A NOTE ON THE WORKING OF
A NOTE ON THE WORKING OF
THE
THE BOARD
BOARD OF
OF DIRECTORS
DIRECTORS
by : by : DR. T.K. JAIN DR. T.K. JAIN AFTERSCHO AFTERSCHO☺☺OLOL
centre for social entrepreneurship centre for social entrepreneurship sivakamu veterinary hospital road sivakamu veterinary hospital road
bikaner 334001 rajasthan, india bikaner 334001 rajasthan, india FOR – PGPSE PARTICIPANTS FOR – PGPSE PARTICIPANTS
WHO IS A DIRECTOR?
WHO IS A DIRECTOR?
SEC 2(13) : ANY PERSON WHO OCCUPIES SEC 2(13) : ANY PERSON WHO OCCUPIES
THE POSITION OF A DIRECTOR – BY THE POSITION OF A DIRECTOR – BY
WHATEVER NAME CALLED WHATEVER NAME CALLED
CASE STUDY : FERGUSON
CASE STUDY : FERGUSON
V.S WILSON
V.S WILSON
Truely speaking the director of a company is Truely speaking the director of a company is
an agent of the company an agent of the company
Case study : Smith v/s Anderson
Case study : Smith v/s Anderson
Directors are truely the trustees of the property Directors are truely the trustees of the property
fo the company fo the company
DEEMED DIRECTOR ???
DEEMED DIRECTOR ???
As per sec. 5 , 303, 372A : if directors act on As per sec. 5 , 303, 372A : if directors act on
advice of a person, that person is called advice of a person, that person is called
deemed director. deemed director.
Sec. 7 : if that person is giving professional Sec. 7 : if that person is giving professional advice – that person will not be called deemed advice – that person will not be called deemed
Managing Director ???
Managing Director ???
Sec
Sec 2(26) 2(26) : : a a person who person who has has been givenbeen given substantial powers of management is called substantial powers of management is called managing director
managing director - - he he can can be be appointed – appointed – byby - board resolution / articles / AGM /
- board resolution / articles / AGM / agreements
Minimum number of directors
Minimum number of directors
Sec. 252 : public company : 3, private Sec. 252 : public company : 3, private
company : 2 company : 2
no maximum limit in law no maximum limit in law
these limits can be set in articles of association these limits can be set in articles of association sec. 259- when the number of direcors increase sec. 259- when the number of direcors increase
Directors representing small
Directors representing small
shareholders
shareholders
(only on public companies with Rs. 5 crore or (only on public companies with Rs. 5 crore or
more) more)
As per Companies (appointment of small As per Companies (appointment of small shareholders' director) rules 2001 – there shareholders' director) rules 2001 – there
should director / s representing small should director / s representing small
shareholders. shareholders.
Small shareholders : holding upto Rs. 20000 Small shareholders : holding upto Rs. 20000
nominal
First directors (sec. 254)
First directors (sec. 254)
May be appointed by articles of association. May be appointed by articles of association. Regulation 64 of Table A of schedule I : the Regulation 64 of Table A of schedule I : the first directors are appointed by subscribers of first directors are appointed by subscribers of
MOA & AOA . MOA & AOA .
Subsequent Directors (sec. 255,
Subsequent Directors (sec. 255,
256)
256)
They are appointed by AGM They are appointed by AGM 2/3
2/3rrdd directors are retiring directors - 1/3directors are retiring directors - 1/3rrdd maymay be non-retiring directors. Thus if you have 12 be non-retiring directors. Thus if you have 12 directors, 8 directors have to retire by rotation. directors, 8 directors have to retire by rotation.
Case study : S. Jabh Singh vs
Case study : S. Jabh Singh vs
Panesar Mech. Works P. Ltd.
Panesar Mech. Works P. Ltd.
Where no period for retirement is prescribed in Where no period for retirement is prescribed in
AOA, then directors will retire when they are AOA, then directors will retire when they are
removed as per sec. 284. removed as per sec. 284.
Case : Consolidated Nickel Mines
Case : Consolidated Nickel Mines
Ltd.
Ltd.
When AGM is not held, directors due to retire, When AGM is not held, directors due to retire,
will retire on their due date – similarly when will retire on their due date – similarly when AGM is adjourned, the directors due to retire, AGM is adjourned, the directors due to retire,
will retire on that that day will retire on that that day
retiring director may be reappointed. retiring director may be reappointed.
FIFO in retirements FIFO in retirements
How will you become a director?
How will you become a director?
