July 2023

Powers of Board (1) 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: Provided that in exercising such power or doing such act or thing, the Board shall be subject to the provisions contained in that behalf in this Act, or in the memorandum or articles, or in any regulations not inconsistent therewith and duly made thereunder, including regulations made by the company in general meeting: Provided further that the Board shall not exercise any power or do any act or thing which is directed or required, whether under this Act or by the memorandum or articles of the company or otherwise, to be exercised or done by the company in general meeting. (2) No regulation made by the company in general meeting shall invalidate any prior act of the Board which would have been valid if that regulation had not been made. 2&3[(3) 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: — (a) to make calls on shareholders in respect of money unpaid on their shares; (b) to authorise buy-back of securities under section 68; (c) to issue securities, including debentures, whether in or outside India; 1[(d) to borrow monies; (e) to invest the funds of the company; (f) to grant loans or give guarantee or provide security in respect of loans;] (g) to approve financial statement and the Board’s report; (h) to diversify the business of the company; (i) to approve amalgamation, merger or reconstruction; (j) to take over a company or acquire a controlling or substantial stake in another company; (k) any other matter which may be prescribed: Provided that 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, the powers specified in clauses (d) to (f) on such conditions as it may specify: Provided further that the acceptance by a banking company in the ordinary course of its business of deposits of money from the public repayable on demand or otherwise and withdrawable by cheque, draft, order or otherwise, or the placing of monies on deposit by a banking company with another banking company on such conditions as the Board may prescribe, shall not be deemed to be a borrowing of monies or, as the case may be, a making of loans by a banking company within the meaning of this section.] Explanation I.—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. Explanation II.—In respect of dealings between a company and its bankers, the exercise by the company of the power specified in clause (d) shall mean the arrangement made by the company with its bankers for the borrowing of money by way of overdraft or cash credit or otherwise and not the actual day-to-day operation on overdraft, cash credit or other accounts by means of which the arrangement so made is actually availed of. (4) Nothing in this section shall be deemed to affect the right of the company in general meeting to impose restrictions and conditions on the exercise by the Board of any of the powers specified in this section. Exceptions/ Modification/ Adaptation 1. In case of section 8 company, matters referred to in clauses (d), (e) and (f) of Sub-section (3) of section 179 may be decided by the Board by circulation instead of at a meeting. – Notification dated 5th june, 2015. 2. In case of Specified IFSC Public Company – In sub-section (3) of Section 179, after the second proviso, the following proviso shall be inserted, namely:- “Provided also that in case of a Specified IFSC public company, the Board can exercise powers by means of resolutions passed at the meetings of the Board or through resolutions passed by circulation.”. Notification Dated 4th January 2017. 3. In case of Specified IFSC Priavte Company – In sub-section (3) of Section 179, after the second proviso, the following proviso shall be inserted, namely:- “Provided also that in case of a Specified IFSC priavte company, the Board can exercise powers by means of resolutions passed at the meetings of the Board or through resolutions passed by circulation.”. Notification Dated 4th January 2017 Practice area’s of B K Goyal & Co LLP Income Tax Return Filing | Income Tax Appeal | Income Tax Notice | GST Registration | GST Return Filing | FSSAI Registration | Company Registration | Company Audit | Company Annual Compliance | Income Tax Audit | Nidhi Company Registration| LLP Registration | Accounting in India | NGO Registration | NGO Audit | ESG | BRSR | Private Security Agency | Udyam Registration | Trademark Registration | Copyright Registration | Patent Registration | Import Export Code | Forensic Accounting and Fraud Detection | Section 8 Company | Foreign Company | 80G and 12A Certificate | FCRA Registration |DGGI Cases | Scrutiny Cases | Income Escapement Cases | Search & Seizure | CIT Appeal | ITAT Appeal | Auditors | Internal Audit | Financial Audit | Process Audit | IEC Code | CA Certification | Income Tax Penalty Notice u/s 271(1)(c) | Income Tax Notice u/s 142(1) | Income Tax Notice u/s 144 |Income Tax Notice u/s 148 | Income Tax Demand Notice  Company Registration Services in major cities of India Company Registration in Jaipur | Company Registration in Delhi | Company Registration in Pune | Company Registration in Hyderabad | Company Registration in Bangalore | Company Registration in Chennai | Company Registration in Kolkata | Company Registration in Mumbai | Company Registration in India | Company Registration in Gurgaon Our Offices CA in Delhi | CA in Jaipur | CA in Gurgaon | CA Firm in India

