January 29, 2024 | CA B K Goyal & Co LLP

Section 34 – The Company Secretaries Act, 1980

The Company Secretaries Act, 1980 / CA Bhuvnesh Goyal / January 29, 2024

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Section 33 – The Company Secretaries Act, 1980

The Company Secretaries Act, 1980 / CA Bhuvnesh Goyal / January 29, 2024

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Section 32 – The Company Secretaries Act, 1980

The Company Secretaries Act, 1980 / CA Bhuvnesh Goyal / January 29, 2024

Transfer of assets and liabilities of the dissolved company to the Institute (1) On the commencement of this Act, there shall be transferred to and vested in the Institute all the assets and liabilities of the dissolved company. (2) The assets of the dissolved company shall be deemed to include all rights and powers, and all property, whether movable or immovable, of that company, including in particular, cash balances, reserve funds, investments, deposits and all other interests and rights in or arising out of such property as may be in the possession of the dissolved company and all books of accounts, papers or documents of the dissolved company; and the liabilities shall be deemed to include all debts, liabilities and obligations of whatever kind then existing of that company. (3) All contracts, debts, bonds, agreements and other instruments of whatever nature to which the dissolved company is a party, subsisting or having effect immediately before the commencement of this Act, shall be of as full force and effect against or in favour of the Institute, as the case may be, and may be enforced as fully and effectively as if instead of the dissolved company, the Institute had been a party thereto. (4) If, on the commencement of this Act, any suit, appeal or other legal proceeding of whatever nature by or against the dissolved company is pending, the same shall not abate, be discontinued or be in any way prejudicially affected by reason of the transfer to the Institute of the assets and liabilities of the dissolved company or of anything contained in this Act, but the suit, appeal or other proceeding may be continued, prosecuted and enforced by or against the Institute, in the same manner and to the same extent as it would or may be continued, prosecuted and enforced by or against the dissolved company if this Act had not been passed. 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 | Psara License | FCRA Online 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 | Company Registration in Noida Complete CA Services CA in Delhi | CA in Gurgaon | CA in Noida | CA in Jaipur | CA Firm in India RERA Services RERA Rajasthan | RERA Haryana | RERA Delhi | UP RERA

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Section 31 – The Company Secretaries Act, 1980

The Company Secretaries Act, 1980 / CA Bhuvnesh Goyal / January 29, 2024

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Section 30 – The Company Secretaries Act, 1980

