173 (1):

First Board Meeting

Minimum Number of Meetings

Interval between two consecutive board meetings

Exemption by notifications
173 (2):

Means of Participation of Directors in a
meeting

Matters shall not be dealt in a meeting
through video conference-

Requirements and Procedures under draft Rules:
1.
Whether attending Board Meeting in person is
mandatory.
2.
Notice of meeting shall be sent to all the directors
3.
Notice shall contain the option to attend Board
Meeting.
Continued……
Continued……
4.
Whether Director (s) opting to
through video conference is/are
confirm.
participating
required to
5.
Which is the place of Board Meeting.
6.
At the end of the meeting the summary of the
meeting proceedings shall be announced along
with the names of Directors who have
assented/dissented the from decisions
Continued……
7.
Whether Draft minutes to be circulated among all
the Directors?
8.
Whether all Directors have right to comment on the
drat minutes ?
173 (3):

Notice period of Board Meeting.

Mode of issuing of notice
173 (3):
 Shorter Notice to consider urgent business.
173(4):

Default in giving notice, every officer liable to a
penalty of Rs. 25,000/-
173 (5):


One Person Company, Small Company and
Dormant Company.
Where there is only one director in OPC.
174 (1):

Quorum for meetings of the Board
174 (2):

If the number is reduced below the quorum.
174 (3):

Interested Directors for the purpose of
quorum:
If the number of interested Directors is equal
to/ more than 2/3rd of total strength of the
Board.
174 (4):
 Adjourning the Board Meeting for want of
Quorum:

Explanation:
1. Any fraction of a number shall be rounded off as One
2. Total strength does not include directors whose places
are vacant
175 (1):

Conditions for passing resolutions by circulation
1.
resolutions has to be circulated in draft, together with
necessary papers, if any.
2.
Circulate to all the Directors, or members of the
committee, as the case may be.
3.
Circulate at the address of the Directors registered with
the Company in India
4.
Circulate by hand delivery or by post or by courier, or
through such electronic means which may include email or Fax prescribed in the draft rules.
Continued……
Continued….
5. Resolutions circulated have to be approved by a
majority of the Directors
6.
Can Director say the matter/motion under
circulation be decided at Board Meeting.
175 (2):
 Whether resolutions passed by circulation should be
taken note by the Board ?
176:

Any act done by a person as a Director shall not be
invalid till it is discovered that his appointment is
invalid/defective.
177 (1):

Criteria for constituting Audit Committee
 Every listed Company
 Every other Public Company having:

Paid up capital of Rupees One Hundred Crore
or more; or

Aggregate outstanding loans or borrowings or
debentures or deposits exceeding Rupees Two
Hundred Crore.
177 (2):

Composition
 Consist of 3 Directors with majority of
independent directors.

Qualifications of members
 Majority
of members including its
Chairman shall be persons with ability to
read and understand the financial
statement.
177 (3):

Transitional
period
reconstitution
for
constitution/
- One year from the date of commencement of
Companies Act, 2013
177 (4):
 Duties/Powers/Responsibilities
1.
Recommendation for appointment, reappointment
appointment of Auditor.
2.
Review and monitor auditor’s independence and
performance of Audit Process.
3.
Examining
report.
4.
Approval of related party transaction.
Financial
Statement
and
Auditors’
Continued…..
Continued……
5.
Scrutiny of inter corporate loans and investments.
6.
Valuation of
Company.
7.
Valuation of internal financial control and risk
management systems.
8.
Monitoring the end use of funds raised through
public and related matters.
undertakings
and
assets
of
the
177 (5):
 Audit Committee may call for comments of the
auditors about scope of audit, financial statements,
internal and statutory auditors and management of
the company.
177 (6):
 The Audit Committee shall have the power:
1. to investigate matters specified in section 177 (4)
2. to obtain professional advise from external source
3. to have access to records of the Company
177 (7):

Auditors and KMP shall have right to be herd in the
meeting of the Audit Committee but shall not have
the right to vote.
177 (8):
 Disclosure in Board’s Report shall be made:


The constitution of the Audit Committee,
If not constituted, the same shall be disclosed with
reason thereof.
177 (9):

Vigil Mechanism shall be established for directors
and employees.

