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Matter requiring Special resolution
under the companies act 1956
MATTERS REQUIRING
SANCTION OF SHAREHOLDERS BY SPECIAL RESOLUTION
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Section
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Description of
the matter
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17(1)/(2) & 17(A)
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To alter the provisions of the memorandum, with respect to the
place of registered office of a company from one state to another
(subject to confirmation by Tribunal) or its objects and change of
registered office within a state but to the jurisdiction of another
registrar (subject to confirmation from regional director).
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21
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To change the name of the company, subject to approval of the
Central Government.
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25(3)
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To omit the word ‘Limited’ or the words ‘Private Limited’.
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31(1)
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To alter the articles of association of a company.
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77A
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To buyback own shares except where it is of less than 10% of its
paid-up capital and free reserves and is authorised by a Board
resolution.
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79A
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Issue of sweat equity shares.
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81(1A)
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To offer further shares to any person (whether or not those
persons include members).
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81(3)(b)
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To approve the term providing for an option to convert the
debentures or loans containing such term, into shares of the co., other than
those issued to, or obtained from the Government or any specified
institution, so as to exempt the increase in the capital of the company,
by the exercise of such option, from the operation of the section.
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99
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To determine that any portion of the share capital shall not be
called up except in the event of winding up.
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100
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To reduce the share capital, subject to confirmation by
Tribunal.
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106
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Alteration of rights of holders of special classes of shares.
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146(2)
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To remove the registered office of a company outside the local
limits of the city, town or village in which it is situated.
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149(2A)
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To commence any business specified in ‘other objects’ by public
company.
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163(1)
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To keep registers, indexes, returns, copies of certificates and
documents required to be annexed thereto at any other place within the
city, town or village in which the registered office is situated.
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208(2)
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To pay interest out of capital if not authorised by the
articles, hereafter sanction of Central Government is to be obtained.
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224A
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Appointment of Auditor for companies having not less than 25% of
subscribed capital held by Government. cos., financial institutions,
nationalised banks etc.
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237(a)(i)
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To have the affairs of a company investigated by inspectors
appointed by the Central Government.
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294AA(3)/(8)
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Appointment of sole selling agents by a company whose paid-up
capital is Rs. 50 lakhs or more.
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309(1)
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To determine the remuneration payable to a director, if the
articles so require in the case of a public company or its subsidiary.
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309(4)
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To authorise remuneration to a director who is neither in the
wholetime employment of the company nor a Managing Director by way of
commission.
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314(1)
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For a director holding an office or place of profit or his
specified associate holding an office or a place of profit carrying
monthly remuneration of Rs. 10,000 or more under the co. or its
subsidiary.
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314(1B)
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For a director’s or manager’s relative, private companies etc.
specified in the section to hold office or place of profit under the
company at a monthly remuneration of Rs. 20,000 or more.
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323(1)
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To alter the memorandum of a limited company so as to render
unlimited the liability of its director, or manager, if so authorised by
the articles.
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372A
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To give loans or guarantees to other companies or make
investment in shares of other companies (w.e.f. 31-10-1998).
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433(a)
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To get the company wound up by the Tribunal.
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484(1)(b)
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To have the company wound up voluntarily.
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494(1)
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To authorise liquidator to accept shares etc. as consideration
for sale of company’s property.
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512(1)(a)
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For the exercise by the liquidator in a member’s winding up of
powers specified in clauses (a) to (d) of sub-section (1) of S. 457.
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517(1)
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For the arrangement between the co. and its creditors so as to
bind the company and its members.
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546(1)(b)
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Liquidator to exercise certain powers in
voluntary winding up.
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550(1)(b)
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To direct the disposal of books and papers
after completion of winding up and when the company is about to be
dissolved.
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579(1)
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A company registered in pursuance of Part IX
of the Companies Act to alter the form of its constitution by
substituting memorandum and articles for a deed of settlement.
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581-H
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Amendment of Memorandum of Producer company.
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581-I
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Amendment of Articles of Producer company.
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581-J(2)
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Option of Multi-state Co-operative Society to
become Producer Company.