The Company Secretaries Act, 1980 / CA Bhuvnesh Goyal / January 29, 2024

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Indira Awaas Yojana

Government Schemes / CA Bhuvnesh Goyal / January 29, 2024

Indira Awaas Yojana (IAY) is a sub-scheme of Rural Landless Employment Guarantee Programme (RLEGP) which was launched by the Ministry of Rural Development. The main objective of the Indira Awaas Yojana is to provide a grant for the construction of houses to members of Scheduled Caste (SC)/Scheduled Tribes (ST), freed bonded labours and to non-SC/ST category below the poverty line. Objectives To provide support during the construction of houses in rural areas. To support the construction of houses with adequate provisions, including workplaces within the house. To design the houses based on the requirements of the dweller. To promote the use of technology and material that is affordable, conductive for generating employment, environment-friendly and sustainable. To empower and encourage Panchayats to take a lead role at the village level for the implementation of this housing scheme. Salient Features Joint Ownership- The houses provided under the Indira Awaas Yojana (IAY) will be under the joint ownership of the husband and wife, except in the of the case of an unmarried, widow or divorced individual. Construction- The construction of the houses should be carried out by the beneficiary. The contractors should not be involved in the construction of houses under IAY. If the beneficiary has assigned a contractor, then the State Government will withdraw the funds used on the same. Technical Support- The support in the form of technical and managerial guidance is provided for the construction of the IAY house. Also, the services of reputed NGOs, charitable organisations, youth clubs can be utilised to provide necessary service support to the beneficiaries. Design and Construction Standards- The eco-friendly housing techniques are promoted by the State Government to improvise houses with the facilities such as water supply, internal and approach roads, sewerage, drainage, street lighting and social infrastructure amenities in slums. Target Group The target group covers households that are Below Poverty Line (BPL) as identified by the Gram Sabha of a village. The Central Government will extend its assistance to the households headed by women, SC/ST individuals, non-SC/ST rural households below the poverty line, ex-servicemen, widows, disabled individual, freed bonded labourers and marginalised sections of society. Special Projects by IAY Rehabilitation of rural families below the poverty line. To Provide settlement for liberated manual scavengers and freed bonded labourers. To provide a settlement for vulnerable tribal socities. Rehabilitation of individuals who are affected by occupational diseases. Settlement of families who are covered under the Scheduled Tribes and other Traditional Forest Dwellers Act. Settlement of families who are required to relocate from districts. Demonstration of new technology with a focus on affordable and eco-friendly technologies. Funding and Allocation of Funds The funds released to the beneficiaries would be shared by the State and Central Government, the ratio of price sharing would be in the ratio of 75:25, with the exclusion of projects in the North-East regions and Union Territories. So, the Central Government is responsible for providing 90% fund for the projects in the North-East regions and Union Territories. The funds allocated by the State and Central Government for the beneficiaries except in the north-east regions/UT are tabulated below: S. No Beneficiary Category Fund Allocated 1. SC/ST Category 60% 2. Minority sections of society 15% 3. Individual with disabilities 3% Implementation of the Scheme The Zila Parishad in the district level is responsible for the implementation of the scheme and in case of no Zila Parishad in the State, then the concerned authority equivalent to the same should take over the responsibility. However, at the local level, the Village Panchayats are responsible for the implementation of guidelines set under the Indira Awaas Yojana (IAY). If there is an absence of Village Panchayat in a State, then the concerned authority which is equivalent to the same is responsible. In case the Village Panchayats is not capable of undertaking the task, then the State Government can hand over the intermediate level responsibility to the Panchayat. Empowered Committee The Empowered Committee consists of the ChairPerson will be the secretary of rural development or additional secretary of rural development. Also, it will consist of the members such as joint secretary of rural housing, HUDCO representative, an adviser from the planning commission, knowledge network representative, representatives from NGOs related to the field of construction and the state secretary of rural housing. This committee will make decisions related to the scheme such as new house construction targets, permission for cash payments, reallocation of funds, the sanction of special projects, approval of new technologies for construction and monitoring the scheme. Construction Timelimit he prescribed time limit for the completion of the project are given below: S. No Level of Construction Timelimit 1. First Stage (Initial level of Construction) 9 months from the day of receipt of 1st instalment 2. Second Stage (Completion of the project) 9 months from the day of receipt of 2nd instalment. Release of Fund The annual allocation of the fund will be released in two instalments. The first instalment of 25% of the project cost is provided along with the sanction letter. The second instalment of 60% of the project cost is released upon reaching the level of the lintel, and the final instalment of 15% of the project cost is released to the beneficiary on completion of the project. Procedure for Release of 1st Instalment The first instalment would be released to those who have taken 2nd instalments in the previous year. The Districts who have not received the 2nd instalment of the previous year is required to submit the proposals for 1st instalment along with the documents which are necessary for the release of 2nd instalment of the previous year. Procedure for Release of 2nd Instalment The fund will be released under the following conditions: To the extent of 60% of the fund is utilised during the financial year. Proof for completion of 100% of sanctioned houses within three years from the date of approval is required. In the case of two years, proof for completion of 75% of sanctioned houses has to be obtained. Payment to Beneficiaries The

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Anti dilution clause

Business / CA Bhuvnesh Goyal / January 29, 2024

The anti-dilution clause allows investors to retain their shareholding percentage if new shares are issued. Anti-dilution provisions are clauses that allow investors the right to maintain their ownership percentages in the event that new shares are issued. Dilution refers to a shareholder’s ownership decreasing as a result of new shares being issued. What is an Anti-Dilution Provision? nti-dilution provision measures are introduced to protect investors’ and stakeholders’ interests, most of which have been associated with the company from an early stage. Provisions ensure that when a company issues new shares on the market, investors retain their right to maintain an original shareholding of more than 50%. Rights to protect the interests of preferred shareholders are most closely related to anti-dilution provisions. The issue of new shares by the company may reduce the value of the ownership percentage of existing investors and stakeholders. When more shares are in flow than when the stock option holders or stakeholders holding other optionable securities exercise their options, investors and early-stakeholders risk losing out on the value of their current claim to ownership of the company. There is, therefore, a need for dilution protection, which is geared towards the interests of early investors. Anti-Dilution Provision at Work In particular, for preferred shareholders in venture capital deals whose shareholdings can be reduced if subsequent issues of the same stock are listed at lower prices, dilution is a complicated problem to solve. Anti-dilution provisions could prevent this by modifying the conversion rates between convertible securities, such as company bonds or preferred shares and common stock. An anti-dilution clause can preserve the investor’s original shareholding percentage. Types of Anti-Dilution Provisions Full Ratchet- A full ratchet provision would protect investors who own options or convertible securities. The provision allows the investors to convert at the lowest sale price offered. Therefore, they are protected if the new offering price is lower than the conversion price on the investor’s shares. Weighted Average- The weighted average method uses a formula to determine the new conversion price. New Conversion Price = O x (A + B) / (A + C) Where: O – Old conversion price A – Shares outstanding before new issue B – Consideration received with new issue C – New shares issued When are Anti-Dilution Provision Used? Most companies that issue convertible securities use anti dilution provisions. The provisions are significant in the venture capital area because a number of funding rounds have already taken place. As they allow convertible securities to remain at a higher cost, they are also used to encourage companies to maintain their financial targets. How will the Anti-Dilution Provision Affect your Business? It’s important to note that the anti-dilution provision does not apply to everyone. The parties would not negotiate for the inclusion of an anti-dilution clause in some situations. This means that the guarantee provided by anti-dilution clauses can come at the cost of additional investors. This is a significant issue given that the vulnerable shareholder also serves as the founder or key employee of the company. This is why they may lose motivation to contribute to the company’s success when their shares are diluted too much. Investors with knowledge won’t wish to reduce the entrepreneurs’ drive to grow their businesses. However, when several investors are involved and multiple funding rounds are launched, anti-dilution clauses can significantly impact a company’s business process. FAQs What is an anti-dilution clause? An anti-dilution clause is a provision in a contract, typically found in investment agreements, that protects an investor from dilution of their ownership stake in a company in certain circumstances, such as future rounds of financing. Are there any downsides to anti-dilution clauses? While anti-dilution clauses protect investors, they can be disadvantageous for existing shareholders, including founders and early employees, as they may experience more significant dilution in subsequent financing rounds. Why do investors seek anti-dilution protection? Investors seek anti-dilution protection to preserve the value of their investment in the face of future fundraising rounds at lower valuations. It helps ensure that their ownership percentage remains relatively constant, protecting them from dilution and maintaining their initial investment value. 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 | Psara License | FCRA Online 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 | Company Registration in Noida Complete CA Services CA in Delhi | CA in Gurgaon | CA in Noida | CA in Jaipur | CA Firm in India RERA Services RERA Rajasthan | RERA Haryana | RERA Delhi | UP RERA

