Wednesday 25 January 2012

CHECKLIST FOR COMPANIES ACT 1956



SUBJECT/SECTION
DESCRIPTION OF DOCUMENT, RETURN, NOTICE ETC. TO BE FILED

 FORM

TIME WITHIN WHICH TO BE FILED

EFFECT OF FAILURE TO FILE
1.      
Alteration of MOA

Section 16, 17&18

Check that
(i)             In respect of alteration in object clause :
·         Alteration falls under any of the purposes specified in section 17(1)(a) to (g)
·         special resolution has been passed
(ii)            In respect of shifting of registered office from one state to another
·         Alteration falls under any of the purposes specified in section 17(1)(a) to (g)
·         special resolution has been passed
·         provisions of Company Law Board Regulations, 1991 regarding petition to the CLB had been complied with
·         the CLB has confirmed the alteration
·         the Registrar issued the certificate registering the alteration
·         any extension of time for filing the CLB order with the ROC was sought (Section 18(4) ) if so whether the documents filed within the extended period

(i)             Copy of Special resolution along with the copy of notice for General Meeting
(ii)            A certified copy of the CLB order confirming change of company’s objects together with a printed copy of the MOA as altered.
(i)             i)  Form21
(ii)            ii) Form 23
i)              30 days (One Month) from the date of passing of the resolution

ii)             3 months from the date of order or such further time as extended by the CLB



Alteration ineffective unless a copy of CLB order is filed with the ROC.
CLB’s order void and inoperative after the time allowed.( Section 19)
2.      
Alteration of AOA
Section 31
Check that:
·         Whether the articles of the company were altered? If so, whether a special resolution was passed
·         In case of conversion of a public company into private company an approval from the Registrar of Companies is required

Return for alteration in the AOA
Form 23
Within 30 days of passing of the resolution
Penalty/Late fees to be charged



3.      
Prohibition of allottment unless minimum subscription is received
Section 69
In case of first allottment, check before allottment whether:
·         the minimum subscription of 90% has been received
·         the amount payable on application on each share being not less than 5% of the nominal amount to be received
·         the same was deposited in a scheduled bank until certificate to commence business had been obtained
·         the above amount was received before the expiry of 120 days after the first issue of prospectus? If not, whether the amount was repaid to applicants within 130 days after the issue of prospectus
In case of subsequent allottment, check that
·         the amount payable on application on each share was not less than 5% of the nominal amount of the share




Fine upto Rs. 50,000/- for non –refund of allotment money. (Promoter, director and any other person is knowingly responsible)
4.      
Allottment of shares or debentures
Section 72
Check that:
·         If a prospectus was issued no allotment was made until the beginning of the 5th day after that on which the prospectus was first so issued or such later time as specified in the prospectus
·         Where a public notice was given u/s 62, no allottment was made until the beginning of the 5th day after such public notice




Every officer in default Rs. 50,000/-



5.      
Allottment of shares and debentures to be dealt in on stock exchange
Section 73
Check whether:
·         the prospectus contained a statement to the effect that an application had been made/ would be made to one or more recognised stock exchange for listing
·         If so, the names of stock exchange(s) was/were specified in the prospectus
·         such application was made along with the documents and particulars specified in Rule 19 of the Securities Contracts (Regulations) Rules, 1957, before the 10th after the first issue of prospectus 
·         permission was obtained from stock exchange(s) before the expiry of 10 weeks from the date the of closing of subscription lists
·         any appeal was made against the refusal to list the shares
·         the company has repaid the amount received from applicants within 8 days after the expiry of the prescribed period, if no application was made or permission was not obtained or the appeal was dismissed
·         the application money received in excess was repaid within 8 days of the company becoming liable to repay
·         the moneys received were kept in a separate bank account
·         such money was not used for purposes other than those mentioned in subsection (3A)




Company & every director in default
Interest Rate 4% -15%



6.      
Return of allotment
Section 75
Check that
·         The Return is not required if it is reissue of forfeited shares.
Return of Allotment
(i)In case of bonus shares stating the number and nominal amount of shares and names, addresses and occupation of allottees together with a copy of the resolution authorising the issue.
(ii) In  the case of shares allotted otherwise than in cash together with the verified copies of the contracts constituting the title of the allottees together with contract of sale or contract of service or other consideration in respect of which allotment was made and a return stating the number and nominal amount of shares, the paid-up value to be deemed and the consideration for which they are allotted.
(iii) In the case of shares issued at discount, together with a copy of resolution authorising the issue, a copy of the CLB’s order sanctioning the issue and the order of the Central Govt. permitting the issue at a discount higher than 10 per cent.
Form  2
30 days after allotment.
Every officer in default punishable with fine upto Rs.5000 per day (extend upto Rs. 50,000/- of default for not filling the Form 2