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581-ZH
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Donations or subscription of producer
company.
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581-ZL(3)
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Investment in other company, formation of
subsidiaries, etc. by Producer company.
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581-ZL(4)
Proviso
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Investment in other company, formation of
subsidiaries, etc. by Producer Company.
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581–ZL(6)
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Disposal of investment in other companies by
Producer Company.
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Schedule
XIII
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Appointment of a person as a Managing / Whole-time Director
/Manager if such person is below 25 years but attained majority or is
above 70 years in age.
For paying remuneration in relation to companies having no
profits as referred to in Part 2 of Sch.
XIII, Section II, para (B), clause (iii) of proviso.
For paying remuneration in relation to companies having no
profits as referred to in Part 2 of Sch.
XIII, Section II, para (C), clause (iii) of proviso.
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Approaching IFRS (the International
Financial Reporting Standards) through a converged set of accounting
standards, as announced by India,
is a highly inconsistent but alternative line of thinking, observes T. P.
Ghosh, Professor in the Institute of
Management Technology, Dubai International Academic
City, UAE
(www.imtdubai.ac.ae).
For starters, it may help to know
why there is a growing interest among all capital market participants
including the SEC in the US
for accepting a single set of robust accounting standards. Many multinational
companies and national regulators and users support global standards because
they believe that the use of common standards in the preparation of public
company financial statements will make it easier to compare the financial
results of reporting entities from different countries, explains Ghosh, in
the course of a recent interaction with Business Line over the phone and
email.
“They believe it will help
investors to understand opportunities better. Large public companies with
subsidiaries in multiple jurisdictions would be able to use one accounting
language company-wide and present their financial statements in the same
language as their competitors. Interestingly, 90 per cent of the respondents
to an IFAC survey in 2007 said IFRS adoption is very important or important
for economic growth (www.ifac.org).”
What worries Ghosh is that many
countries that claim to be converging to international standards may never
get to full compliance. “Most reserve the right to carve out selectively or
modify standards they do not consider in their national interest, an action
that could lead to incomparability — the very issue that IFRS seek to
address.”
Excerpts from
the interview.
Globally, is
the IFRS debate getting caught up in rhetoric? Is there disharmony in the
understanding of the terms associated with international financial reporting?
Possibly, the fair value
measurement of assets and liabilities is not appropriately perceived. In
particular, there is confusion about the methodology to be adopted for fair
value measurement of non-traded financial assets at initial recognition; and
subsequent measurement is not properly understood.
Nevertheless IFRS get adequate
acceptance. Of course, in many jurisdictions the critical issue is the
diminishing role of the national standard-setters in the post-IFRS adoption
era. In the case of convergence, the national standard-setters can retain
their roles and responsibilities.
Of course, there are certain serious
conflicts such as the regulatory minimum depreciation versus accounting
depreciation, or prudential provisioning versus accrued loss approach for
provisioning. There is the fear of under-depreciation or under-provisioning.
International standard-setters have
the concern of over-conservatism. National regulators could avoid this debate
by creating regulatory reserve. Dividend distribution policy can easily be
regulated taking care of the desired level of retention.
To add to our woes, there is also
confusion about the term convergence. Malaysia
wishes to converge to IFRS by 2012 but “convergence with IFRS means full
compliance with IFRS as a basis for financial reporting system in Malaysia.” On
January 28, 2010, the Brazilian Federal Council of Accounting and the
Brazilian Accounting Pronouncements Committee signed a memorandum of
understanding (MoU) with the IASB that sets end-2010 as the target date for
full convergence with IFRS and establishes a framework for future
co-operation between the organisations.
The Korean Accounting Standards
Board (KASB) has adopted IFRS as Korean IFRS (K-IFRS) which are completely
identical to IFRS except for the timing differences for newly-published IFRS.
K-IFRS are proposed to be kept up-to-date as IFRS change.