At least 14 day notice of willingness to become At least 14 day notice of willingness to become
a director with fees of Rs. 500 (by the person a director with fees of Rs. 500 (by the person
or the person who is proposing someone as or the person who is proposing someone as
director). director).
The person must also submit his accent to The person must also submit his accent to become a
Can BoD (board of directors)
Can BoD (board of directors)
appoint additional directors?
appoint additional directors?
Yes – IF AOA authorise it . Yes – IF AOA authorise it .
But this appointment will be till next AGM. But this appointment will be till next AGM. If AGM is not held, the director will retire on If AGM is not held, the director will retire on
the date of AGM. the date of AGM.
(sec. 260) (sec. 260)
Casual Appointments (Sec. 262)
Casual Appointments (Sec. 262)
If there is a vacancy, the board may appoint a If there is a vacancy, the board may appoint a
director as per procedure in AoA. This is director as per procedure in AoA. This is
casual appointment. casual appointment.
ALTERNATE DIRECTOR (SEC.
ALTERNATE DIRECTOR (SEC.
313)
313)
BoD may appoint alternate director in place of BoD may appoint alternate director in place of
a director who is going for a long vacation a director who is going for a long vacation -the alternate director will leave -the position the alternate director will leave the position when original director returns. It must be for 3 when original director returns. It must be for 3
months or more. months or more.
Appointment by Central Govt.
Appointment by Central Govt.
(sec. 408)
(sec. 408)
If Company Law Board thinks it is necessary, If Company Law Board thinks it is necessary, then Central govt. May appoint a director for a then Central govt. May appoint a director for a
period upto 3 years. period upto 3 years.
This director will not require qualification This director will not require qualification shares (minimum number of shares to be held shares (minimum number of shares to be held
by every director to be eligible to become a by every director to be eligible to become a
director). director).
Appointment by 3
Appointment by 3
rrddparties
parties
Financial institutions like Financial institutions like
IDBI/IFCI/ICICI/SBI etc. Can appoint IDBI/IFCI/ICICI/SBI etc. Can appoint
addional nominee directors – their particulars addional nominee directors – their particulars
have to be submitted in form no. 32. have to be submitted in form no. 32.
Appointment in AGM
Appointment in AGM
As per sec. 263 – a director is appointed by As per sec. 263 – a director is appointed by
shareholders – by simple majority. Each shareholders – by simple majority. Each director will require separate resolution. director will require separate resolution.
Principle of Proportional
Principle of Proportional
Representation (sec. 265)
Representation (sec. 265)
In order to enable minority shareholders, this In order to enable minority shareholders, this principle has been introduced. The directors principle has been introduced. The directors appointed by this principle should hold office appointed by this principle should hold office for 3 years and cannot be removed by AGM as for 3 years and cannot be removed by AGM as
per sec. 284. per sec. 284. (upto 2/3
(upto 2/3rrdd directors may be appointed by thisdirectors may be appointed by this system – by single transferable vote /
system – by single transferable vote / cumulative voting).
MD / whole time director (sec.
MD / whole time director (sec.
269)
269)
Every public company having 5 crore or more Every public company having 5 crore or more capital must have an MD / whole time director. capital must have an MD / whole time director. It requires permission of Central Government / It requires permission of Central Government / or apply as per schedule XIII and submit return or apply as per schedule XIII and submit return
in form 25C within 90 days of appointment. in form 25C within 90 days of appointment.
Schedule XIII – part I
Schedule XIII – part I
The person being appointed as MD must not The person being appointed as MD must not
have violated any act like Central Excise, have violated any act like Central Excise,
Income Tax, Wealth Tax, Customs, FEMA etc. Income Tax, Wealth Tax, Customs, FEMA etc.
Age – between 25 and 70 (A major with less Age – between 25 and 70 (A major with less
than 25 years age / more than 70 ,can also than 25 years age / more than 70 ,can also
become, if special resolution + govt. become, if special resolution + govt.
Permission is obtained). Permission is obtained).
must not have violated COFEPOSA must not have violated COFEPOSA
Maximum period of term
Maximum period of term
The
The maximum maximum period period is is 5 5 years years --reappointment is permitted.
Maximum remuneration (sec.
Maximum remuneration (sec.
