Companies Act 2013

Overall maximum managerial remuneration and managerial remuneration in case of absence or inadequacy of profits. Limits on Managerial Remuneration in Public Companies   Position Limit on Remuneration Directors (including MD and WTD) Not more than 11% of net profits of the company Manager Not more than 11% of net profits of the company Directors (MD, WTD, and Manager) Not more than 5% of net profits individually Directors (Non-MD, Non-WTD) Not more than 1% of net profits if MD or WTD exists; Not more than 3% of net profits otherwise Approval Requirements   General Meeting Approval (For Remuneration exceeding 11% of net profits) Special Resolution Approval (For remuneration exceeding specified limits) Exceptions/Modifications/Adaptations   Company Type Exception/Modification/Adaptation Nidhi Company Remuneration for special services subject to limits Government Company Section 197 does not apply Specified IFSC Public Company Section 197 does not apply Penalties and Fines Violation Penalty/Fine Contravention of provisions Fine ranging from INR 1 lakh to INR 5 lakhs Default in complying with section Penalty of INR 1 lakh for individuals   Penalty of INR 5 lakhs for companies   Auditor’s Report The auditor of the company will include the following details in their report: Whether the remuneration paid to directors complies with the provisions. Whether any director’s remuneration exceeds the prescribed limit. Any other details as prescribed.   Disclosures in Board’s Report (for listed companies) he Board’s report of a listed company will include the following information: Ratio of remuneration of each director to the median employee’s remuneration. Other prescribed details. y will include the following details in their report: Whether the remuneration paid to directors complies with the provisions. Whether any director’s remuneration exceeds the prescribed limit. Any other details as prescribed. Section 197 2&3[ 1[(1) The total managerial remuneration payable by a public company, to its Directors, including managing director and whole-time director, and its manager in respect of any financial year shall not exceed eleven per cent. of the net profits of that company for that financial year computed in the manner laid down in section 198 except that the remuneration of the Directors shall not be deducted from the gross profits: Provided that the company in general meeting may,4[Omitted], authorise the payment of remuneration exceeding eleven per cent. of the net profits of the company, subject to the provisions of Schedule V: Provided further that, except with the approval of the company in general meeting,5[By a special resolution],— (i) the remuneration payable to any one managing director; or whole-time director or manager shall not exceed five per cent. of the net profits of the company and if there is more than one such director remuneration shall not exceed ten per cent. of the net profits to all such Directors and manager taken together; (ii) the remuneration payable to Directors who are neither managing Directors nor whole-time Directors shall not exceed,— (A) one per cent. of the net profits of the company, if there is a managing or whole-time director or manager; (B) three per cent. of the net profits in any other case.] 5[Provided also that, where the company has defaulted in payment of dues to any bank or public financial institution or non-convertible debenture holders or any other secured creditor, the prior approval of the bank or public financial institution concerned or the non-convertible debenture holders or other secured creditor, as the case may be, shall be obtained by the company before obtaining the approval in the general meeting.] (2) The percentages aforesaid shall be exclusive of any fees payable to Directors under sub-section (5). (3) Notwithstanding anything contained in sub-sections (1) and (2), but subject to the provisions of Schedule V, if, in any financial year, a company has no profits or its profits are inadequate, the company shall not pay to its Directors, including any managing or wholetime director or manager 16[or any other non-executive director, including an independent director], by way of remuneration any sum exclusive of any fees payable to Directors under sub-section (5) hereunder except in accordance with the provisions of Schedule V 6[Omitted]. (4) The remuneration payable to the Directors of a company, including any managing or whole-time director or manager, shall be determined, in accordance with and subject to the provisions of this section, either by the articles of the company, or by a resolution or, if the articles so require, by a special resolution, passed by the company in general meeting and the remuneration payable to a director determined aforesaid shall be inclusive of the remuneration payable to him for the services rendered by him in any other capacity: Provided that any remuneration for services rendered by any such director in other capacity shall not be so included if— (a) the services rendered are of a professional nature; and (b) in the opinion of the Nomination and Remuneration Committee, if the company is covered under sub-section (1) of section 178, or the Board of Directors in other cases, the director possesses the requisite qualification for the practice of the profession. (5) A director may receive remuneration by way of fee for attending meetings of the Board or Committee thereof or for any other purpose whatsoever as may be decided by the Board: Provided that the amount of such fees shall not exceed the amount as