Criteria:
1. Every listed Company
2. Companies which accept deposits from the public
3. Companies which have borrowed money from
banks and public financial institutions in excess
of Rupees Fifty Crore
177 (10):
 Purpose:
 To provide for adequate
victimization of persons.


safeguards
against
To make provision for direct access to the
Chairperson of the Audit Committee.
Constituting Vigil Mechanism shall be disclosed in the
website of the Company and in the Board’s Report.
178(1): Nomination and remuneration committee

Criteria:
- Every listed Company and such other classes of
companies as may be prescribed.

Constitution:
- 3 or more non-executive directors out of which not
less than half shall be independent directors.

Chairperson of the Company may be appointed as
the member of the Nomination and remuneration
committee but shall not chair such committee.
178 (2), (3) & (5):
Duties/ Powers:
1. Identify persons who are qualified to become
directors

2. Recommend to the Board for appointment or
removal
3. Carry out the
performance.
evaluation
of
every
Director’s
4. Formulating criteria for determining qualifications,
and independence of directors.
Continued…..
Continued…..
1. Recommend to the Board a policy relating to the
remuneration for the Directors, KMP and other
employees.
2. Such remuneration policy shall be disclosed in the
Board’s report.
178 (5): Stakeholders Relationship Committee

Criteria:
Company having more than 1000 share holders,
debenture holders, deposit holders and any other
security holder at any time during the financial
year.

Members :
Chairperson shall be non- executive director
Other members as may be decided buy the Board


178 (6):
Purpose:
- To consider and resolve the
holders of the company.

grievances of stake
178 (7):

Attending General Meeting:
- The Chairperson of each committee / any member
of the committee authorized by him in this behalf
shall attend the general meeting of the Company.
179(1): Scope of the Board
-
Entitled to exercise all such powers and to do all
such acts, things, as the company is exercise and do.
-
No such powers shall be exercised by the Board
which are to be exercised by the Company in general
meeting
179 (3):

Powers to be exercised at Board Meeting:
1.
2.
3.
4.
5.
To make calls on shares in respect of unpaid shares
To authorize buy back of securities under Section
68
To issue securities in or outside India
To borrow monies
To invest the funds of the Company
Continued……
Continued……
8.
To grant/give loan/guarantee/securities for any
loan
To approve financial statement and Board’s report
To diversify business of the Company
9.
To approve amalgamation, merger / reconstruction
6.
7.
To Take over a Company/acquire a controlling or
substantial stake in another company
11. Any other matter which may prescribed.
10.

1.
2.
3.
4.
5.
6.
Powers to be exercised at Board Meeting [As per
draft Rules for Chapter XII]:
To make political contributions
To fill a casual vacancy in the Board
To enter into a joint venture /technical or financial
collaboration
To commence a new business
To shift the location of a plant or factory or the
registered office
To appoint or remove (KMP) and senior management
personnel one level below the KMP
Continued….
Continued….
7. To appoint internal auditors
8. To adopt common seal
9. To take note of the disclosure of director’s interest
and shareholding
10. To sell investments held, constituting 5 % or more of
the paid – up share capital and free reserves of the
investee company
11. To accept public deposits and related matters
12. To approve quarterly, half yearly and annual
financial statements

Delegation of powers:
The Board may, by passing resolutions, delegate its
power to any committee or the managing director or
the manager or any other principal officer of the
Company; the following powers:

To borrow monies
To Invest Funds of the company
To Grant loan/give guarantee/ Provide securities in
respect of loans



Powers to be exercised only with the consent of
the Company by Special Resolution:
1.
To sell, lease or otherwise dispose off the whole or
substantially whole of undertakings of the
company.
2.
To invest otherwise in trust securities the amount
of compensation received it out of merger or
amalgamation
Continued…….
Continued…….
3.
To borrow money, where money to be borrowed,
together with the money already borrowed will
exceed the aggregate of paid up capital and free
reserves.
4.
To remit or give time for the repayment of any
debt due from a director.

Conditions, limits, particulars of the powers to be exercised
by the Board to be stipulated in special resolution.

Debt incurred by the Company in excess of the limit
prescribed, shall be invalid, unless the lender proves that
he has acted in a good faith.