Nomination and Remuneration Committee and Stakeholders Relationship Committee (1) The Board of Directors of 4[every listed public company] and such other class or classes of companies, as may be prescribed shall constitute the Nomination and Remuneration Committee consisting of three or more non-executive Directors out of which not less than one-half shall be independent directors: Provided that the chairperson of the company (whether executive or non-executive) may be appointed as a member of the Nomination and Remuneration Committee but shall not chair such Committee. 2[(2) The Nomination and Remuneration Committee shall identify persons who are qualified to become Directors and who may be appointed in senior management in accordance with the criteria laid down, recommend to the Board their appointment and removal and 5[shall specify the manner for effective evaluation of performance of Board, its committees and individual Directors to be carried out either by the Board, by the Nomination and Remuneration Committee or by an independent external agency and review its implementation and compliance]. (3) The Nomination and Remuneration Committee shall formulate the criteria for determining qualifications, positive attributes and independence of a director and recommend to the Board a policy, relating to the remuneration for the Directors, key managerial personnel and other employees. (4) The Nomination and Remuneration Committee shall, while formulating the policy under sub-section (3) ensure that— (a) the level and composition of remuneration is reasonable and sufficient to attract, retain and motivate Directors of the quality required to run the company successfully; (b) relationship of remuneration to performance is clear and meets appropriate performance benchmarks; and (c) remuneration to Directors, key managerial personnel and senior management involves a balance between fixed and incentive pay reflecting short and long-term performance objectives appropriate to the working of the company and its goals: 6[Provided that such policy shall be placed on the website of the company, if any, and the salient features of the policy and changes therein, if any, along with the web address of the policy, if any, shall be disclosed in the Board’s report.] (5) The Board of Directors of a company which consists of more than one thousand shareholders, debenture-holders, deposit-holders and any other security holders at any time during a financial year shall constitute a Stakeholders Relationship Committee consisting of a chairperson who shall be a non-executive director and such other members as may be decided by the Board. (6) The Stakeholders Relationship Committee shall consider and resolve the grievances of security holders of the company. (7) The chairperson of each of the committees constituted under this section or, in his absence, any other member of the committee authorised by him in this behalf shall attend the general meetings of the company. (8) In case of any contravention of the provisions of section 177 and this section, the company shall be 8[liable to a penalty of five lakh rupees and every officer of the company who is in default shall be liable to a penalty of one lakh rupees.] Provided that 7[inability to resolve or consider any grievance] by the Stakeholders Relationship Committee in good faith shall not constitute a contravention of this section. Explanation.—The expression “senior management’’ means personnel of the company who are members of its core management team excluding Board of Directors comprising all members of management one level below the executive Directors, including the functional heads.] Exceptions/ Modifications/ Adaptations 1. In case of section 8 company – section 178 shall not apply – Notification dated 5th june, 2015. 2. In case of Government company- Sub-sections (2), (3) and (4) of section 178, shall not apply except with regard to appointment of ‘senior management’ and other employees. – Notification dated 5th june, 2015. 3. In case of Specified IFSC Public Company – section 178 shall not apply. – Notification Dated 4th January, 2017. Amendment 4. Substituted by the Companies (Amendment) Act,2017:- Amendment Effective from 7th May 2018 In section 178 in sub-section (1) :- for the words “every listed company” The following words shall be substituted, namely :- “ every listed public company”. 5. Substituted by the Companies (Amendment) Act,2017 :- Amendment Effective from 7th May 2018 In section 178 in sub-section (2):- for the words “shall carry out evaluation of every director’s performance” The following words shall be substituted, namely :- “every listed public company”. 5. Substituted by the Companies (Amendment) Act,2017 :- Amendment Effective from 7th May 2018 In section 178 in sub-section (2):- for the words “shall carry out evaluation of every director’s performance” The following words shall be substituted, namely :- “shall specify the manner for effective evaluation of performance of Board, its committees and individual Directors to be carried out either by the Board, by the Nomination and Remuneration Committee or by an independent external agency and review its implementation and compliance” 6. Substituted by the Companies (Amendment) Act,2017 :- Amendment Effective from 7th May 2018 In section 178 in sub-section (4), in clause (c) :- for the words “Provided that such policy shall be disclosed in the Board’s report.” The following Clause shall be substituted, namely :- “Provided that such policy shall be placed on the website of the company, if any, and the salient features of the policy and changes therein, if any, along with the web address of the policy, if any, shall be disclosed in the Board’s report.” 