may be prescribed: Provided further that different fees for different classes of companies and fees in respect of independent director may be such as may be prescribed. (6) A director or manager may be paid remuneration either by way of a monthly payment or at a specified percentage of the net profits of the company or partly by one way and partly by the other. (7) 14[12[10[Omitted]]] (8) The net profits for the purposes of this section shall be computed in the manner referred to in section 198. (9) 7[If any director draws or receives, directly or indirectly, by way of remuneration any such sums in excess of the limit prescribed by this section or without approval required under this section, he shall refund such sums to the company, within two years or such lesser period as may be allowed by the company, and until such sum is refunded, hold it in trust for the company.] (10) The company shall not waive the recovery of any sum refundable to it under sub-section (9) unless 8[approved by the company by special resolution within two years from the date the sum becomes refundable.] 5[Provided that where the company has defaulted in payment of dues to any bank or public financial institution or non-convertible debenture holders or any other secured creditor, the prior approval of the bank or public financial institution concerned or the non-convertible debenture holders or other secured creditor, as the case may be, shall be obtained by the company before obtaining approval of such waiver.] (11) In cases where Schedule V is applicable on grounds of no profits or inadequate profits,

The Registrar of Companies (ROC) Delhi holds a pivotal role in the Indian corporate landscape. As a regulatory body, it exercises significant powers and bears various responsibilities concerning company registration and compliance. In this article, we will delve into the powers, duties, authority, and jurisdiction of the Registrar of Companies Delhi, shedding light on its crucial role in maintaining a robust corporate framework. Join me, CA Bhuvnesh Kumar Goyal, a practicing Chartered Accountant and a fellow member of the Institute of Chartered Accountants of India, as we explore the intricacies of the ROC Delhi’s functions. Powers of the Registrar of Companies Delhi The Registrar of Companies Delhi possesses a range of powers that empower it to effectively regulate and supervise companies operating within its jurisdiction. Some key powers include: Company Registration: The ROC Delhi holds the authority to oversee the process of company registration in Delhi, ensuring compliance with the Companies Act, 2013. It reviews and approves registration documents, facilitating the creation of legally recognized entities. Issuing Certificates: The Registrar grants certificates of incorporation, which serve as proof of a company’s legal existence. Additionally, it issues certificates related to the alteration of a company’s name, share capital, registered office, and more. Maintaining Registers: It is the responsibility of the ROC Delhi to maintain essential registers, including the Register of Charges, Register of Members, and Register of Directors. These registers provide a comprehensive overview of a company’s affairs and help establish transparency and accountability. Winding Up Proceedings: In cases of insolvency or non-compliance, the Registrar can initiate winding up proceedings against companies, ensuring the orderly dissolution and liquidation of their assets. Duties and Responsibilities of the Registrar of Companies Delhi To fulfill its role effectively, the Registrar of Companies Delhi shoulders various duties and responsibilities: Ensuring Compliance: The ROC Delhi acts as a guardian of legal compliance by ensuring companies adhere to statutory requirements. It reviews financial statements, annual returns, and other mandatory filings to verify adherence to accounting standards and legal norms. Adjudication of Disputes: The Registrar has the authority to settle disputes related to company matters. It acts as a quasi-judicial body, adjudicating on issues such as rectification of records, removal of directors, and approval of compromises and arrangements. Inspection and Investigation: The ROC Delhi conducts inspections and investigations to monitor compliance and investigate suspected corporate malpractices. It has the power to summon company officers, examine books of accounts, and take appropriate actions based on its findings. Dissolution and Striking-off: The Registrar plays a crucial role in dissolving defunct companies or striking them off the register. This process eliminates dormant entities, ensuring the registry reflects an accurate picture of active companies. Authority and Jurisdiction of the Registrar of Companies Delhi The Registrar of Companies Delhi exercises authority and jurisdiction within its designated geographic region. It covers the National Capital Territory of Delhi and monitors the compliance of companies operating within its boundaries. This jurisdictional power empowers the ROC Delhi to enforce statutory provisions and maintain corporate governance standards in the region. Frequently Asked Questions (FAQs) Can the Registrar of Companies Delhi reject a company’s registration application? Yes, the ROC Delhi has the authority to reject a company’s registration application if it fails to meet the requirements stipulated in the Companies Act, 2013. It is crucial for companies to ensure compliance and submit accurate and complete documentation to increase the chances of successful registration. What happens if