7.      
Shares (not being bonus shares) allotted for consideration other than in cash
Section 75(2)

Particulars of contract relating to shares otherwise than in cash where the contract is not reduced to writing.
Form No. 3
30 days after allotment.
Every officer in default punishable with fine upto Rs.5,000 per day of default;
8.      
Power to pay certain commission etc.

Section 76

Check whether
·         such payment authorised by AOA
·         Rate does not exceed the rate authorised by the AOA or 5%/2.5% of the price at which shares/debentures  issued whichever is less
·         The payment of commission and number of shares/debentures agreed to be subscribed were disclosed in the prospectus/statement in lieu of prospectus/circular, as the case may be
i) A statement of amount or rate (per cent) of the commission payable for underwriting share/ debenture where these are not offered to the public.
ii) A copy of contract for the payment of underwriting commission.

Form 4
i) Before the payment of commission.
ii)At the time of registration of a prospectus or statement in lieu of prospectus
The company and every officer in default punishable with fine upto Rs.5,000.
9.      
Certificate of shares
Section 84
Check whether:
·         the company had issued/renewed share certificate and maintained proper records of certificates issued etc., in accordance with The Companies (Issue of Share Certificates) Rules, 1960



If the intent to defraud renew a share certificate then fine for co Rs. 1 Lakh & every officer in default fine upto Rs. 1 Lakh and imprisonment upto 6 months



10.   
Calls on shares of same class of shares to be made on uniform basis.

Section 91

Check whether
·         any calls made during the year
·         calls made on uniform basis
·         calls made by resolution passed at the board meeting








11.  r
Power of limited company to alter its share capital
Section 94
Check that the alteration, if authorised by its articles, had been made in any of the following ways:
·         increasing its share capital by issuing new shares
·         consolidate or divide all or any of its share capital into shares of larger amount
·         conversion of shares into stock or vice versa
·         sub-divide its shares into shares of smaller amount than fixed by the memorandum
·         cancel the shares not taken by any person  at the date of passing of resolution and diminishing the amount of the shares so cancelled
·         the powers conferred above had been exercised by the company in its general meeting
Relevant forms to be filed with ROC are specified u/s 97



12.   
Notice to Registrar of Consolidation of shares, conversion of shares into stock
Section  95(1)
Notice of consolidation of shares, conversion of shares into stock, reconversion into shares, sub-division of shares, redemption of redeemable preference shares or cancellation of shares.
Form 5
30 days of doing so.
The company and every officer in default punishable with fine upto Rs.500 per day of default.
13.   
Notice to Registrar of Increase in share capital or the number of members Section 97(1)




Notice of increase of share capital (a company having share capital) and the number of members (a company other than one limited by shares).
Form 5
30 days of passing the resolution for increase.
The company and every officer in default punishable with fine upto Rs.500 per day of default.



14.  Tr
Transfer not to be registered except on production of Instrument of transfer

Section 108

Ensure that:
·         instrument received for transfer in Form 7B was duly executed and stamped
·         delivery within the validity period
a)     in case of quoted shares, the date on which register of members is closed, for the first time after presentation or within 12 months of such presentation, whichever is later
b)    in any other case within 2 months
·         signature of the transferor  agreed with the specimen signature filed with the company
·         the shares were not subjected to any lien unless permitted by articles
·         the power of attorney if any, under which an instrument was executed, was in order.
·         The stamps affixed on the instrument had been duly cancelled in accordance with the Stamps Act





15.   
Transfer by legal representative

Section 109

Ensure whether the following have been obtained:
·         succession certificate or probate or letter of administration and in case of small holdings,  indemnity bond or affidavit on non-judicial stamp paper
·         certified copy of death certificate
·         specimen signature of the successors to the shares








16.   
Application for transfer
Section 110
Check that:
·         the application can be made by either the transferor or the transferee
·         in case the application has been made by the transferor to transfer partly paid up shares the transfer shall not be registered, unless the company has given notice of transfer to the transferee and the transferee has given a no objection to the same within 2 weeks of receipt of notice