7.Substituted by the Companies (Amendment) Act,2017 :- Amendment Effective from 7th May 2018 In section 178 in sub-section (8) :- for the words “non-consideration of resolution of any grievance” The following words shall be substituted, namely :- “inability to resolve or consider any grievance” 8.Substituted by the Companies (Amendment) Act, 2020. Notification dated 28th September, 2020 Amendment Effective from 21st December 2020 in sub-section (8), for the words:- “punishable with fine which shall not be less than one lakh rupees but which may extend to five lakh rupees and every officer of the company who is in default shall be punishable with imprisonment for a term which may extend to one year or with fine which shall not be less than twenty-five thousand rupees but which may extend to one lakh rupees, or with both:” The Following shall be substituted:- “liable to a penalty of five lakh rupees and every officer of the company who is in default shall be liable to a penalty of one lakh rupees” Practice area’s of B K Goyal & Co LLP Income Tax Return Filing | Income Tax Appeal | Income Tax Notice | GST Registration | GST Return Filing | FSSAI Registration | Company Registration | Company Audit | Company Annual Compliance | Income Tax Audit | Nidhi Company Registration| LLP

Audit Committee [ (1) The Board of Directors of 5[every listed public company] and such other class or classes of companies, as may be prescribed, shall constitute an Audit Committee. (2) The Audit Committee shall consist of a minimum of three Directors 2[with independent Directors forming a majority]: Provided that majority of members of Audit Committee including its Chairperson shall be persons with ability to read and understand, the financial statement. (3) Every Audit Committee of a company existing immediately before the commencement of this Act shall, within one year of such commencement, be reconstituted in accordance with sub-section (2). (4) Every Audit Committee shall act in accordance with the terms of reference specified in writing by the Board which shall, inter alia, include,— 3[(i) the recommendation for appointment, remuneration and terms of appointment of auditors of the company;] (ii) review and monitor the auditor’s independence and performance, and effectiveness of audit process; (iii) examination of the financial statement and the auditors’ report thereon; (iv) approval or any subsequent modification of transactions of the company with related parties; 1 [Provided that the Audit Committee may make omnibus approval for related party transactions proposed to be entered into by the company subject to such conditions as may be prescribed;] 6[Provided further that in case of transaction, other than transactions referred to in section 188, and where Audit Committee does not approve the transaction, it shall make its recommendations to the Board: Provided also that in case any transaction involving any amount not exceeding one crore rupees is entered into by a director or officer of the company without obtaining the approval of the Audit Committee and it is not ratified by the Audit Committee within three months from the date of the transaction, such transaction shall be voidable at the option of the Audit Committee and if the transaction is with the related party to any director or is authorised by any other director, the director concerned shall indemnify the company against any loss incurred by it: Provided also that the provisions of this clause shall not apply to a transaction, other than a transaction referred to in section 188, between a holding company and its wholly owned subsidiary company.] (v) scrutiny of inter-corporate loans and investments; (vi) valuation of undertakings or assets of the company, wherever it is necessary; (vii) evaluation of internal financial controls and risk management systems; (viii) monitoring the end use of funds raised through public offers and related matters. (5) The Audit Committee may call for the comments of the auditors about internal control systems, the scope of audit, including the observations of the auditors and review of financial statement before their submission to the Board and may also discuss any related issues with the internal and statutory auditors and the management of the company. (6) The Audit Committee shall have authority to investigate into any matter in relation to the items specified in sub-section (4) or referred to it by the Board and for this purpose shall have power to obtain professional advice from external sources and have full access to information contained in the records of the company. (7) The auditors of a company and the key managerial personnel shall have a right to be heard in the meetings of the Audit Committee when it considers the auditor’s report but shall not have the right to vote. (8) The Board’s report under sub-section (3) of section 134 shall disclose the composition of an Audit Committee and where the Board had not accepted any recommendation of the Audit Committee, the same shall be disclosed in such report along with the reasons therefor. (9) Every listed company or such class or classes of companies, as may be prescribed, shall establish a vigil mechanism for Directors and employees to report genuine concerns in such manner as may be prescribed. (10) The vigil mechanism under sub-section (9) shall provide for adequate safeguards against victimisation of persons who use such mechanism and make provision for direct access to the chairperson of the Audit Committee in appropriate or exceptional cases: Provided that the details of establishment of such mechanism shall be disclosed by the company on its website, if any, and in the Board’s report.] Amendment 1.Inserted by Companies (Amendment) Act, 2015 and is effective from 14th December, 2015. 5. Substituted by the Companies (Amendment) Act,2017 :- Amendment Effective from 7th May 2018 In section 177 in sub-section (1):- for the words “every listed company”. the following Clause shall be substituted, namely :- “every listed public company”. 