Section 180 is now applicable to all the companies.
181:
 Board may contribute to bona fide charitable and
other funds.

If aggregate amount exceed 5% of its average net
profits for the 3 immediately preceding the financial
years, prior approval of the Company in general
meeting is required for contribution under this
section.
182 (1):
Criteria:
A company other than:



a Government company and
a company which has been in existence for less than
3 financial years
may contribute any amount, directly or indirectly, to
any political party.
182 (1):
Limit:
- not exceeding 7.5% of average net profit during the 3
preceding financial years.


Prior approval of the Board is required for authorizing
to make contribution under this section.
182 (3) & (4):
 Disclosure in Profit and loss Account:
 Total amount contributed
 Name of the political party
182 :
 Points of noting:
- Contribution to any person for political purpose is not
allowed.
- For the purpose of this section, “political Party” means a
political party registered under Section 29A of the
Representation of the People Act, 1951
183 (1): power of the Board
 The Board of directors may contribute such amount
as it deem fit to the National Defense Fund or any
other fund approved by the Central Government for
defense.
183 (2): Disclosure
 The total amount contributed under this Section
shall be disclosed in profit and Loss account.
184 (1):
 Every Director shall:

At his first meeting of the Board in which he participate; and

At the first meeting of the Board in every financial year; or

wherever there is change in the disclosure already made, at the
first meeting after such change;
disclose his concern/interest in any other Company/Body
corporate/firms/other association of individuals, by giving notice
in writing in Form No. 12.1.

Notices received by Directors under this Section shall be
preserved and kept at the registered for 8 years as per the draft
Rules.
184 (2):
 Disclosure
of
arrangement:
interest/
concern
in
contract/
Every interested Director shall disclose the nature of
interest/concern in any contract/arrangement, entered
or to be entered with:

A body corporate in which such director/ in association
with any other director holds more than 2% shares/ is a
promoter/manager/ CEO of that body corporate

A firm or other entity in which such director is a
partner / owner / member.
184 (2):

The interested director shall not attend the Board
meeting in which the contract in which he is
interested is to be considered.

If the directors becomes interested after entering in to
contract/arrangement, the same shall be disclosed
forthwith.
184 (3):
 Voidable Contracts:
A contracted entered in to by the Company without
disclosure under this section or with participation of
interested director shall be voidable
184 (4):
 Contravention and Penalty
Director in default shall be punishable with
imprisonment for a period of 1 year or a fine of Rs.
50,000 to Rs. 1 Lakh or with both.
184 (5): Between two companies-Exempt if 2% or
less of paid-up capital held by Director(s)
185 (1):
 No Company shall give loan, provide security/
guarantee / for its director or any other person in
whom the director is interested.

This provision shall not apply to:

Giving any loan to MD/WTD as part of the conditions of
service applicable to employees or pursuant to
shareholders approval by special resolution.

In ordinary course of business, giving loan/ providing
guarantee/securities for the due repayment of any loan
for which interest is charged at a rate not less than
Bank rate declared by RBI.
185 (2):
 Contravention and penalty:
- Company: punishable with Rs.5 Lakh to 25 Lakh
-
Director/Person in default: punishable with
imprisonment of 6 months or with fine of Rs.5 lakh
to 25 lakh or with both.

Other Aspects/New Aspects:

Provisions of this Section is applicable to both
private company as well as public company.

The requirement of permission of Central
Government for giving loan to Director as required
under the Companies Act, 1956 has been dispensed
with.

The exemption given to loan/guarantee/security
granted or provided by any Holding Company to its
Subsidiary or the exemption given to Private
Company has been dispensed with.
186 (1):

A company can make investment through not more
than 2 layers of investment companies.

Acquiring a company incorporate outside India and
such company has investment subsidiaries beyond
two layers as per laws of its home country.
A subsidiary company having any investment
subsidiary for meeting statutory requirements.

