30 days ‐ Company to put resignation details on
its website and in its Directors' Report ‐ Director is also required to send his
resignation letter director to ROC within 30 days in Form DIR‐11, along with
reasons of resignation
Every Company to keep at its Registered Office, a Register of Directors and KMP
in the prescribed format containing prescribed particulars
Return of Directors and KMP to be filed with ROC in Form DIR‐ 12, within 30
days of appointment or change
Register of Director and KMP to be open for inspection for members at
Registered Office and also at AGM
Meetings of Board and its Powers

Minimum number of four Board Meetings every year with not more than 120
days gap between two meetings
Board Meeting through Video Conferencing
At least 7 days' Notice for the Board Meeting. Notice to be delivered by
hand/post/electronic mode
‐ Meeting can be convened on a shorter notice for urgent matters, with
presence of at least one independent director, if any ‐ In case of absence of
independent director, decision taken shall be circulated to all the directors and
shall be final only on ratification by at least one independent director, if any

‐ Quorum shall be one‐third or two directors, whichever is higher ‐ Directors

participating through VC shall be counted for the purpose of Quorum
If number of interested directors exceed 2/3 of total directors, the directors
present at the meeting shall form quorum (not less than 2)
‐ For passing resolution by Circulation, the draft resolution to be circulated to
all directors/members by hand delivery/post/courier/electronic mode and
approved by majority of directors entitled to vote ‐ Resolution to be noted in
the subsequent Board / Committee Meeting and made part of the minutes

Following class of companies shall have Audit Committee: ‐ every listed

company; ‐ all public companies having paid‐up share capital of Rs. 10 Crore or
more; ‐ all public companies having turnover of Rs. 100 Crore or more; ‐ all
public companies having outstanding loan/debt/deposits exceeding Rs. 50
Crore
‐ Audit Committee shall have minimum three directors with independent
director forming majority ‐ Majority of Audit Committee members, including
Chairman, shall have ability to read and understand financial statements

Every Audit Committee shall have specified terms of reference

Composition of Audit Committee to be disclosed in the Board Report along with
recommendation of Committee, not accepted by Board, if any
Following class of companies shall have Vigil Mechanism for directors and
employees: ‐ every listed company; ‐ all public companies which accepts
deposits from public ‐ all public/private companies having borrowing from
banks/FI exceeding Rs. 50 Crore
Following class of companies shall have Nomination and Remuneration
Committee: ‐ every listed company; ‐ all public companies having paid‐up share
capital of Rs. 10 Crore or more; ‐ all public companies having turnover of Rs.
100 Crore or more; ‐ all public companies having outstanding
loan/debt/deposits exceeding Rs. 50 Crore
‐ Nomination and Remuneration Committee shall consists of three or more
non‐executive directors, with not less than one‐ half shall be independent ‐
Chairperson (ED/NED) of the Company may join as member but not as
Chairman of the Committee
Every Company having more than 1000 shareholders/security holders shall
constitute a Stakeholder Relationship Committee, with a Non‐Executive
Director as Chairman and such other member as decided by Board
Board to exercise certain powers by a resolution at its meeting only
Board to exercise following powers only with prior approval of shareholders by
Special Resolution: ‐ Sell, Lease or dispose‐off Undertaking or substantial the
whole of Undertaking; ‐ To invest otherwise in trust securities; ‐ To borrow
money in excess of paid‐up capital and free reserves; ‐ To give time to director
for re‐payment of debt
Board of public companies may appoint a director in casual vacancy at its
meeting, subject to regulations of AOA
Every director at: ‐ First meeting in which he participates as director; ‐ First
meeting of Board in every FY; ‐ Whenever there change in disclosures shall
disclose in Form MBP‐1, his concern or interest in any company, body
corporate, firm or other association of individuals (including shareholding
interest)
‐ Director shall disclose nature of his interest or concern with: a) body
corporate in which director or in association with other directors, holds more
than 2% shareholding of that body corporate OR is a promoter, manager or CEO
of that body corporate; b) firm or other entity in which such director is a
partner, owner or member, as the case may be ‐ Director shall not participate
in such meeting

Section 184 shall not apply to any contract or arrangement, between two
companies, where any director of one company together with other director,
hold not more than 2% of paid‐up share capital of the other company

Unless specifically provided, no Company shall, directly or indirectly, advance

any loan/guarantee or security in connection with loan, to any director or any
other person in which such director is interested
'Any other person in which Director is interested' shall include: ‐ any director of
lending company or of a company which is its holding company or any
partner/relative of such director; ‐ any firm in which such director or relative is
partner; ‐ any private company in which such director is director or member; ‐
body corporate at general meeting of which 25% or more of voting power is
exercised/controlled by one or more directors; ‐ body corporate, whose Board
of Directors, MD or Manager is accustomed to act in accordance with directions
and instructions of the Board or any Director of lending company

This shall not apply to: a) giving of loan to MD/WTD as a part of condition of
services extended to all employees OR pursuant to scheme approved by
members as Special Resolution b) a company which in ordinary course of
business provides loan/guarantee/security with ROI being charged not less than
bank rate declared by RBI
The Section 185 shall not apply to: ‐ Any loan made by holding company to its
WOS or guarantee/security by holding company to any loan made to WOS ‐ Any
guarantee/security by holding company to any loan made by Bank / FI to
subsidiary company The loan should be utilized for principal business activity