17.   
Power to refuse registration and appeal against refusal

Section 111

Check whether :
·         such refusal was permissible under AOA
·         notice of refusal was sent to both the parties within 2 months of receipt of instrument of transfer or to the person giving intimation of transmission
·         reasons for such refusal given
·         any appeal was made against such refusal to the Tribunal
·         order of the Tribunal complied with

Where an order was made by the Tribunal the notice of order to be given to the Registrar
Form 21

Co and every officer in default Rs. 10000 & Rs. 1000/- per day till default contines

18.  icates
Limitation of time for issue of certificates

Section 113

Check that
·         In case of allotment
a)     whether certificates kept ready for delivery within 3 months of allottment
b)    The Board Committee resolution passed to issue share certificate
c)     The share certificates were in the form and manner as required under the Companies (Issue of Share Certificates) Rules, 1960
d)    suitable entries made in relevant register
·         In case of transfer, check whether:
a)     certificates kept ready for delivery within of 2 months of application therefor

b)    The Board Committee resolution passed to issue share certificate
c)     The share certificates were in the form and manner as required under the Companies (Issue of Share Certificates) Rules, 1960
d)    suitable entries made in relevant register




Penalty Rs. 5000 per day
19.   

Particulars of charges and registration thereof
Section 125(1)
Check whether :
·         If the charge created fall into any one of the categories of registerable charges u/s 125(4)
Particulars of charges together with the instrument, if any, creating or evidencing the charge.
Forms 8 and 13 
30 days of creation of a charge.
The company and every officer in default punishable with fine upto Rs.5000 per day of default- the charge would become void against liquidator or creditor.
20.   
Registration of charges on properties acquired subject to charge
Section 127(1)
Check whether:
In case of property acquired by a company subject to a charge which is required to be registered u/s 125(4), the company has registered it
Particulars of charges together with a certified copy of the instrument creating a charge in respect of the property acquired by a company subject to charge.





Forms 8 and 13 
30 days of acquisition or 30 days of receipt of copy of the instrument, if the property is situated outside India and charge is created there.
The company and every officer in default punishable with fine upto Rs.5000
21.   
Particulars in case of series of debentures entitling holders pari passu and registration thereof

Section 128

Check whether:
·         Any charge has been created to secure a series of debentures registrable u/s 125(4)
(iii)           Particulars of the total amount secured by the whole series, date of resolutions authorising the issue of the series, date of debenture trust deed, general description of the properly charged, names of trustees for debenture holders.
(iv)           
Forms 10 and 13
30 days of execution of deed or debentures as the case may be
The company and every officer in default punishable with fine upto Rs.5000 per day of default- the charge would become void against liquidator or creditor.
22.   
Particulars in case of commission etc. on debentures

Section 129

Check whether:
Any commission, discount or allowance has been paid to any person for subscribing or procuring or agreeing to subscribe or procure any debenture
Particulars of commission, discount or allowance for underwriting debentures.
Form 10
Along with particulars to be registered under sections 125 and 128
The company and every officer in default punishable with fine upto Rs.5000 per day of default- the charge would become void against liquidator or creditor.










23.   
Modification of charges

Section 135

Check whether:
·         Any terms or conditions or the extent of operations of any charge registered u/s 125 are or is modified

 

Particulars of modification of charges as to terms and conditions or extent or operation of charge.
Forms 8 and 13
30 days of modification
The company and every officer in default punishable with fine upto Rs.500 per day of default- the charge would become void against liquidator or creditor.
24.   
Instrument creating charge to be kept at the registered office

Section 136

Check whether :
·         A copy of instrument creating or modifying charge/s, a copy of debentures of the series, if any, required to be registered, has been kept at the registered office.