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Section 196,197 of Companies Act, 2013

Companies Act 2013 / CA Bhuvnesh Goyal / January 29, 2024

Sections 196 and 197 of the Companies Act 2013 and the rules made thereunder read together with Schedule V provide for the appointment and remuneration of a managing director, whole-time director, or manager. Appointment of a managing director, whole-time director, or manager The company must have either a managing director or a manager at the same time. The manager and executive cannot be appointed at the same time in the company. The longest single term of office of a CEO, full-time director, or manager maybe 5 years. The company cannot appoint executives for a period longer than 5 years. Re-appointment may be made in the last year of the term of office and not earlier. However, a person may be re-appointed after the expiry of the term and this shall be deemed to be his new appointment and not a re-appointment. The appointment of the Chief Executive Officer, Whole Time Director, or Manager shall be made by the Board of Directors in its meeting subject to approval by resolution at the nearest general meeting and by the Central Government in case of deviations in terms of appointment and remuneration with the prescribed rules. The notice convening such a meeting of the board of directors or the general meeting must contain all the conditions of this appointment and the remuneration payable. The company shall file back the appointment in MR-1 within 60 days of the appointment. Qualification of Managing Director, Whole Time Director, or Manager Minimum eligible age for the appointment is 21 years and the maximum eligible age is less than 70 years. However, a person at the age of 70 can be appointed by a special resolution. In case a proper resolution is passed, the application must be forwarded to the central government for approval. The person should not have been declared insolvent or insolvent. The person has never suspended or defaulted on payments to his creditors. The person has never been convicted of a criminal offense by a court for more than 6 months. Disqualification for appointment as managerial personnel under section 196 of the Companies Act, 2013 No person who has attained the age of 70 years can be appointed as managerial staff unless a special resolution is given along with an explanatory statement when approved by the members with proper justification for such appointment. Further, if no special resolution is passed but the votes cast in favor of the said proposal exceed the votes, the Council may in such a case make an application to the Central Government with reasons showing the merits of the said appointment. Company. A person who has attained the age of 70 years may be appointed if the Central Government thinks that such appointment is necessary and beneficial to society. is an undischarged insolvent or has at any time been declared a bankrupt; has at any time suspended or agreed with his creditors; or has at any time been convicted by a court of an offense and sentenced to a term exceeding six months. Procedure for appointing a CEO, whole-time director, or manager Send all directors a seven-day notice of a board meeting together with an agenda stating the subject of the meeting, i.e. the terms of appointment of the CEO, full-time director, or manager, and remuneration payable. Manage the meetings of the board of directors and resolve the appointment and remuneration of executives with the consent of the members at the next general meeting. In the case of private companies, the approval of the members is not required for the appointment. Submit DIR-12 within 30 days of appointment according to section 170 Submit MGT-14 within 30 days of appointment according to section 117 Submit the MR-1 within 60 days of the appointment according to section 196 In the case of private companies, filling in this form is not required. Obtain the approval of the shareholders by adopting a proper resolution at the next annual general meeting. It should be noted that in the case of private companies, there is no need to take the consent of the members at the general meeting. It should be noted that according to Section 196 if the appointment of executives is not approved by the members of the general meeting, this does not invalidate any action taken by these executives due to the performance of their duties. FAQs What is the significance of Section 197 in the Companies Act, 2013? Section 197 deals with the overall maximum managerial remuneration and the limits on the remuneration payable to directors, including managing directors, whole-time directors, and managers. How is the remuneration of directors determined under Section 197? The remuneration is determined based on factors such as the company’s financial performance, profits, and other prescribed criteria. The remuneration must comply with the limits specified in the section. Are there any exemptions or relaxations provided under Section 197? The section may provide for certain exemptions or relaxations for specific types of companies or circumstances. It’s essential to refer to the specific provisions of the section and any amendments that may have been made. 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