6.Inserted by The Companies (Amendment)Act,2017.:- Amendment Effective from 7th May 2018 Exceptions/ Modifications/ Adaptations 2. Note: In case of section 8 company, in Section-section 2 of section 177 the words “with independent Directors forming a majority” shall be omitted. – Notification dated 5th june, 2015. 3. In case of Government Company – in clause (i) of Sub-section (4) of section 177 for the words “recommendation for appointment, remuneration and terms of appointment’” the words “recommendation for remuneration” shall be substituted. – Notification dated 5th june, 2015. 4. In case of Specified IFSC Public Company – section 177 shall not apply. – Notification Dated 4th January, 2017. Analysys of Section 177 of Companies 2013 Every listed public company and certain other types of companies must have an Audit Committee, which is formed by the Board of Directors. The Audit Committee should consist of at least three Directors, with a majority of them being independent Directors. The majority of members, including the Chairperson, should be able to read and understand financial statements. Existing Audit Committees of companies must be reconstituted according to the requirements within one year of the start of this law. The Audit Committee must follow the terms of reference set by the Board. These include: Recommending the appointment, remuneration, and terms of auditors. Reviewing the auditor’s independence, performance, and effectiveness of the audit process. Examining the financial statements and auditors’ reports. Approving or modifying transactions between the company and related parties. Scrutinizing inter-corporate loans and investments. Evaluating internal financial controls and risk management systems. Monitoring the use of funds raised through public offers and related matters. The Audit Committee can request comments from auditors regarding internal control systems, the scope of audits, and financial statements before they are submitted to the Board. They can also discuss related issues with internal and statutory auditors and the company’s management. The Audit Committee has the authority to investigate any matter related to its responsibilities and can seek professional advice and

Defects in Appointment of Directors not to Invalidate Actions Taken No act done by a person as a director shall be deemed to be invalid, notwithstanding that it was subsequently noticed that his appointment was invalid by reason of any defect or disqualification or had terminated by virtue of any provision contained in this Act or in the articles of the company: Provided that nothing in this section shall be deemed to give validity to any act done by the director after his appointment has been noticed by the company to be invalid or to have terminated. Practice area’s of B K Goyal & Co LLP Income Tax Return Filing | Income Tax Appeal | Income Tax Notice | GST Registration | GST Return Filing | FSSAI Registration | Company Registration | Company Audit | Company Annual Compliance | Income Tax Audit | Nidhi Company Registration| LLP Registration | Accounting in India | NGO Registration | NGO Audit | ESG | BRSR | Private Security Agency | Udyam Registration | Trademark Registration | Copyright Registration | Patent Registration | Import Export Code | Forensic Accounting and Fraud Detection | Section 8 Company | Foreign Company | 80G and 12A Certificate | FCRA Registration |DGGI Cases | Scrutiny Cases | Income Escapement Cases | Search & Seizure | CIT Appeal | ITAT Appeal | Auditors | Internal Audit | Financial Audit | Process Audit | IEC Code | CA Certification | Income Tax Penalty Notice u/s 271(1)(c) | Income Tax Notice u/s 142(1) | Income Tax Notice u/s 144 |Income Tax Notice u/s 148 | Income Tax Demand Notice  Company Registration Services in major cities of India Company Registration in Jaipur | Company Registration in Delhi | Company Registration in Pune | Company Registration in Hyderabad | Company Registration in Bangalore | Company Registration in Chennai | Company Registration in Kolkata | Company Registration in Mumbai | Company Registration in India | Company Registration in Gurgaon Our Offices CA in Delhi | CA in Jaipur | CA in Gurgaon | CA Firm in India

Passing of Resolution by Circulation (1) No resolution shall be deemed to have been duly passed by the Board or by a committee thereof by circulation, unless the resolution has been circulated in draft, together with the necessary papers, if any, to all the Directors, or members of the committee, as the case may be, at their addresses registered with the company in India by hand delivery or by post or by courier, or through such electronic means as may be prescribed and has been approved by a majority of the Directors or members, who are entitled to vote on the resolution: Provided that, where not less than one-third of the total number of Directors of the company for the time being require that any resolution under circulation must be decided at a meeting, the chairperson shall put the resolution to be decided at a meeting of the Board. (2) A resolution under sub-section (1) shall be noted at a subsequent meeting of the Board or the committee thereof, as the case may be, and made part of the minutes of such meeting. Practice area’s of B K Goyal & Co LLP Income Tax Return Filing | Income Tax Appeal | Income Tax Notice | GST Registration | GST Return Filing | FSSAI Registration | Company Registration | Company Audit | Company Annual Compliance | Income Tax Audit | Nidhi Company Registration| LLP Registration | Accounting in India | NGO Registration | NGO Audit | ESG | BRSR | Private Security Agency | Udyam Registration | Trademark Registration | Copyright Registration | Patent Registration | Import Export Code | Forensic Accounting and Fraud Detection | Section 8 Company | Foreign Company | 80G and 12A Certificate | FCRA Registration |DGGI Cases | Scrutiny Cases | Income Escapement Cases | Search & Seizure | CIT Appeal | ITAT Appeal | Auditors | Internal Audit | Financial Audit | Process Audit | IEC Code | CA Certification | Income Tax Penalty Notice u/s 271(1)(c) | Income Tax Notice u/s 142(1) | Income Tax Notice u/s 144 |Income Tax Notice u/s 148 | Income Tax Demand Notice  Company Registration Services in major cities of India Company Registration in Jaipur | Company Registration in Delhi | Company Registration in Pune | Company Registration in Hyderabad | Company Registration in Bangalore | Company Registration in Chennai | Company Registration in Kolkata | Company Registration in Mumbai | Company Registration in India | Company Registration in Gurgaon Our Offices CA in Delhi | CA in Jaipur | CA in Gurgaon | CA Firm in India

Quorum for Meetings of Board (1) The quorum for a meeting of the Board of Directors of a company shall be 1[one third of its total strength or two Directors, whichever is higher], and the participation of the Directors by video conferencing or by other audio visual means shall also be counted for the purposes of quorum under this sub-section.] (2) The continuing Directors may act notwithstanding any vacancy in the Board; but, if and so long as their number is reduced below the quorum fixed by the Act for a meeting of the Board, the continuing Directors or director may act for the purpose of increasing the number of Directors to that fixed for the quorum, or of summoning a general meeting of the company and for no other purpose. 2,3&4[(3) Where at any time the number of interested Directors exceeds or is equal to two thirds of the total strength of the Board of Directors, the number of Directors who are not interested Directors and present at the meeting, being not less than two, shall be the quorum during such time. Explanation.—For the purposes of this sub-section, “interested director” means a director within the meaning of sub-section (2) of section 184.] (4) Where a meeting of the Board could not be held for want of quorum, then, unless the articles of the company otherwise provide, the meeting shall automatically stand adjourned to the same day at the same time and place in the next week or if that day is a national holiday, till the next succeeding day, which is not a national holiday, at the same time and place. Explanation.—For the purposes of this section,— (i) any fraction of a number shall be rounded off as one; (ii) “total strength” shall not include Directors whose places are vacant. Exceptions/ Modifications/ Adaptations 1. In case of section 8 company, in Sub-section (1) of section 174, for the words “onethird of its total strength or two Directors, whichever is higher”, the words “either eight members or twenty five per cent, of its total strength whichever is less” shall be substituted. The following proviso shall be inserted namely in case of section 8 company – “provided that the quorum shall not be less than two members”. –Notification dated 5th june, 2015. 2. In case of Specified IFSC Public Company – Sub-section (3) of section 174 shall apply with the exception that interested director may participate in such meeting provided the disclosure of his interest is made by the concerned director either prior or at the meeting. – Notification Date 4th January, 2017. 3. In case of Specified IFSC Private Company – Sub-section (3) of section 174 shall apply with the exception that interested director may participate in such meeting provided the disclosure of his interest is made by the concerned director either prior or at the meeting. – Notification Date 4th January, 2017. 4. In case of Private Company – Sub-Section (3) of section 174 shall apply with the exception that the interested director may also be counted towards quoram in such meeting after disclosure of his interest pursuant to section 184.” – Notification Dated 13th June, 2017. Practice area’s of B K Goyal & Co LLP Income Tax Return Filing | Income Tax Appeal | Income Tax Notice | GST Registration | GST Return Filing | FSSAI Registration | Company Registration | Company Audit | Company Annual Compliance | Income Tax Audit | Nidhi Company Registration| LLP Registration | Accounting in India | NGO Registration | NGO Audit | ESG | BRSR | Private Security Agency | Udyam Registration | Trademark Registration | Copyright Registration | Patent Registration | Import Export Code | Forensic Accounting and Fraud Detection | Section 8 Company | Foreign Company | 80G and 12A Certificate | FCRA Registration |DGGI Cases | Scrutiny Cases | Income Escapement Cases | Search & Seizure | CIT Appeal | ITAT Appeal | Auditors | Internal Audit | Financial Audit | Process Audit | IEC Code | CA Certification | Income Tax Penalty Notice u/s 271(1)(c) | Income Tax Notice u/s 142(1) | Income Tax Notice u/s 144 |Income Tax Notice u/s 148 | Income Tax Demand Notice  Company Registration Services in major cities of India Company Registration in Jaipur | Company Registration in Delhi | Company Registration in Pune | Company Registration in Hyderabad | Company Registration in Bangalore | Company Registration in Chennai | Company Registration in Kolkata | Company Registration in Mumbai | Company Registration in India | Company Registration in Gurgaon Our Offices CA in Delhi | CA in Jaipur | CA in Gurgaon | CA Firm in India