25.   
Satisfaction of charge
Section 138(1)
Check whether:
·         company has made payment or satisfied in full any registered charge
Intimation as to payment or satisfaction of charge
Forms 17 and 13
30 days from the day of payment or satisfaction.
The company and every officer in default punishable with fine upto Rs.500 per day of default – the charge would become void against liquidator creditor

26.   
Rectification by Central Govt. of register of charges

Section 141

Check whether:
·         Company has made any delay/omission /misstatement in filing particulars of charge created/modified, or issue of debentures of a series or intimation of satisfaction of charge to Registrar








27.   
Notice of company's registered office
Section 146
Check whether:
I.      In case of new company it has a registered office within 30 days of incorporation or from the day of its carrying on business whichever is earlier
II.    In case of any change in situation of registered office
·         within local limits of city, town or village, board resolution was passed
·         outside the local limits of city, town or village, special resolution was passed in general meeting and provisions of section 17 & 18 complied with

Notice of situation of company’s registered office and any change of situation.
Form 18
and Form 23, if special resolution is passed
30 days of incorporation or change as the case may be.
The company and every officer in default punishable with fine upto Rs.500 per day of default.
28.   
Right to Inspect copies of instrument creating Charges & Co’s Register of Charges
Section 144
Section 136 & sec 143 – Books are open for inspection at least 2 hours in business days on payment of fees




The company and every officer in default punishable with fine With Rs. 500 & further fine Rs.200 per day of refusal continies
29.   
Restriction on commencement of business
Section 149(1)&(2)
Check whether:
Where the company having a share capital has issued a prospectus
·         it has allotted shares of an amount equal to the minimum subscription after filing prospectus with ROC
·         application and allottment money from the directors on the shares taken or contracted to be taken by them has been collected
·         permission from the stock exchanges, where shares are proposed to be listed has been obtained and the application money does not become refundable
·         certificate of commencement of business has been obtained from ROC

I.      Verified declaration by a director or secretary or where a company has not appointed a secretary, a secretary in whole time practice, stating that provisions of section 149(1)(a), (b)& (c) with respect to commencement of business by a company having share capital which has not issued a prospectus, have been duly complied with.
II.     Verified declaration by a director or secretary or where a company has not appointed a secretary, a secretary in whole-time practice, stating that provisions of section 149(2)(b) with respect to commencement of business, by a company having share capital which has not issued a prospectus, have been duly complied with.

I.      Form 19
II.     Form 20
Before commencing business or exercising borrowing power.
Every person responsible for contravention punishable with fine upto Rs.5000 per day during which contravention continues.




Where the company having a share capital has not issued prospectus :
·         payment of application and allottment money in cash has been made by the directors
·         statement in lieu of prospectus prepared in accordance with Schedule III of the Companies Act, 1956 has been filed with ROC
·         No shares have been allotted for three days after filing of the statement in lieu of prospectus
certificate of commencement of business obtained from ROC





30.   
Restriction on commencement of business
Section 149(2A)
Check whether:
·         Company had commenced any business not falling under “main objects” or "other objects” clause of the memorandum and not germane to the business carried on 
·         If so, special resolution passed at the general meeting
·         If resolution was proposed as special but passed only by a simple majority, whether approval obtained from the Central Govt.(Section 149(2B))

Verified declaration by one of the directors or secretary or where the company has not appointed a secretary, a secretary in whole-time practice
Form 20A and 23
Before commencing new business.
Every person responsible for contravention punishable with fine upto Rs.500 per day during which contravention continues.
31.   
Register of members

Section 150

Check whether:
·         maintained properly specifying particulars about share holders and their shareholdings




Non – Maintainence Rs. 500 Per day

32.   
Index of members

Section 151

·         If the company has more than 50 members, check whether the company maintains an index of members








33.   
Annual Return to be made by a company having a share capital
Section 159
Check whether:
·         company has filed the Annual Return in prescribed form within the prescribed time

Annual return together with the statement specifying the reasons for not holding A.G.M. in case it is not held by the latest date.
Schedule V Part II

60 days from the date of A.G.M. or from the latest day on which it should have been held.
The company and every officer in default punishable with fine upto Rs.500 per day of default.
34.   
Annual Return to be made by a company not having a share capital
Section 160

Annual return should contain the particulars specified in sections 160(1)&(2)
Form 21A
60 days from the date of A.G.M. or from the latest day on which it should have been held.
The company and every officer in default punishable with fine upto Rs.500 per day of default.

35.   
Further provisions regarding annual return and certificate to be annexed

Section 161

Check whether:
·         Annual return duly signed by director and secretary
·         If no secretary, duly signed by 2 directors including managing director, if any
·         In case of a company whose shares are listed on stock exchange, whether Annual Return signed by secretary in whole-time practice
Certificates as required by section 161(2) signed by both the signatories of a return to be annexed thereto.