Company not to make investment through more than two layers of investment
companies. Exceptions: ‐ Acquiring companies outside India, if such company
has investment subsidiaries beyond 2 layers as per local law ‐ Required for the
purpose of meeting any law or rules/regulations framed thereunder

No Company shall directly/indirectly: ‐ give any loan to any person or other

body corporate; ‐ give guarantee/security in connection with loan to any
person/body corporate; ‐ acquire by way of subscription, purchase or
otherwise, securities of any body corporate exceeding 60% of paid‐up share
capital, free reserves and securities premium account OR 100% of free reserves
and securities premium account, whichever is more

‐ In case of exceeding the limits, prior approval of shareholders by special

resolution shall be required. ‐ Special Resolution not required in case of
loan/guarantee/security to WOS or JV OR acquisition by holding company in
WOS
Disclosure to be made in financial statements
Unanimous Board approval at the meeting is required for all
investment/loan/guarantee/security
No loan shall be given at the rate lower than prescribed yield rate
‐ Every Company to maintain Register in manual/electronic form in Form MBP‐2
from the date of incorporation, kept at the Registered Office ‐ Entries to be
made chronological order, within 7 days of such event and authenticated by CS

Section 186 shall not apply to: ‐ Banking company, insurance company, housing
finance company, business finance company, infrastructure companies; ‐ to any
acquisition made by NBFC OR investment company OR Right Issue;

All investments made or held by Company in any property, security or other

assets shall be made and held in its own name. Exception ‐ Holding of shares in
subsidiary companies in the name of any nominee or nominees of the
Company, to ensure number of members are not reduced below statutory
limits
‐ Every Company to maintain Register in Form MBP‐3 from the date of
registration and kept at the Registered Office ‐ Entries to be made chronological
order, along with necessary details and authenticated by CS
No company shall enter into any contract or arrangement with any Related
Party without prior approval of the Board of Directors and shareholders.
Exception: ‐ Ordinary Course of Business; and ‐ Arms' Length
Every Company shall keep one or more registers in Form MBP‐ 4 containing the
particulars of all contracts to which section 184(2) and 188 applies. After
entering the details, the Register shall be placed before the next Board Meeting
and signed by all directors present Exception: ‐ Any contract or arrangement for
sale, purchase or supply of any goods, material or services not exceeding Rs. 5
Lacs ‐ Banking Company for collection of bills in ordinary course of business

Every director and KMP shall, within 30 days of appointment/relinquishment of

office, shall disclose to the Company particulars specified in Section 184(1),
which shall be entered into the Register. Exception ‐ Companies/Body
Corporates in which director himself or together with other directors holds 2%
or less of paid‐up share capital shall not be required to entered in Register

‐ Register shall be kept at the Registered Office ‐ Entries in the Register shall be
made at once in chronological order and shall be authenticated by CS

Appointment and Remuneration of Managerial Personnel

No Company shall appoint MD and Manager at the same time

No Company shall appoint/re‐appoint MD, WTD or Manager for a term
exceeding 5 years at a time
MD, WTD or Manager to appointed and terms/remuneration to be approved by
the Board at its meeting, subject to shareholder's approval at next general
meeting and CG, if applicable
Return of appointment of MD/WTD/Manager/CEO/CS/CFO to be filed with ROC
in Form MR‐1 within 60 days of appointment
Total Managerial Remuneration of a public company not to exceed 11% of net
profits.
The cap of 11% can exceed subject to shareholders and CG approval
Except with approval in general meeting: ‐ MR to one MD/WTD/Manager not to
exceed 5% ‐ MR to all such MD/WTD/Manager not to exceed 10% ‐ MR to NED
not to exceed 1% (in case there is MD etc.) and 3% (in case there is no MD etc.)

MR not to include Sitting Fees

In case of inadequate / no profits, MR to be paid in accordance with Schedule V
and CG approval, as the case may be
‐ Sitting Fees can be paid to any Director for attending meeting of Board or
Committee thereof or for any other purpose as may be decided by the Board ‐
Sitting Fees shall not exceed Rs. 1 Lac per meeting ‐ Sitting Fees for Women
Director and Independent Director shall not be less than sitting fees for other
directors
No Stock Option to Independent Director and remuneration only by sitting fees,
commission and reimbursement
Every Listed Company to disclose the ratio of remuneration of directors to
median salary of employee ‐ Disclosures shall also include particulars
mentioned in Rules
CG approval for Managerial Remuneration in excess of limits
Every Listed Company and Public Companies having paid‐up share capital of Rs.
10 Crore or more shall have following whole time KMP: ‐ MD or CEO or
Manager or in their absence WTD; ‐ CS; ‐ CFO
Every KMP shall be appointed by Board Resolution containing terms and
conditions of the appointment, including remuneration
Every Listed Company and Public Companies having: ‐ Paid‐up capital of Rs. 50
Crore or more; ‐ Turnover of Rs. 250 Crore or more shall have Secretarial
Report from PCS in Form MR‐3, annexed to Board Report.