Meetings of Board (1) Every company shall hold the first meeting of the Board of Directors within thirty days of the date of its incorporation and thereafter hold a minimum number of four meetings of its Board of Directors every year in such a manner that not more than one hundred and twenty days shall intervene between two consecutive meetings of the Board: Provided that the Central Government may, by notification, direct that the provisions of this sub-section shall not apply in relation to any class or description of companies or shall apply subject to such exceptions, modifications or conditions as may be specified in the notification.] (2) The participation of Directors in a meeting of the Board may be either in person or through video conferencing or other audio visual means, as may be prescribed, which are capable of recording and recognising the participation of the Directors and of recording and storing the proceedings of such meetings along with date and time: Provided that the Central Government may, by notification, specify such matters which shall not be dealt with in a meeting through video conferencing or other audio visual means. 5[Provided further that where there is quorum in a meeting through physical presence of Directors, any other director may participate through video conferencing or other audio visual means in such meeting on any matter specified under the first proviso.] (3) A meeting of the Board shall be called by giving not less than seven days’ notice in writing to every director at his address registered with the company and such notice shall be sent by hand delivery or by post or by electronic means: Provided that a meeting of the Board may be called at shorter notice to transact urgent business subject to the condition that at least one independent director, if any, shall be present at the meeting: Provided further that in case of absence of independent Directors from such a meeting of the Board, decisions taken at such a meeting shall be circulated to all the Directors and shall be final only on ratification thereof by at least one independent director, if any. (4) Every officer of the company whose duty is to give notice under this section and who fails to do so shall be liable to a penalty of twenty-five thousand rupees. 4[(5) A One Person Company, small company and dormant company shall be deemed to have complied with the provisions of this section if at least one meeting of the Board of Directors has been conducted in each half of a calendar year and the gap between the two meetings is not less than ninety days: Provided that nothing contained in this sub-section and in section 174 shall apply to One Person Company in which there is only one director on its Board of Directors.] Exceptions/ Modifications/ Adaptations 1. In case of section 8 company – section 173 (1) shall apply only to the extent that the Board of Directors, of such Companies shall hold at least one meeting within every six calendar months. – Notification dated 5th june, 2015. 2. In case of Specified IFSC Public Company – In sub-section (1) of section 173, after the proviso, the following proviso shall be inserted, namely:- “Provided further that a Specified IFSC public company shall hold the first meeting of the Board of Directors within sixty days of its incorporation and thereafter hold atleast one meeting of the Board of Directors in each half of a calendar year.”. Notification Dated 4th January 2017. 3. In case of Specified IFSC Private Company – In sub-section (1) of section 173 after the proviso, the following proviso shall be inserted, namely:- “Provided further that a Specified IFSC private company shall hold the first meeting of the Board of Directors within sixty days of its incorporation and thereafter hold atleast one meeting of the Board of Directors in each half of a calendar year.”. Notification Dated 4th January 2017. 4. In case of Private Company – For Sub-section(5) of section 173 the following sub-section shall be substituted, namely:- (5) A One Person Company, small company, dormant company and a private company (if such private company is a start-up) shall be deemed to have complied with the provisions of this section if at least one meeting of the Board of Directors has been conducted in each half of a calendar year and the gap between the two meetings is not less than ninety days: – Notification Dated 13th June, 2017 Note : 1.Special Measures under Companies Act, 2013 (CA-2013) and Limited Liability Partnership Act, 2008 in view of COVID-19 outbreak. Amendment 5. Inserted by The Companies (Amendment)Act,2017 :- Amendment Effective from 7th May 2018 Practice area’s of B K Goyal & Co LLP Income Tax Return Filing | Income Tax Appeal | Income Tax Notice | GST Registration | GST Return Filing | FSSAI Registration | Company Registration | Company Audit | Company Annual Compliance | Income Tax Audit | Nidhi Company Registration| LLP Registration | Accounting in India | NGO Registration | NGO Audit | ESG | BRSR | Private Security Agency | Udyam Registration | Trademark Registration | Copyright Registration | Patent Registration | Import Export Code | Forensic Accounting and Fraud Detection | Section 8 Company | Foreign Company | 80G and 12A Certificate | FCRA Registration |DGGI Cases | Scrutiny Cases | Income Escapement Cases | Search & Seizure | CIT Appeal | ITAT Appeal | Auditors | Internal Audit | Financial Audit | Process Audit | IEC Code | CA Certification | Income Tax Penalty Notice u/s 271(1)(c) | Income Tax Notice u/s 142(1) | Income Tax Notice u/s 144 |Income Tax Notice u/s 148 | Income Tax Demand Notice  Company Registration Services in major cities of India Company Registration in Jaipur | Company Registration in Delhi | Company Registration in Pune | Company Registration in Hyderabad | Company Registration in Bangalore | Company Registration in Chennai | Company Registration in Kolkata | Company Registration in Mumbai | Company Registration in India | Company Registration in Gurgaon Our Offices CA in Delhi | CA in Jaipur | CA in Gurgaon | CA Firm in India