Along with annexed return
The company and every officer in default punishable with fine upto Rs.500 per day of default.
36.   
Place of keeping and inspection of registers and returns

Section 163

I.      To be kept at registered office
II.     If kept else where check whether:
·         authorised by a special resolution
·         resolution filed with the registrar within 30 days
·         registers etc. are preserved or destroyed according to companies (preservation and Disposal of Records) Rules, 1966
·         the register of documents destroyed has been  maintained
·         inspection was facilitated and copies sent on requisition within ten days

Form 23
30 days from the date of passing of resolution




37.   
Statutory report
Section 165(1)
Check whether:
·         The statutory meeting held within 6 months after one month from the date the company was entitled to commence business
·         The delay in holding the statutory meeting by shorter notice was condoned unanimously by members entitled to attend and vote at the meeting if the report was sent less than 21 days before the meeting

Certified copy of the statutory report
Form 22
Forthwith after copies of the report have been sent to the members
Every director or officer in default punishable with fine upto Rs.500
38.   
Quorum for meeting of members

Section 174

Public company - 5 members
Private company - 2 members
(or more members if so prescribed by the AOA)
If within half an hour the quorum was not present, check whether:
·         it was dissolved, if the meeting convened upon the requisition of members
·         it was adjourned in any other case for next week to the same day, time and place or as determined by the Board
If   If no quorum was present at the adjourned meeting within half an hour, check if the meeting was held with the members present





39.   
Chairman of the meeting of members

Section 175

Check whether:
·         provisions of AOA followed
·         chairman was elected from among the members personally present in the first instance on a show of hands
If a I  If a poll was demanded, on the election of chairman whether it was taken forthwith by the chairman elected on a show of hands








40.  
On becoming beneficial owner of shares in the company
Section 187-C
Where the company has received a declaration in Form I and/ or Form II from ostensible owner and person having a beneficial interest in shares, check that:
·         the fact was noted in the register of members

Declaration by a company in Form III filed with ROC
Form I, II & III under the Companies (Declaration of beneficial interest in Shares) Rules, 1975
30 days of receipt by a company of such declaration
The company and every officer in default punishable with fine upto Rs.1000 per day of default.
41.  
Registration of certain resolutions and agreements
Section 192
Where a special resolution or a resolution in terms of section 192(4)(b) to (f) was passed. Check whether:
·         A copy filed with ROC
·         A copy of resolution which has the effect of altering the articles and agreement were embodied in or annexed to every copy of articles issued thereafter where articles have been registered
·         on a request by a member along with payment of Re.1, whether a printed copy of such resolution/ agreement/Articles was sent to the member

A printed or type-written and duly certified copy of every resolution and agreement specified in section 192(4) together with a copy the statement of material facts (Explanatory Statement) annexed as per section 173 to the notice of the meeting where resolution is passed.
Form 23
30 days from the date of passing the resolution for making the agreement.
The company and every officer in default punishable with fine upto Rs.200 per day of default.
42.
Minutes of proceedings of general body and other meetings

Section 193

Check whether:
·         minutes books properly maintained for Board, its committee and general meetings
·         the proceedings of each meeting entered in the register within 30 days of the meeting
·         the pages were consecutively numbered and each page of record of proceedings was initialled or signed and the last page of the record of proceedings was dated and signed:

i)      in case of general meeting by the chair man of same meeting within 30 days of the meeting and in the event of his death/inability by a director duly authorised by the board for this purpose









ii)in case of board meeting/its committee meeting, by the chairman of the same meeting or that of the succeeding board meeting
·         minutes of proceedings were not attached or pasted in the minutes book
·         minutes contained a fair and correct summary of the proceedings
·         cuttings/alterations were duly authenticated
·         appointments of officers, if any, made at any meeting had been recorded
In case of a board meeting check whether:
·         names of directors present mentioned
·         leave of absence granted was recorded names of directors dissenting from or not concurring in the resolution were recorded





43.
Overall maximum managerial remuneration and managerial remuneration in case of absence or inadequacy of profits

Section 198

Check whether:
·         overall managerial remuneration was within the limits of 11% of net profits of the company as computed in the manner laid down in sections 349, 350,and 351
·         In case of companies having no profits or inadequate profits, check whether managerial remuneration is paid in accordance with Section II of Schedule XIII. If not, whether the approval of the Central Government has been obtained.