a company fails to file its annual returns with the ROC Delhi? Non-filing of annual returns is a serious offense and can lead to penalties and legal consequences. The ROC Delhi may initiate legal action against the company, which can result in fines, prosecution, or even the striking off of the company from the register. Can the Registrar of Companies Delhi conduct investigations into suspected corporate fraud? Absolutely. The ROC Delhi has the authority to conduct investigations into suspected corporate fraud or malpractices. It can summon company officers, examine books of accounts, and take necessary actions based on its findings, ensuring transparency and accountability in corporate affairs. What role does the Registrar of Companies Delhi play in the dissolution of companies? The ROC Delhi plays a crucial role in the dissolution of defunct companies or striking them off the register. This process helps in maintaining an updated and accurate registry by eliminating companies that are no longer active or functioning. How can companies seek guidance and assistance from the Registrar of Companies Delhi? Companies can reach out to the ROC Delhi for guidance and assistance through various channels, including their official website, helpline numbers, or by visiting their office. It is advisable for companies to seek professional advice and ensure compliance with legal requirements to avoid any complications. Conclusion The Registrar of Companies Delhi, with its extensive powers, duties, authority, and jurisdiction, plays a vital role in maintaining a robust corporate framework. From overseeing company registration to enforcing compliance and regulating corporate affairs, the ROC Delhi ensures transparency, accountability, and adherence to statutory provisions. As a practicing Chartered Accountant, I recognize the significance of the ROC Delhi’s functions in fostering a conducive business environment. By understanding its powers and responsibilities, companies can navigate the corporate landscape with confidence and contribute to a thriving economy. About the Author: CA Bhuvnesh Kumar Goyal is a practicing Chartered Accountant since 2017 and a fellow member of the Institute of Chartered Accountants of India (ICAI) with membership number 540126. With a deep understanding of corporate regulations and compliance, CA Bhuvnesh brings extensive expertise in company law and accounting practices, helping businesses achieve financial success while ensuring adherence to legal frameworks. Disclaimer: The information provided in this article is for educational purposes only and should not be considered as legal advice. It is always recommended to consult with a qualified professional for specific queries and concerns regarding the Registrar of Companies Delhi and company-related matters.

In summary, Section 139 of the Companies Act 2013 outlines the requirements for appointing auditors in a company. It specifies the duration of their appointment, term limits for auditors, provisions for auditor rotation and multiple auditors, appointment of the first auditor, appointment of auditors for government companies, filling casual vacancies in the auditor’s office, re-appointment of retiring auditors, and the role of the Audit Committee. These provisions ensure transparency, independence, and accountability in the auditing process, promoting good corporate governance practices within companies. Appointment of Auditor at the First Annual General Meeting (AGM) Every company must appoint an individual or a firm as its auditor at its first AGM. The auditor will hold office from the conclusion of that meeting until the conclusion of the sixth AGM. The appointment should be made in accordance with the prescribed manner and procedure. The members of the company should ratify the appointment at every subsequent AGM. Before appointing the auditor, the company must obtain the written consent of the auditor and a certificate from them, confirming their compliance with the prescribed conditions. The certificate should also indicate whether the auditor meets the criteria provided in Section 141 of the Act. The company must inform the appointed auditor of their appointment and file a notice with the Registrar of Companies within fifteen days of the meeting in which the appointment is made. Term Limits for Auditors Listed companies and companies belonging to prescribed classes cannot appoint or re-appoint: An individual auditor for more than one term of five consecutive years. An audit firm as an auditor for more than two terms of five consecutive years. After completing the term, an individual auditor cannot be re-appointed in the same company for five years. After completing the term, an audit firm cannot be re-appointed in the same company for five years. An audit firm with common partners to another audit firm whose tenure has expired in a company in the previous financial year cannot be appointed as the auditor of the same company for a period of five years. Existing companies, present before the commencement of the Act, must comply with these requirements within three years from the Act’s commencement date. The company has the right to remove an auditor, and the auditor also has the right to resign from their position. Rotation and Multiple Auditors Members of a company can resolve to: Rotate the auditing partner and their team at intervals determined by the members. Conduct the audit by more than one auditor. The Central Government can prescribe rules for auditor rotation. First Auditor Appointment For companies other than government