198)
198)
5% 5%
total managerial remuneration of the company total managerial remuneration of the company = 11% of profit (computed as per sec. 349 and = 11% of profit (computed as per sec. 349 and
350) 350)
for part time director : 1% (if MD is there, 3%, for part time director : 1% (if MD is there, 3%,
if there is no MD) if there is no MD)
Sitting fees (sec. 309)
Sitting fees (sec. 309)
Maximum fees : 20000 for each meeting Maximum fees : 20000 for each meeting
(when turnover is above 50 crore and capital + (when turnover is above 50 crore and capital +
reserves at least 10 crores). reserves at least 10 crores).
Otherwise maximum : 10000 / per meeting. Otherwise maximum : 10000 / per meeting.
Qualification of directors (sec.
Qualification of directors (sec.
274)
274)
Qualifications are not mentioned, but Qualifications are not mentioned, but
disqualifications are mentioned in the law. A disqualifications are mentioned in the law. A
person of unsound mind, undischarted person of unsound mind, undischarted insolvent, a person imprisoned for moral insolvent, a person imprisoned for moral turpitude for
turpitude for 6 6 months months or or more more is is not not eligibleeligible for directorship.
Case : Oriental Metal Pressing
Case : Oriental Metal Pressing
works P. Ltd vs. Bhaskar
works P. Ltd vs. Bhaskar
kashinath
kashinath
The court held that only individual can be The court held that only individual can be director, a firm or association cant be director, director, a firm or association cant be director,
as it is a position of trust. as it is a position of trust.
Case : People's bank of northern
Case : People's bank of northern
India
India
Articles of association may exempt persons of Articles of association may exempt persons of
technical / professional qualification from technical / professional qualification from having qualification shares. Otherwise the having qualification shares. Otherwise the
articles may require the director to have articles may require the director to have
qualification shares. qualification shares.
Qualification shares (sec. 270)
Qualification shares (sec. 270)
Director must have qualification shares in 2 Director must have qualification shares in 2
months from appointment months from appointment
the nominal value of qualification shares the nominal value of qualification shares
should not be more than Rs. 5000 should not be more than Rs. 5000
bearer of share warrant cant be said to be bearer of share warrant cant be said to be
Penalty : sec 272
Penalty : sec 272
If a director doesnt acquire qualification shares If a director doesnt acquire qualification shares in 2 months, he shall pay penalty Rs. 500 per in 2 months, he shall pay penalty Rs. 500 per
day. (all these provisions are applicable only day. (all these provisions are applicable only
on public companies) on public companies)
Number of directorship (max.)
Number of directorship (max.)
sec. 275
sec. 275
No person can become director of more than No person can become director of more than
15
Sec. 278 – what to exclude from
Sec. 278 – what to exclude from
15 companies
15 companies
Following are not counted in 15
Following are not counted in 15 companies :companies : private company
private company unlimited company unlimited company
a company in which the person is alternate director a company in which the person is alternate director
associa
association not for tion not for profitprofit penalty :
penalty : (sec. 279) (sec. 279) : : upto 50000 iupto 50000 if you become f you become director director of more than 15
Vacation of post of director (sec.
Vacation of post of director (sec.
283)
283)
A
A director director has has to to vacate vacate if if ::
he is of unsound mind, he doesnt acquire he is of unsound mind, he doesnt acquire qualification shares in 2 months, he is judged qualification shares in 2 months, he is judged
insolvent, convicted for moral turpitude & insolvent, convicted for moral turpitude & imprisoned for 6 months or more, absents the 3 imprisoned for 6 months or more, absents the 3 consecutive meetings or for 3 months (without consecutive meetings or for 3 months (without
leave), he doesnt disclose his interest in a leave), he doesnt disclose his interest in a
Removal of director (sec. 284,
Removal of director (sec. 284,
388B, 402, )
388B, 402, )
Shareholders can remove a director by Shareholders can remove a director by ordinary resolution. They have to send a ordinary resolution. They have to send a
special notice (14 day notice) for this meeting special notice (14 day notice) for this meeting
and pass the resolution. They cant remove a and pass the resolution. They cant remove a
director appointed by Govt / financial director appointed by Govt / financial
institution.
Removal by govt. In case of fraud
Removal by govt. In case of fraud
If the director is engaged in fraud, If the director is engaged in fraud, mal- practices, anti-social activities etc. Or the practices, anti-social activities etc. Or the company is not managed properly or the company is not managed properly or the company is working against the interest of company is working against the interest of
lenders / financers, or the company is lenders / financers, or the company is following
Removal by company law board
Removal by company law board
In order to prevent oppression and In order to prevent oppression and
mismanagement, CLB can remove director mismanagement, CLB can remove director (sec. 397,398,402) – that director cant become (sec. 397,398,402) – that director cant become
director of another company for 5 years. director of another company for 5 years.