44.
Restriction on appointment of firm or body to office or place of profit under a company

Section 204

Check that:
·         no firm or body corporate was appointed or employed in any office or place of profit under the company except as a trustee for the holder of debentures of the company for a period not exceeding five years at  a time







45.
Dividend to be paid only out of profits
Section 205
Check whether
·         Dividend was declared out of profits after providing for depreciation u/s 205(2). If no depreciation was provided, approval obtained from Central Govt. before declaring any dividend
·         The minimum prescribed amount had been transferred in reserves according to the Companies (Transfer of profits to reserves) Rules, 1975, before declaring any dividend
·         Conditions governing transfer of higher percentage complied with.
·         Board resolution recommending dividend was passed
·         Register of members was closed in accordance with Section 154
·         Dividend declared only in AGM
·         Dividend paid to registered holder within 42 days or to their order (Section 207)
·         In case of NRIs, approval of RBI obtained
·         In case of listed company, intimation sent to stock exchanges.




46.
Unpaid dividend
Section 205A
Check whether
·         Unpaid/Unclaimed dividend had been transferred to 'Unpaid dividend Account' to be opened with a scheduled bank within 7 days from the expiry of 42 days from the date of declaration of dividend
·         The amount of unclaimed/unpaid dividend had been transferred to General Revenue A/c of Govt. within 3 years from the date of transfer to the Unpaid Dividend A/c as per the Companies Unpaid Dividend (Transfer to the General Revenue A/c of the Central Govt.) Rules,1978
·         Statement of unpaid/unclaimed dividend filed with ROC

·         Shareholders of the company have been informed about the particulars of the unpaid dividend transferred to General revenue A/c of the Central Govt. either individually or along with the notice of next AGM of the company
 
Statement giving the particulars of unpaid/unclaimed dividend duly certified by a practicing CS, CA, CWA or the auditors of the company
Form I of the companies unpaid dividend (Transfer to General Reserve Account of Central Govt) Rules, 1978
30 days from the date of transfer
Every officer of the company in default shall be punishable with fine which may extend upto to Rs.5000 per day during which failure continues.
Interest 12% Pa to be paid to member of Co.

47.
Books of account to be kept by company
Section 209(1)
Check whether:
·         Books of account kept at the registered office
·         If not, whether board resolution passed
·         Ensure that the books of account are maintained on accrual basis and according to the double entry system of accounting
·         Books of account maintained in good order for a period of 8 years together with their vouchers, invoice and connected records
Notice of the address of the place other than registered office of the company if the board of the company decides to keep the company’s books of account at such place.
Form 23-AA
7 days of the decision taken by the board.
A person in default punishable with fine upto Rs.10000 or with imprisonment upto 6 months or with both.
48.
Financial year of holding company and subsidiary

Section 213

Check whether:
·         a board resolution was passed
·         any application was made to the Central Government under this section, for extension of financial year and to laying of relevant accounts at annual general meeting, holding of annual general meeting and filing of annual return
·         whether any instructions received from the Central Government




49.
Section 220
Check whether
·         Balance Sheet were adopted by AGM
·         Where the no AGM was held three copies of balance sheet along with a statement of reasons for not holding AGM were filed within 30 days from the latest day on which such meeting ought to have been held
·         In case of private company, balance sheet and profit and loss account filed separately

Three copies each of balance sheet and profit and loss account and other documents required to be attached or annexed to balance sheet.
-
30 days of A.G.M. at which these were laid or where A.G.M. not held on or before 30 days from latest day when A.G.M. should have been held.
The company and every officer in default punishable with fine upto Rs.500 per day of default. Penalty is provided as per Sec. 162 for default in complying with the provisions of Sec 159, 160 and 161.



50.
Appointment and remuneration of auditors

Section 224, 225&226

Check whether:
·         person appointed as auditors to be Chartered Accountant within the meaning of the Chartered Accountant's Act, 1949, and was not subject to any disqualification
·         auditors were appointed at the annual general meeting of the company and the remuneration was fixed, or, the manner in which it should be fixed, was determined
·             in the case of first auditors, they were appointed by the Board within one month of registration  of the company and the remuneration was fixed
·         certificate as to limits of audit was obtained from the auditors
·         if no auditor was appointed in the annual general meeting, a notice thereof was sent to the Regional Director in time (section 224A)
·         intimation of the appointment was sent to the auditors within 7 days thereof
Certificate by an auditor as to whether he has accepted or refused to accept appointment as an auditor.
Form 23 B
30 days from the date of receipt of intimation of appointment from the company.