companies, the first auditor should be appointed by the Board of Directors within 30 days from the company’s registration date. If the Board fails to appoint the auditor, the members of the company should appoint the first auditor within 90 days at an extraordinary general meeting. The first auditor holds office until the conclusion of the first AGM. Auditor Appointment for Government Companies In the case of government companies or companies owned or controlled by the Central Government, State Government(s), or a combination of both, the Comptroller and Auditor-General of India (CAG) should appoint an auditor within 180 days from the start of the financial year. The auditor appointed by the CAG holds office until the conclusion of the AGM. Casual Vacancy in Auditor’s Office In the case of a company whose accounts are not subject to audit by the CAG, a casual vacancy in the auditor’s office should be filled by the Board of Directors within 30 days. If the vacancy arises due to the auditor’s resignation, the appointment must be approved by the company at a general meeting within three months. In the case of a company whose accounts are subject to audit by the CAG, the CAG should fill the casual vacancy within 30 days. If the CAG fails to make the appointment, the Board of Directors should fill the vacancy within the next 30 days. Re-appointment of Retiring Auditor A retiring auditor may be re-appointed at an annual general meeting if: They are not disqualified for re-appointment. They have not given written notice of their unwillingness to be re-appointed. A special resolution has not been passed at that meeting appointing another auditor or explicitly stating that they shall not be re-appointed. No Appointment or Re-appointment at AGM If at any AGM, no auditor is appointed or re-appointed, the existing auditor will continue to hold office as the company’s auditor. Role of Audit Committee If a company is required to establish an Audit Committee under Section 177 of the Act, all appointments, including filling a casual vacancy in the auditor’s position, should be made after considering the recommendations of the committee. Eligible Individuals and entities are to be appointed as auditors of a company As per the Companies Act 2013, only practicing chartered accountants, audit firms, and limited liability partnerships with practicing chartered accountants as partners are eligible to be appointed as auditors of a company. The Act does not allow for the appointment of any other person or entity as an auditor. Individual Auditors: An individual auditor can be appointed if they are a practicing chartered accountant in India. They must hold a valid certificate of practice issued by the Institute of Chartered Accountants of India (ICAI). The individual should not be disqualified under any provisions of the Act from being appointed as an auditor. Audit Firms: A firm of chartered accountants can be appointed as an auditor. The firm must have a valid certificate of practice issued by the ICAI. The firm must have at least one practicing chartered accountant as its partner, who will be responsible for conducting the audit. Limited Liability Partnerships (LLPs): A limited liability partnership incorporated under the Limited Liability Partnership Act, 2008 can also be appointed as an auditor. The LLP must have a valid certificate of practice issued by the ICAI. It must have at least one practicing chartered accountant as its designated

(1) Every company shall prepare and keep at its registered office books of account and other relevant books and papers and financial statement for every financial year which give a true and fair view of the state of the affairs of the company, including that of its branch office or offices, if any, and explain the transactions effected both at the registered office and its branches and such books shall be kept on accrual basis and according to the double entry system of accounting: Provided that all or any of the books of account aforesaid and other relevant papers may be kept at such other place in India as the Board of Directors may decide and where such a decision is taken, the company shall, within seven days thereof, file with the Registrar a notice in writing giving the full address of that other place: Provided further that the company may keep such books of account or other relevant papers in electronic mode in such manner as may be prescribed. (2) Where a company has a branch office in India or outside India, it shall be deemed to have complied with the provisions of sub-section (1), if proper books of account relating to the transactions effected at the branch office are kept at that office and proper summarized returns periodically are sent by the branch office to the company at its registered office or the other place referred to in sub-section (1). (3) The books of account and other books and papers maintained by the company within India shall be open for inspection at the registered office of the company or at such other place in India by any director during business hours, and in the case of financial information, if any, maintained outside the country, copies of such financial information shall be maintained and produced for inspection by any director subject to such conditions as may be prescribed: Provided that the inspection in respect of any subsidiary of the company shall be done only by the person authorised in this behalf by a resolution of the Board of Directors. (4) Where an inspection is made under sub-section (3), the officers and other employees of the company