Loans to director (sec. 295)
Loans to director (sec. 295)
Without prior permission from government, no Without prior permission from government, no
company can give loan to its director / firm company can give loan to its director / firm
(where the director of this company is a partner (where the director of this company is a partner
/
/ proprietor ) proprietor ) / / company of company of its its director (idirector (itsts director is holding 25% voting power in that director is holding 25% voting power in that
company), company),
however, these provisions dont apply to private however, these provisions dont apply to private
WHO MAY CALL BOARD
WHO MAY CALL BOARD
MEETING ?
MEETING ?
Any director can call a board meeting or he Any director can call a board meeting or he may make a requisition for a board meeting as may make a requisition for a board meeting as
per Regulation 73 of table A of schedule I. per Regulation 73 of table A of schedule I.
NUMBER OF BOARD
NUMBER OF BOARD
MEETINGS?
MEETINGS?
At least one in 3 months and at least 4 At least one in 3 months and at least 4
meetings in a year. At least 15 notice of the meetings in a year. At least 15 notice of the board meeting must be given at the address of board meeting must be given at the address of
the director / fax. the director / fax.
There must be at least 7 days notice of agenda / There must be at least 7 days notice of agenda /
notes
QUORUM (SEC. 287)
QUORUM (SEC. 287)
It means the minimum number of persons who It means the minimum number of persons who must be present in the board meeting. At least must be present in the board meeting. At least
1/3
1/3rrdd must must be be present present (or (or two two = = whichever iswhichever is more). Only those who are disinterested can more). Only those who are disinterested can
come and participated. Those who are come and participated. Those who are interested in the matters, cannot vote. If interested in the matters, cannot vote. If
quorum is not present, adjourn the meeting for quorum is not present, adjourn the meeting for same day, next week. A fresh notice is required same day, next week. A fresh notice is required
Validity of the act of directors
Validity of the act of directors
(sec. 290)
(sec. 290)
The powers of directors are defined in law and The powers of directors are defined in law and also in articles of association. They can act in also in articles of association. They can act in their powers. Even if a director is disqualified their powers. Even if a director is disqualified
or later on it is discovered that he was not or later on it is discovered that he was not appointed properly, his acts done earlier will appointed properly, his acts done earlier will
Minutes of the meeting of the
Minutes of the meeting of the
board of directors
board of directors
Minutes of the board meetings must be Minutes of the board meetings must be
prepared in 30 days of the meeting and must be prepared in 30 days of the meeting and must be
preserved in minutes book – duly serial preserved in minutes book – duly serial
numbered. The chairman must sign each page numbered. The chairman must sign each page of the minutes book. The minutes book should of the minutes book. The minutes book should
not have loose leaves. The chairman may not have loose leaves. The chairman may
remove the material which is irrelevant. remove the material which is irrelevant.
Minutes book as evidence
Minutes book as evidence
Minutes book is a legal evidence as per sec. Minutes book is a legal evidence as per sec.
194, so it should be properly kept. Any director 194, so it should be properly kept. Any director
can inspect the minutes book. can inspect the minutes book.
Chairman of the board of directors
Chairman of the board of directors
meetings
meetings
Chairman can be elected by the board of Chairman can be elected by the board of
director. If there is no chairman or he is absent, director. If there is no chairman or he is absent,
the meeting may select its chairman in 5 the meeting may select its chairman in 5
minutes of the meeting. minutes of the meeting.
As per regulation 74 of Table A of Schedule I, As per regulation 74 of Table A of Schedule I,
chairman has a casting vote. chairman has a casting vote.
Sudha Soni has said that s
Sudha Soni has said that she will not be able to he will not be able to attendattend board meetings as she is going to the USA. Will you board meetings as she is going to the USA. Will you still send her notice for board meetings (she being a still send her notice for board meetings (she being a director). If alternate director is appointed, will you director). If alternate director is appointed, will you
still send her a notice
still send her a notice of the meeting?of the meeting?
Yes – in both the cases, notice has to be sent to Yes – in both the cases, notice has to be sent to
the director. In the second case, to both the the director. In the second case, to both the
directors directors
Is it necessary that the notice of
Is it necessary that the notice of
BOM must specify the business to
BOM must specify the business to
be discussed?
be discussed?
No – it can be sent separately. (we have No – it can be sent separately. (we have discussed
discussed - - it it requires requires only only 7 7 days days notice, notice, butbut board meeting requires 15 day notice).