Penalty If a company is in default in complying with any of the provisions of this Chapter and for which no specific penalty or punishment is provided therein, the company and every officer of the company who is in default shall be liable to a penalty of fifty thousand rupees, and in case of continuing failure, with a further penalty of five hundred rupees for each day during which such failure continues, subject to a maximum of three lakh rupees in case of a company and one lakh rupees in case of an officer who is in default.”] Amendment- 1. Substituted by the Companies (Amendment) Act, 2020. Notification dated 28th September, 2020 Amendment Effective from 21st December 2020 For section 172:- Punishment Notified Date of Section:01/04/2014 172. Punishment.— If a company contravenes any of the provisions of this Chapter and for which no specific punishment is provided therein, the company and every officer of the company who is in default shall be punishable with fine which shall not be less than fifty thousand rupees but which may extend to five lakh rupees. The following section shall be substituted, namely:- “Penalty 172. If a company is in default in complying with any of the provisions of this Chapter and for which no specific penalty or punishment is provided therein, the company and every officer of the company who is in default shall be liable to a penalty of fifty thousand rupees, and in case of continuing failure, with a further penalty of five hundred rupees for each day during which such failure continues, subject to a maximum of three lakh rupees in case of a company and one lakh rupees in case of an officer who is in default.” Ensuring Compliance in Indian Companies: A Comprehensive Guide to Section 172 of the Companies Act, 2013 Navigating Compliance and Penalties with Clarity The Companies Act, 2013, as amended in 2020, upholds corporate accountability through Section 172. This section outlines penalties for companies and their officers who fail to comply with certain provisions of the Act, even if those provisions don’t specify explicit penalties. Understanding these provisions is crucial for companies operating in India to maintain compliance and avoid financial repercussions. Key Provisions of Section 172: Understanding “Default”: A company is considered in “default” when it fails to adhere to a provision of the Act for which no specific penalty is mentioned elsewhere in the Act. Both the company and its officers in default face penalties for such non-compliance. Penalties Imposed: Initial Penalty: A flat penalty of ₹50,000 is levied on the company and its defaulting officers. Continuing Failure: If non-compliance persists, an additional penalty of ₹500 per day is imposed, subject to a maximum of ₹3 lakhs for the company and ₹1 lakh for each officer in default. Illustrative Examples: Example 1: A company fails to hold its annual general meeting within the prescribed timeframe, violating Section 96 of the Act. While Section 96 doesn’t specify a penalty, Section 172 applies, subjecting the company and its defaulting officers to the aforementioned penalties. Example 2: A company’s directors fail to disclose their interests in accordance with Section 184. Section 172’s penalties would apply here as well, as Section 184 doesn’t outline specific penalties. Key Considerations: Amendment in 2020: The 2020 amendment replaced the term “punishment” with “penalty” and introduced the concept of continuing failure with daily penalties. Wide Scope: Section 172 encompasses a broad range of corporate compliance obligations. Due Diligence: Companies must exercise vigilance to ensure adherence to all applicable provisions of the Act. Importance of Compliance: Financial Implications: Non-compliance can lead to significant financial penalties, potentially impacting a company’s financial health. Reputational Damage: Regulatory violations can tarnish a company’s reputation and erode stakeholder trust. Legal Consequences: In severe cases, non-compliance may escalate to legal proceedings and further sanctions. Disclaimer: This information is intended to provide general guidance and should not be considered as a substitute for professional legal advice. Please consult a qualified legal professional for specific guidance relevant to your company’s circumstances. Practice area’s of B K Goyal & Co LLP Income Tax Return Filing | Income Tax Appeal | Income Tax Notice | GST Registration | GST Return Filing | FSSAI Registration | Company Registration | Company Audit | Company Annual Compliance | Income Tax Audit | Nidhi Company Registration| LLP Registration | Accounting in India | NGO Registration | NGO Audit | ESG | BRSR | Private Security Agency | Udyam Registration | Trademark Registration | Copyright Registration | Patent Registration | Import Export Code | Forensic Accounting and Fraud Detection | Section 8 Company | Foreign Company | 80G and 12A Certificate | FCRA Registration |DGGI Cases | Scrutiny Cases | Income Escapement Cases | Search & Seizure | CIT Appeal | ITAT Appeal | Auditors | Internal Audit | Financial Audit | Process Audit | IEC Code | CA Certification | Income Tax Penalty Notice u/s 271(1)(c) | Income Tax Notice u/s 142(1) | Income Tax Notice u/s 144 |Income Tax Notice u/s 148 | Income Tax Demand Notice  Company Registration Services in major cities of India Company Registration in Jaipur | Company Registration in Delhi | Company Registration in Pune | Company Registration in Hyderabad | Company Registration in Bangalore | Company Registration in Chennai | Company Registration in Kolkata | Company Registration in Mumbai | Company Registration in India | Company Registration in Gurgaon Our Offices CA in Delhi | CA in Jaipur | CA in Gurgaon | CA Firm in India