shall give to the person making such inspection all assistance in connection with the inspection which the company may reasonably be expected to give. (5) The books of account of every company relating to a period of not less than eight financial years immediately preceding a financial year, or where the company had been in existence for a period less than eight years, in respect of all the preceding years together with the vouchers relevant to any entry in such books of account shall be kept in good order: Provided that where an investigation has been ordered in respect of the company under Chapter XIV, the Central Government may direct that the books of account may be kept for such longer period as it may deem fit. (6) If the managing director, the whole-time director in charge of finance, the Chief Financial Officer or any other person of a company charged by the Board with the duty of complying with the provisions of this section, contravenes such provisions, such managing director, whole-time director in charge of finance, Chief Financial officer or such other person of the company shall be punishable 1[with imprisonment for a term which may extend to one year or] with fine which shall not be less than fifty thousand rupees but which may extend to five lakh rupees 1[or with both]. Amendment 1. Omitted by the Companies (Amendment) Act, 2020. Notification dated 28th September, 2020 Amendment Effective from 21st December 2020

Introduction: Decoding the Certificate of Shares Section 46 Companies Act 2013 You’ve probably heard of the Certificate of Shares under Section 46 Companies Act 2013, but what exactly is it all about? In today’s fast-paced corporate world, understanding the nuances of the Companies Act can give you a competitive edge. So, buckle up, and let’s unravel the mysteries surrounding this pivotal regulation! In this comprehensive guide, we will delve into: The importance of share certificates The issuance process under Section 46 The consequences of non-compliance FAQs on the Certificate of Shares Section 46 Companies Act 2013 So, without further ado, let’s dive in! Section 46 of Companies Act 2013 (1) A certificate, issued under the common seal, if any, of the company or signed by two directors or by a director and the Company Secretary, wherever the company has appointed a Company Secretary, specifying the shares held by any person, shall be prima facie evidence of the title of the person to such shares.  (2) A duplicate certificate of shares may be issued, if such certificate — (a) is proved to have been lost or destroyed; or (b) has been defaced, mutilated or torn and is surrendered to the company.  (3) Notwithstanding anything contained in the articles of a company, the manner of issue of a certificate of shares or the duplicate thereof, the form of such certificate, the particulars to be entered in the register of members and other matters shall be such as may be prescribed.  (4) Where a share is held in depository form, the record of the depository is the prima facie evidence of the interest of the beneficial owner.  (5) If a company with intent to defraud issues a duplicate certificate of shares, the company shall be punishable with fine which shall not be less than five times the face value of the shares involved in the issue of the duplicate certificate but which may extend to ten times the face value of such shares or rupees ten crores whichever is higher and every officer of the company who is in default shall be liable for action under section 447.  The Importance of Share Certificates: More Than Just a Piece of Paper When it comes to owning a piece of the corporate pie, share certificates play a crucial role. These nifty little documents serve as proof of your stake in a company, and they come with several perks: Legal recognition of share ownership Facilitating share transfers Providing evidence for tax purposes Enhancing credibility and transparency Issuing Share Certificates: The Nuts and Bolts of Section 46 Certificate of shares under section 46 Companies Act 2013 outlines the rules and regulations for issuing share certificates in India. Let’s break it down, shall we? Who’s responsible for issuing share certificates? The buck stops with the company’s Board of Directors. They’re the ones in charge of issuing share certificates to all their shareholders. What’s the timeline for issuance? Time’s a-ticking! The Board must issue share certificates within two months from the date of allotment (in case of a new issue) or within one month from the date of receipt of the instrument of transfer (in case of a transfer). What if there’s a delay? Don’t dilly-dally! If the company fails to issue share certificates within the prescribed time, they may face penalties under Section 46(5) of the Companies Act 2013. What details must a share certificate contain? A share certificate should be the spitting image of the company’s identity. It must include: The name of the company The company’s registered office address CIN Number of the Company The certificate number The name of the shareholder The number and class of shares The distinctive numbers of the shares The date of issue Consequences of Non-Compliance: The Price to Pay Failure to adhere to the Certificate of Shares Section 46 Companies Act 2013 can lead to some serious consequences: Penalties for the company and its officers Loss of credibility among shareholders and potential investors Difficulty in raising capital FAQs on the Certificate of Shares Section 46 Companies Act 2013 What is a duplicate share certificate, and when can