Can board meeting be held on
Can board meeting be held on
public holiday / after business
public holiday / after business
hours?
hours?
Yes Yes
Case : as per law you have to have one meeting Case : as per law you have to have one meeting at least in every quarter. However, due to lack at least in every quarter. However, due to lack
of qorum (as your directors are mostly in the of qorum (as your directors are mostly in the USA), no meeting is held. Have you violated USA), no meeting is held. Have you violated
the law? the law?
No – you made an efforts – the meeting was No – you made an efforts – the meeting was
not held due to lack of quorum. not held due to lack of quorum.
Board held a meeting on 31 Jan, as every
Board held a meeting on 31 Jan, as every
year you have a meeting on 31 Jan. No
year you have a meeting on 31 Jan. No
notice was given. Is it a valid meeting?
notice was given. Is it a valid meeting?
Yes, it is still a valid meeting. Yes, it is still a valid meeting.
Audit committee ? ? ?
Audit committee ? ? ?
Sec. 292 A and clause 49 of listing agreement Sec. 292 A and clause 49 of listing agreement
requires every company to appoint an audit requires every company to appoint an audit committee of directors. It will look into the committee of directors. It will look into the
working of the company. working of the company.
Clause 49
Clause 49
It requires that audit committee must be It requires that audit committee must be appointed by all those companies which are appointed by all those companies which are listed companies. Audit committee can have listed companies. Audit committee can have
only independent directors. The company only independent directors. The company secretary will be the secretary of the audit secretary will be the secretary of the audit
committee also. It must have meetings just like committee also. It must have meetings just like
Registers of directors (sec. 303)
Registers of directors (sec. 303)
Every company must keep a register of the Every company must keep a register of the
directors. The register must be a bound book. It directors. The register must be a bound book. It
will also prepare a form no. 32 and file with will also prepare a form no. 32 and file with
the registrar of the companies about the the registrar of the companies about the directors. (in 30 days of appointment of the directors. (in 30 days of appointment of the dreictors) comapny must keep a resiter of all dreictors) comapny must keep a resiter of all
the contracts in which director is interested the contracts in which director is interested (sec. 301) register of shareholding of directors (sec. 301) register of shareholding of directors
Offences and penalties (sec. 630,
Offences and penalties (sec. 630,
621A, 633)
621A, 633)
If directors commit any mistake / offence, he is If directors commit any mistake / offence, he is
punishable by Rs. 10000 / with / without punishable by Rs. 10000 / with / without imprisonment upto 2 years as per sec. 630, imprisonment upto 2 years as per sec. 630, however, court can grant relief as per sec. 633. however, court can grant relief as per sec. 633.
Case : Rohit Samsukha wants to
Case : Rohit Samsukha wants to
resign from the post of MD, can
resign from the post of MD, can
he do so ?
he do so ?
No, he has to follow the terms and conditions No, he has to follow the terms and conditions
of the contract. He can resign only as per of the contract. He can resign only as per terms. However, other directors can resign any terms. However, other directors can resign any
time – even orally – whether the company time – even orally – whether the company accepts it or not, but Rohit is MD, he cant. accepts it or not, but Rohit is MD, he cant.
Pankaj is not a member of our company,
Pankaj is not a member of our company,
but he wants to inspect our register of
but he wants to inspect our register of
directors, can he do so ?
directors, can he do so ?
Yes – during business hours. For members it is Yes – during business hours. For members it is
free, but for others (Pankaj), there is a fee of free, but for others (Pankaj), there is a fee of
Re. 1. Re. 1.
ABC ltd and XYZ ltd. Make a contract, Sudha ABC ltd and XYZ ltd. Make a contract, Sudha
has interest in the contract, but she doesnt has interest in the contract, but she doesnt disclose it in the board meeting or in form disclose it in the board meeting or in form 24AA , she holds .1% in both the companies. 24AA , she holds .1% in both the companies.
What will happen? What will happen?
Ordinarily
Ordinarily fine fine of of 50000 50000 , , however, however, there there areare exceptions
exceptions - - so so probably probably Sudha Sudha will will escapeescape due to these exceptions – like she has very due to these exceptions – like she has very
small holding (less than 2%) small holding (less than 2%)
Case : MR electronics
Case : MR electronics
components
components
Advance salary to the wife of a director will Advance salary to the wife of a director will
not come in sec. 295 not come in sec. 295
Case : Dr. Fredie Ardeshir
Case : Dr. Fredie Ardeshir
Sale of flat on instalment to the director will Sale of flat on instalment to the director will
not come under sec. 295 not come under sec. 295
Contract with firms related to
Contract with firms related to
director (sec. 297)
director (sec. 297)
A company cannot enter into a contract with A company cannot enter into a contract with
another firm / company in which its own another firm / company in which its own
director is a partner / owner, unless it has been director is a partner / owner, unless it has been
approved by the board. approved by the board.