K-IFRS will be required for all
listed companies in Korea
from 2011. Unlisted companies may elect to use K-IFRS. All listed companies
other than financial institutions can apply K-IFRS as early as 2009 on a
voluntary basis. This alternative is somewhat as in India except
that Indian Accounting Standards Board has been engaged in a lengthy process
of reissuing exposure drafts on a globally exposed set of accounting
standards for Indian convergence.
What is your
view on India’s
approach towards IFRS?
India is
pursuing a convergence approach. Convergence implies allowable differences in
presentation, measurement, recognition and disclosures. Of course, it is not
yet clear whether there will be full compliance or not.
But the recent press release of the
Ministry of Corporate Affairs signals divergence. It seems India will
not apply IFRS 1, ‘First-time Adoption of International Financial Reporting
Standards,’ in the convergence process. There is already announcement of
exemption from providing comparatives in the IFRS convergence, which is
contrary to the requirement of IFRS 1.
Also, there is an announcement
regarding the issuance of the revised Schedule VI. The IAS 16, ‘Property,
Plant and Equipment,’ on the contrary, requires depreciation charge based on
estimated useful life, residual value and major components of an asset.
Unlike Malaysia
and Canada, India has not
yet signalled full convergence.
How has been
the record in the implementation and adoption of national accounting
standards in India?
Do you expect that many of these issues will be ironed out in the post-IFRS
era?
There are three issues –
conflicting regulatory framework, divergent view of the national
standard-setter on many accounting issues, and procedural delays.
Time lag in adopting a new
accounting approach is very high in India although all Indian
accounting standards are based on the IAS /IFRS. Improvement in the
presentation of financial statements has been delayed because of regulatory
framework. There is resistance to de-regulate the format of the financial
statements.
AS 16 to AS 29 were issued after an
average time lag of 5 years. The time lag was due to ideological resistance.
There has been very low acceptability of segment reporting, consolidation,
and deferred taxation.
India
does not have national standards on investment property, agriculture,
share-based payment, non-current assets held for sale, etc.
Existing standards are not updated.
Here, procedural delays may be major reasons rather than serious ideological
differences. For instance, there could be no reason for revising conditions
for revenue recognition or accepting the concept of operating segment. There
could be no ideological difference in accepting balance sheet liability
method of deferred taxation.
AS 30 to AS 32 are issued but not implemented,
which are major divergent areas. Understandably there is implementation
difficulty. But it was the responsibility of national standard-setter to
replace in a timely manner the orthodox investment accounting standard, which
is another extreme of the application of historical costs ignoring the
available fair market value of a financial asset.
As a result, almost all Indian
standards have become divergent over the years.
Given the proposition of converged
set of accounting standards, I don’t think the situation will improve. The
converged set of standards will become divergent in no time given the
adaptation time lag in India.
In what areas
of IFRS transition do you foresee Indian corporates facing difficulties?
Difficult areas are many, of which the
important ones are –
i) Componentisation of property,
plant and equipment and making depreciation charge.
ii) Re-creation of cost records of
property, plant and equipment for IFRS adoption or determining fair value
which will be the deemed costs.
iii) Measurement of amortised cost
of financial liabilities and financial assets having scheduled cash flows.
iv) Creation of tax base of assets
and liabilities.
v) Decomposing compound financial
instruments.
vi) Application of impairment analysis
on loans and receivables in place of standardised provisioning.
Interestingly, any retrospective
application of change in accounting policies and rectification of errors will
cause considerable difficulties in the post-IFRS era. Local accounting software
should be effective enough to capture retrospective application and
retrospective restatement.
Any other
points of interest.
Major issue is global harmonisation
of financial reporting necessitated by the cross-border listing and
fund-raising; this seems to be forgotten in the convergence process.
Uniformity in financial reporting would be feasible through IFRS adoption,
not through convergence with differences. The G-20 leaders also emphasised on
global financial reporting standards.
Second, instead of reproducing a
converged set of standards with differences or full convergence, it could be
appropriate to list the IFRS clauses which India does not wish to accept and
provide additional guidance wherever the national standard-setters think
appropriate. This would help the issuer of financial reports and users to
reconcile the divergences.
Article was earlier published in one of the reputed financial daily
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