it be issued? A duplicate share certificate is like a doppelganger of the original. It can be issued if the original certificate is lost, stolen, destroyed, or defaced, provided that the shareholder submits a request along with relevant proof. Can a private company issue share certificates? You bet! Both public and private limited company can issue share certificates as long as they comply with the provisions of the Companies Act 2013. Are share certificates required for dematerialized shares? No siree! Dematerialized shares are held electronically, so there’s no need for physical share certificates. These shares are managed through depositories and participants, streamlining the entire process. Can a shareholder request a split or consolidation of share certificates? Absolutely! Shareholders can request a split (division of one certificate into multiple certificates) or consolidation (combining multiple certificates into one) of share certificates. However, the company may charge a nominal fee for this service. What if a company refuses to issue a share certificate? If a company refuses to issue a share certificate, the aggrieved shareholder can approach the National Company Law Tribunal (NCLT) to seek redressal. The NCLT has the power to direct the company to issue the share certificate. Official website of NCLT is https://nclt.gov.in/ Procedure to issue share certificate The procedure to issue a share certificate generally involves the following steps: Share allotment or transfer: When a company allots new shares to investors or when existing shareholders transfer their shares, the company is required to issue a share certificate to the new shareholder. Board resolution: The company’s Board of Directors must pass a resolution approving the issuance of share certificates. This resolution should include details such as the names of the shareholders, the number of shares allotted or transferred, and the class of shares. Prepare the share certificate: Create the share certificate with essential details, including the company’s name, registered office address, certificate number, name of the shareholder,

Introduction Are you looking for information abour director identification number, its surrender and reactivation ? Hi, my name is CA Bhuvnesh Kumar Goyal, I am a practicing Chartered Accountant with B K Goyal & Co LLP. B K Goyal & co LLP is a CA Firm in India engaged in the practice of company law since 2017 including company incorporations, gst registration, income tax, trademark registration, income tax litigations etc. Incorporating a company in India requires a lot of documentation and compliance with government regulations. One such important requirement is obtaining a Director Identification Number (DIN) for all the directors of the company. In this blog, we will explore what DIN is, why it is important, and how to obtain one. What is a Director Identification Number (DIN)? A Director Identification Number (DIN) is a unique 8-digit alphanumeric code issued by the Ministry of Corporate Affairs (MCA) to every individual who is appointed as a director of a company in India. The DIN is a permanent identification number that stays with the individual for the rest of their lives, regardless of whether they continue to be a director of any company or not. Why is DIN Important? The Director Identification Number (DIN) is an important compliance requirement for companies in India. It helps the government keep track of the directors and their activities, ensuring transparency and accountability in the corporate sector. Obtaining a DIN is a pre-requisite for incorporating a company in India and is mandatory for every director. How to Surrender a Director Identification Number (DIN)? In some cases, directors may need to surrender their Director Identification Number (DIN) if they cease to be a director of a company. Here’s a step-by-step guide on how to surrender a DIN: Cease to be a Director: The first step in surrendering a DIN is to cease to be a director of a company. This can be done by resigning from the position or by removal through a board resolution. Obtain a No Objection Certificate (NOC): Once the individual has ceased to be a director, they need to obtain a No Objection Certificate (NOC) from the company. The NOC should state that the company has no objections to the individual surrendering their DIN. File Form DIR-11: The next step is to file Form DIR-11 with the Ministry of Corporate Affairs (MCA). This form is used to notify the MCA of a change in the director’s status, including resignation or removal. Surrender DIN: After filing Form DIR-11, the individual can surrender their DIN by submitting a request to the MCA. They need to provide the NOC from the company and a declaration that they no longer hold any directorship in any company in India. Confirmation of Surrender: The MCA will process the request to surrender the DIN and provide confirmation once the surrender has been accepted. It is important to note that surrendering a DIN is a straightforward process but can take some time, so it’s best to start the process as soon as possible. Failing to surrender a DIN can result in penalties and fines for the individual, so it is crucial to follow the proper procedure and complete the process in a timely manner. Surrendering a Director Identification Number (DIN) is a process that must be followed when an individual ceases to be a director of a company in India. With the right information and a step-by-step guide, surrendering a DIN should be a smooth and hassle-free experience. How to Obtain a