186 (2):
 Limit:
A company shall not:
Give loan to any person/body corporate;
 Give any guarantee/provide security in connection
with any loan to any body corporate; and
 Acquire by way of subscription, purchase or
otherwise, the securities of other body corporate;

exceeding 60% of paid capital, free reserves and
security premium account or 100% of free reserves and
security premium account whichever is more
186 (3): Providing Loan etc., exceeding limit:
Prior approval (Special resolution) at general meeting is
required.
186 (4): Disclosure:
Disclosure in financial statements to be made about the
loan/guarantee/security given.
186 (5): Unanimous Consent and Prior Approval:
Unanimous consent of the Board and Prior approval of
the public financial corporation is required for providing
loan/guarantee/security under this section.
186 (6):
 Following Companies shall not take inter-corporate loan or
deposits exceeding the limit as may be prescribed:
Companies registered under SEBI Act, 1992
 Such companies as may be notified by the Government

186 (7) & (8):
 Loan can’t be given at a rate of interest lower than
prevailing yield of 1 year, 3 year, 5 year or 10 year
Government Security closest to the tenor of the loan

Company defaulting in payment of any deposit or interest
thereon,
can
not
give
or
provide
any
loan/Security/Guarantee.
186 (9) & (10):

Company giving loan / guarantee or providing security
or making an acquisition under this section shall
maintain register in Form No. 12.2.

Entries to be made in registers with particulars of
loans and guarantees given, securities provided.

Entries to be made in chronologically within 7 days of
making loans/guarantees/securities or acquisition.
Continued……
Continued….

Register shall be kept in the registered office of the
Company and entries in the registers shall be
authenticated by the Secretary of the Company or any
other authorized person by the Board.

The register shall be kept open to inspection; and

Extract and copies of register to be furnished to any
members of the company on furnishing the fee as
mentioned in the Articles of the Company which shall
not exceed Rs.10 per page
186 (13):

Contravention and Penalty

Company: punishable with fine not less than
Rs. 25, 000/- but may extend to Rs. 5,00,000/-

Every officer in default: punishable with
imprisonment for 2 years and fine not less than
Rs. 25, 000/- but may extend to Rs. 1,00,000/-

Other Aspects/New Aspects:

Any intermediary associated with capital market can not
take inter corporate loan, deposits exceeding the limit as
may be prescribed.

Exemption to NBFC whose business is acquisition of
shares and securities.

While considering limits for making
investment,
providing loan/guarantee/security, the investment,
loan, guarantee, security already provide shall not be
considered.

Other Aspects/New Aspects:
The exemption given to following from under
Companies Act, 1956 has been dispensed with:
 Private Company;
 Acquisition by holding company the securities of its
wholly owned subsidiary;
 Loan made by holding company to its wholly owned
subsidiary; and
 To any guarantee/ security provided by a holding
company in respect of any loan made to its wholly
owned subsidiary.
the
187:
 All investments made or held by a Company in any
property, security or other asset shall be held in its
own name.

The Company may hold any shares in its subsidiary
company in the name of any nominee of the
Company, if required to meet statutory requirement.

Particulars to be mentioned in the Register in Form
No. 12.3, where the securities are held in any other
name in terms of this Section along with the
reasons for such holdings.
187:
 Contravention and Penalty
- Company: punishable with fine not less than
Rs.25,000/- but may extend to Rs.25 Lakh
- Officer in default: punishable with imprisonment of
6 moths or with fine not less than Rs.25,000/- but
may extend to Rs.1,00,000/- or with both.
188 (1):
 Approval of the Board by passing resolution at the meeting
is required to enter into contract with related party with
respect to :







Sale/purchase/supply of any goods or materials;
Selling/otherwise disposing of, buying property of any kind
Leasing of property of any kind;
Availing/rendering of any services;
Appointment of any agent for purchase/sale of
goods/services/property;
Underwriting the subscription of any securities of the
Company;
Related party’s appointment to any office or place of profit.
188 (1):
Conditions to be satisfied as per draft Rules:
 Notice calling for meeting of the board shall disclose:






Name of the related party, nature of relationship
Nature, duration, particulars of the contract
Material terms of contract including value, if any
Any advance paid/received for the contract
Any other information relevant for the Board to take
decision
The interested director shall not present at the
meeting during discussion of agreement as
mentioned in this section.
Conditions and limits as prescribed under draft rules
for Certain contracts with related Parties:

Company having paid up share capital of Rs. 1.00
Crore
or
more
shall
not
enter
into
contract/arrangement with any related party; or

Company shall not enter in to any transactions where
the transactions to be entered into
a)
Taken together with previous transactions during the
financial year, exceeds 5% of the annual turnover or
20% of the net worth of the company as per last
audited financials, whichever is higher ; or
Continued……
Continued….
b)
Relates to appointment to any office or place of profit in
the Company, its subsidiary company or associate
company at a monthly remuneration exceeding Rupees
One Lakh; or
c)
For a remuneration for underwriting the subscription of
any securities/derivatives thereof of the company
exceeding Rupees Ten Lakh.
except with the prior approval of the Company by a Special
Resolution.
continued…….

Member shall not vote on such special resolution, to
approve any contract to be entered by the Company,
if he is a related party thereon.

The provisions of this section shall not apply to any
transactions entered in ordinary course of business ,
other than transactions which are not at arm’s
length Price.

Every contract entered in under this section shall be
disclosed at the Board’s report.
188 (5):
 Ratification:
Contract entered in to by the director/employee with out prior
approval by the Board/ approval by the Shareholder and if the
same is not ratified by the Board/Share holders within 3 months
from the date of entering in to contracts, such contracts shall be
voidable at the option of the Board
Contravention and Penalty
 Contravening director of a listed Company: imprisonment
for a term of 1 year or fine not less than Rs.25,000/- which
may extend to Rs. 5,00,000 or with both.
 Contravening director of other Company: fine not less than
Rs.25,000/- which may extend to Rs. 5,00,000.

189:
 Every Company shall maintain one or two registers in
Form No. 12.4 and shall enter the particulars of:
Companies/body corporate/ firms in which the directors
are interested.
 Contracts/arrangements with a body corporate of firm or
other entity in which any director is interested.
 Contract, Arrangements entered with a related party.


Extract of registers shall be provided to any member
within 7 days from the request there on upon the payment
of such fee as prescribed in the Articles of the Company
but not exceeding Rs. 10 per page.
189:
 Registers to be kept open for inspection at the
registered office of the Company.

The registers shall be produced at the Annual general
Meeting and shall remain accessible during the
continuance of the meeting.
189:
 The provisions shall not apply to any contract/
arrangement –
For the sale/purchase/supply of goods, materials or
services, if the value of such goods and materials or
the cost of such goods in aggregate does not exceed
Rs. 5.00 Lakh per year.
 By a banking company for the collection of bills in the
ordinary course of business.


Contravention and Penalty
Every Director contravening the section and the rules
there under shall be liable to a penalty of Rs.25,000/-
190:
 Every Company shall keep at its registered office;

A copy of contract with a Managing Director/
Whole time Director (if it is in writing); or

A written memorandum setting out terms of
contract with Managing Director/ Whole time
Director (if it is not in writing)
190:
 Copy of contract/ memorandum shall be kept open
for inspection by any member without payment of fee
Contravention and Penalty
- Company: shall be liable to penalty of Rs. 25,000/- Officer in default: shall be liable to a penalty of
Rs. 5,000/- for each default.


Provision shall not apply to private Company
192:
 A Company shall not enter into any arrangement
by which a Director of the company or of its
Holding Company or any person connected with
him can acquire assets for the consideration other
than cash from the Company & vice versa without
the
prior approval of Company in General
Meeting.

Where the Director/ connected person is a director
of its holding company, then resolution from
Holding Company will also be required.
192:
 The notice for approval in general meeting under
this section, from both the Companies ( holding
and subsidiary), shall include particulars of the
arrangement along with the value of asset duly
calculated by Registered Valuer.
193:
 Where One person Company enters in to contract
with the sole member who is also director of the
company, unless the contract is in writing, the terms
of the contracts;


are contained in the Memorandum; or
are recorded in the minutes of the first Board
Meeting held after entering in to contract
193:

Every contract entered in to by the Company under
this section shall be intimated to the Registrar of
Companies within 15 days of its approval by the
Board
194:
 Prohibition forward dealing in securities of the
company by Director/KMP
195:

No Director/KMP of a company shall involve in
insider trading of securities of the Company.
Thank you