Members’ right to inspect. (1) The register kept under sub-section (1) of section 170,— (a) shall be open for inspection during business hours and the members shall have a right to take extracts therefrom and copies thereof, on a request by the members, be provided to them free of cost within thirty days; and (b) shall also be kept open for inspection at every annual general meeting of the company and shall be made accessible to any person attending the meeting. (2) If any inspection as provided in clause (a) of sub-section (1) is refused, or if any copy required under that clause is not sent within thirty days from the date of receipt of such request, the Registrar shall on an application made to him order immediate inspection and supply of copies required thereunder.] Exceptions/ Modification/ Adaptation 1. In case of Government Company – section 171 shall not apply to Government Company in which the entire share capital is held by the Central Government, or by any State Government or Governments or by the Central Government or by one or more State Governments. – Notification dated 5th june, 2015. Practice area’s of B K Goyal & Co LLP Income Tax Return Filing | Income Tax Appeal | Income Tax Notice | GST Registration | GST Return Filing | FSSAI Registration | Company Registration | Company Audit | Company Annual Compliance | Income Tax Audit | Nidhi Company Registration| LLP Registration | Accounting in India | NGO Registration | NGO Audit | ESG | BRSR | Private Security Agency | Udyam Registration | Trademark Registration | Copyright Registration | Patent Registration | Import Export Code | Forensic Accounting and Fraud Detection | Section 8 Company | Foreign Company | 80G and 12A Certificate | FCRA Registration |DGGI Cases | Scrutiny Cases | Income Escapement Cases | Search & Seizure | CIT Appeal | ITAT Appeal | Auditors | Internal Audit | Financial Audit | Process Audit | IEC Code | CA Certification | Income Tax Penalty Notice u/s 271(1)(c) | Income Tax Notice u/s 142(1) | Income Tax Notice u/s 144 |Income Tax Notice u/s 148 | Income Tax Demand Notice  Company Registration Services in major cities of India Company Registration in Jaipur | Company Registration in Delhi | Company Registration in Pune | Company Registration in Hyderabad | Company Registration in Bangalore | Company Registration in Chennai | Company Registration in Kolkata | Company Registration in Mumbai | Company Registration in India | Company Registration in Gurgaon Our Offices CA in Delhi | CA in Jaipur | CA in Gurgaon | CA Firm in India

Register of Directors and key Managerial Personnel and their Shareholding (1) Every company shall keep at its registered office a register containing such particulars of its Directors and key managerial personnel as may be prescribed, which shall include the details of securities held by each of them in the company or its holding, subsidiary, subsidiary of company’s holding company or associate companies. [(2) A return containing such particulars and documents as may be prescribed, of the Directors and the key managerial personnel shall be filed with the Registrar within 2&3[thirty days] from the appointment of every director and key managerial personnel, as the case may be, and within thirty days of any change taking place.] Exceptions/ Modifications/ Adaptations 1. In case of Government Company – section 170 shall not apply to Government Company in which the entire share capital is held by the Central Government, or by any State Government or Governments or by the Central Government or by one or more State Governments. – Notification dated 5th june, 2015. 2. In case of Specified IFSC Public Company– In Sub-section (2) of section 170 For the words “thirty days” at both places read as “sixty days”. – Notification Dated 4th January, 2017. 3. In case of Specified IFSC Priavte Company- In Sub-section (2) of section 170 For the words “thirty days” at both places read as “sixty days”. – Notification Dated 4th January, 2017. Practice area’s of B K Goyal & Co LLP Income Tax Return Filing | Income Tax Appeal | Income Tax Notice | GST Registration | GST Return Filing | FSSAI Registration | Company Registration | Company Audit | Company Annual Compliance | Income Tax Audit | Nidhi Company Registration| LLP Registration | Accounting in India | NGO Registration | NGO Audit | ESG | BRSR | Private Security Agency | Udyam Registration | Trademark Registration | Copyright Registration | Patent Registration | Import Export Code | Forensic Accounting and Fraud Detection | Section 8 Company | Foreign Company | 80G and 12A Certificate | FCRA Registration |DGGI Cases | Scrutiny Cases | Income Escapement Cases | Search & Seizure | CIT Appeal | ITAT Appeal | Auditors | Internal Audit | Financial Audit | Process Audit | IEC Code | CA Certification | Income Tax Penalty Notice u/s 271(1)(c) | Income Tax Notice u/s 142(1) | Income Tax Notice u/s 144 |Income Tax Notice u/s 148 | Income Tax Demand Notice  Company Registration Services in major cities of India Company Registration in Jaipur | Company Registration in Delhi | Company Registration in Pune | Company Registration in Hyderabad | Company Registration in Bangalore | Company Registration in Chennai | Company Registration in Kolkata | Company Registration in Mumbai | Company Registration in India | Company Registration in Gurgaon Our Offices CA in Delhi | CA in Jaipur | CA in Gurgaon | CA Firm in India