Director Identification Number (DIN)? Getting a Director Identification Number (DIN) is a straightforward process and can be completed in a few simple steps. Here’s a step-by-step guide to obtaining a DIN: Determine Eligibility: To be eligible for a DIN, an individual must be appointed as a director of a company in India. They must have a valid PAN card and an active email address. Prepare the Required Documents: The following documents are required to obtain a DIN: PAN Card Proof of Identity (Passport/Aadhar Card/Voter ID) Proof of Residence (Passport/Aadhar Card/Voter ID/Electricity Bill/Rent Agreement) Digital Signature Certificate (DSC) Apply for DIN: The next step is to apply for the DIN through the MCA portal. The process involves filling in the required details, uploading the required documents, and paying the fees. Approval of DIN: Once the application for DIN is submitted, the MCA will process it and approve the DIN if all the details are in order. How to Activate a Deactivated Director Identification Number (DIN)? In some cases, a Director Identification Number (DIN) may become deactivated due to various reasons such as non-filing of annual returns or failure to notify the Ministry of Corporate Affairs (MCA) of a change in the director’s status. Here’s a step-by-step guide on how to activate a deactivated DIN: Determine the Reason for Deactivation: The first step in activating a deactivated DIN is to determine the reason for deactivation. This information can be obtained from the MCA website or by contacting the MCA directly. File Required Forms: Depending on the reason for deactivation, the individual may need to file one or more forms with the MCA. For example, if the DIN is deactivated due to non-filing of annual returns, the individual may need to file the overdue returns and pay the applicable fees. Update the MCA: The individual may also need to update the MCA with their current information, such as their address, email, and phone number. This can be done by filing the relevant forms with the MCA. Request for Activation: Once all the required forms have been filed and the necessary updates have been made, the individual can request the activation of their deactivated DIN by submitting a written request to the MCA. Confirmation of Activation: The MCA will process the request to activate the deactivated DIN and provide confirmation once the activation has been accepted. It is important to note that activating a deactivated DIN can take some time, so it’s best to start the process as soon as possible. Failing to activate

Introduction The Companies Act 2013 is a comprehensive legislation that governs the functioning of companies in India. It lays down various rules and regulations that companies must adhere to, including the requirement of holding board meetings under Section 173 of the Act. In this blog, we will focus on the quorum requirements for board meetings under Section 174 of the Companies Act 2013. We will provide a step-by-step guide to help you understand the quorum requirements and ensure that your board meetings are conducted in accordance with the law. Understanding Quorum in Board Meetings Quorum is the minimum number of members required to be present at a meeting to make the proceedings of the meeting valid. It ensures that decisions made during a meeting are not arbitrary and represent the consensus of the majority of the Board members. As per Section 174 of the Companies Act 2013, a quorum of a Board meeting should be: One-third of the total strength of the Board or Two directors, whichever is higher. For example, if a company has nine directors, then the quorum for a Board meeting would be three. On the other hand, if a company has only four directors, then the quorum for a Board meeting would be two. Steps to Determine Quorum for Meetings of Board Determining the quorum for Board meetings is an important aspect of corporate governance. Below are the steps to calculate the quorum for a Board meeting: Step 1: Determine the total strength of the Board The total strength of the Board is the number of directors appointed to the Board of a company. It can be determined by referring to the company’s articles of association or the resolution passed by the Board of Directors. Step 2: Calculate one-third of the total strength of the Board One-third of the total strength of the Board is the minimum number of directors required to form a quorum. For example, if a company has nine directors, one-third of the total strength of the Board would be three directors. Step 3: Determine the minimum number of directors required for quorum The minimum number of directors required for quorum is either one-third of the total strength of the Board or two directors, whichever is higher. Step 4: Check for the nearest number In case the total strength of the Board is not a multiple of three, the quorum should be calculated based on the nearest number. For example, if a company has 11 directors, one-third of the total strength of the Board would be 3.67, which should be rounded off to four directors. Consequences of Not Maintaining Quorum Not maintaining quorum can have serious consequences for a company. Some of the consequences are: Delay in decision-making: If a quorum is not present, decisions cannot be taken, leading to a delay in decision-making. Invalid decisions: Decisions taken without quorum are invalid and can be challenged in court. Legal action: Non-compliance with the quorum requirements can result in legal action against the company and its directors   FAQs Q. What happens if a quorum is not met for a board meeting? A. If a quorum is not met for a board meeting, the meeting cannot proceed, and any business transacted at the meeting will be deemed invalid. Q. Can a director appoint a proxy to attend a board meeting? A. Yes, a director can appoint a proxy to attend a board meeting on their behalf. The proxy must be a member of the company and must be authorized to act as a proxy by the director. Q. Can a director who is interested in a contract or arrangement be counted towards the quorum? A. No, a director who is interested in a contract or arrangement that is to be discussed at the meeting cannot be counted towards the quorum. Section 174 of Companies Act 2013 (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