Exemptions : if it is cash transaction, or it is a Exemptions : if it is cash transaction, or it is a
ordinary transaction in banking / insurance ordinary transaction in banking / insurance firm or if the value of transaction is less than firm or if the value of transaction is less than
Rs. 5000 per annum. Rs. 5000 per annum.
Case study
Case study
Professional services (like auditing, Professional services (like auditing, consultancy) dont come in sec. 297. consultancy) dont come in sec. 297.
Notice by director
Notice by director
A director has to give notice in form 24AA A director has to give notice in form 24AA when a company is about to enter into contract when a company is about to enter into contract in which director is interested. The notice must in which director is interested. The notice must
be given to the board of directors when they be given to the board of directors when they
meet. (sec. 299) meet. (sec. 299) penalty : Rs. 50000 penalty : Rs. 50000
Case : fire stone tyre & rubber co
Case : fire stone tyre & rubber co
v/s synthetics and chemicals co.
v/s synthetics and chemicals co.
Interest here means personal interest – not Interest here means personal interest – not official interest and includes closeness of official interest and includes closeness of
relatives (like father – son). relatives (like father – son).
Director not to participate in some
Director not to participate in some
meetings (sec. 300)
meetings (sec. 300)
A director cannot participate in a meeting in A director cannot participate in a meeting in which a
which a matter matter / / contract contract related to related to his ihis issue /ssue / in
Office of profit Sec. 314
Office of profit Sec. 314
Director / his relatives cannot hold an office of Director / his relatives cannot hold an office of
profit having remuneration of Rs. 10000 or profit having remuneration of Rs. 10000 or more per month – without special resolution. more per month – without special resolution.
Any firm / company in which director is a Any firm / company in which director is a partner / owner also cant hold a place of profit partner / owner also cant hold a place of profit
Restriction on the powers of the
Restriction on the powers of the
board
board
Sec. 293 restricts the powers of the board : it Sec. 293 restricts the powers of the board : it cant remit loan due to director or his firm, it cant remit loan due to director or his firm, it cant invest compensation received otherwise cant invest compensation received otherwise than as per law, it cant dive charity of more than as per law, it cant dive charity of more than
than 5% 5% of of profit profit (or (or 50000) 50000) it it cant cant borrowborrow more than equity + reserves without
more than equity + reserves without permission.
Can the directors keep accounts in
Can the directors keep accounts in
other places than registered
other places than registered
office?
office?
Yes – the board of directors have to take a Yes – the board of directors have to take a decision and communicate it in 7 days to ROC decision and communicate it in 7 days to ROC
(registrar of companies) in form23 AA. (registrar of companies) in form23 AA. It can keep its accounts of branch offices at It can keep its accounts of branch offices at branch office – but a summarised report should branch office – but a summarised report should be sent to the registered office at intervals of 3 be sent to the registered office at intervals of 3
Can a director inspect any book of
Can a director inspect any book of
accounts?
accounts?
Yes
How long should the directors
How long should the directors
keep the books of accounts
keep the books of accounts
preserved?
preserved?
For 8 years. For 8 years.
How should directors get the
How should directors get the
accounts and reports approved
accounts and reports approved
from shareholders?
from shareholders?
Within 6 months of date of closure of financial Within 6 months of date of closure of financial
year,it must be adopted by AGM as per sec. year,it must be adopted by AGM as per sec.
210 210
financial year can be extended upto 15 months financial year can be extended upto 15 months and with permission of ROC, upto 18 months. and with permission of ROC, upto 18 months.
Signing of annual accounts
Signing of annual accounts
Annual accounts must be signed by 2 Annual accounts must be signed by 2
direcotrs / manager / secretary direcotrs / manager / secretary if you have MD, he must sign it. if you have MD, he must sign it.
Sec. 216 : P & L as per format must be Sec. 216 : P & L as per format must be
attached with balance sheet. attached with balance sheet.
Sec. 217 : board of director must add his report Sec. 217 : board of director must add his report
THANKS....
THANKS....
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