Introduction As per the Companies Act 2013, conducting regular board meetings is mandatory for every company. The purpose of these meetings is to discuss and make decisions on various matters related to the company’s growth and development. To ensure transparency and accountability, the Companies Act 2013 provides a detailed framework for conducting board meetings, including the procedure, frequency, and quorum required. In this blog, we will provide a step-by-step guide on how to conduct board meetings under Section 173 of the Companies Act 2013. We will cover everything from the pre-meeting preparations to the post-meeting follow-up, including FAQs and practical tips. Pre-Meeting Preparation Before conducting a board meeting, there are several things you need to do to prepare yourself and your team. Here’s a step-by-step guide on what to do: Set the Agenda: The first step is to set the agenda for the meeting. This should be done well in advance of the meeting and should include all the items that need to be discussed. The agenda should be circulated among all the board members to give them sufficient time to prepare. Select the Date and Venue: Once the agenda is set, the next step is to select the date and venue for the meeting. The date should be convenient for all the board members, and the venue should be easily accessible and have all the necessary facilities. Send the Meeting Notice: Once the date and venue are finalized, the meeting notice should be sent to all the board members. The notice should include the date, time, and venue of the meeting, along with the agenda. Ensure Quorum: It is mandatory to have a quorum of at least two directors or one-third of the total strength of the board members, whichever is higher. Therefore, before the meeting, make sure that there are enough members present to constitute a quorum. Conducting the Meeting Once the pre-meeting preparations are done, it’s time to conduct the meeting. Here’s a step-by-step guide on how to do it: Start with Welcome and Introductions: Begin the meeting by welcoming everyone and introducing any new members. This helps in setting a positive tone for the meeting and creating a conducive environment for discussion. Follow the Agenda: Stick to the agenda and discuss each item in detail. Ensure that all the members get an opportunity to express their views and opinions. Record the Minutes: It is mandatory to record the minutes of the meeting. The minutes should include the names of the members present, the agenda items discussed, the decisions taken, and the action points. Make sure to circulate the minutes among all the members after the meeting. Vote on Resolutions: If there are any resolutions to be passed, ensure that they are put to vote in accordance with the Companies Act 2013. The votes should be recorded in the minutes, along with the names of the members who voted for or against the resolution. Post-Meeting Follow-Up After the meeting is over, there are a few things that you need to do to wrap up the proceedings. Here’s a step-by-step guide on what to do: Circulate the Minutes: As mentioned earlier, the minutes should be circulated among all the members after the meeting. This ensures that everyone is aware of the decisions taken and the action points. Follow-up on Action Points: Follow up on the action points and ensure that they are completed within the stipulated timeframe. It is also a good practice to periodically check on the progress of the action points until they are completed. File the Minutes: Once the minutes have been circulated and approved, they should be filed with the Registrar of Companies. This is a legal requirement under the Companies Act 2013. FAQs Q. Is it mandatory to conduct board meetings under Section 173 of the Companies Act 2013? A. Yes, it is mandatory for every company to conduct board meetings under Section 173 of the Companies Act 2013. Q. What is the minimum quorum required for board meetings? A. The minimum quorum required for board meetings is two directors or one-third of the total strength of the board members, whichever is higher. Q. Can board meetings be conducted online? A. Yes, board meetings can be conducted online through video conferencing or other audio-visual means. Conclusion Conducting board meetings under Section 173 of the Companies Act 2013 is a crucial aspect of corporate governance. By following the step-by-step guide provided in this blog, you can ensure that your meetings are conducted smoothly and effectively. Remember to prepare well in advance, follow the agenda, and record the minutes accurately. With these best practices in place, you can master the art of conducting board meetings and help your company achieve its growth and development objectives. Section 173 of Companies Act 2013 (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