51.
Audit of cost accounts in certain cases

Section 233B

Check whether:
·         the company was required to maintain cost records u/s 209(1)(d) read with Cost Accounting Record Rules
·         was there any order from Central Government to
      get a cost audit conducted
·         Board resolution appointing the qualified person
      as cost auditor
·         approval of the Central Government to appoint
      such person
·         within 30 days of receipt of a copy of the cost
      audit report, full information and explanations' 
      were submitted to the Central Government, on
     every reservation and qualification contained in
     such report

·         copy or part of the report was circulated to the
       members along with the notice of annual general
       meeting, if required by the Central Government




52.
Appointment of directors and proportion of those who are to retire by rotation
Section 255
In case of public company or its subsidiary check that:
·         the provisions of the articles require all the directors to retire at the annual general meeting or not less than 2/3rd of the total strength of the board was liable to retirement by rotation at such annual general meeting
·         such 2/3rd directors have been appointed at the annual general meeting




53.
Ascertainment of directors retiring by rotation and filling of vacancies

Section 256

Check whether:
·         the total number of directors liable to retire by rotation was calculated in the specified manner, and such directors retired





54.
Right of the company to increase or decrease the number of directors

Section 258

Check whether:
·         the increase was within the limits prescribed in the AOA
·         the increase or reduction was authorised by a resolution passed at the general meeting





55.
Increase in number to require Central
govt. approval

Section 259

Check whether:
·         the number of directors increased above the maximum permissible
·         AOA altered by passing special resolution
·         Notice u/s640B was published as specified in section 640B(2)(b) and attached to the application  
Application giving the prescribed particulars along with certified copies of MOA & AOA  along with resolutions
Forms 24 and 23





56.
Additional directors

Section260

check whether:
·         the appointment was made by the Board
·         the maximum strength fixed by the Board was not exceeded by appointment
·         the additional director hold office upto the date of next annual general meeting

Form 32
30 days from the date of appointment

57.
Filling of casual vacancies among directors

Section 262

Check whether:
·         the casual vacancy was duly filled up at a meeting of the board by passing a resolution at a board meeting
·         such person vacated the office on a date when the original director would have vacated

Form 32
30 days from the date of appointment

58.
Consent of candidate for directorship to be filed with the company and consent to act as a director to be filed with the Registrar
Section 264
Check whether
·         The consent of the candidate for directorship    u/s 257 was duly filed with the company
·         A director other than those specified has filed his consent to act as the director within 30 days of his appointment

Consent in writing to act as a director
Form 29
30 days from the date of appointment.
A director cannot act as such unless consent has been filed.
59.

Consent by the First Director
Section 266
Check whether:
·         Requisite consent of the director for being named in AOA, prospectus, statement in lieu of prospectus was obtained
·         Power of Attorney duly stamped was received, in case of an agent was appointed by the director
Consent in writing by the First director to act as a director together with an understanding to take and pay for qualification shares, if any, or an affidavit stating that such shares have already been registered in his name.
Form 29
Any time registration or publication of prospectus or filing a statement in lieu of prospectus as the case may be.
A director cannot act as such unless consent has been filed.



60.
Appointment/reappointment of managing or whole time director
Section 269 & Schedule XIII
Check whether:
·         In case of public company or subsidiary of the public company having a paid up capital of Rs.5 crores or more, Managing Director/Wholetime director/Manager is to be appointed
·         Board/General meeting resolution passed.
·         If the condition stipulated in Schedule XIII have been complied with, if not, whether the approval of the central government obtained for appointment/re-appointment of managing/whole-time director
·         the requirements of section 316 complied with if the managing director was also the managing director of another company.
·         A notice under section 640B was published as specified in section 640B(2)(b) and attached with the application, if Central Government approval required.
·         If the government had not approved the appointment, ensure that managing director etc. vacated his office immediately.

I.      Return of appointment of managing/ whole-time director/ manager.
II.     Application for approval of Central Govt.


I Form 25C
II Form 25A
Within 90 days from the date of appointment.
Appointment in contravention of Schedule XIII results in company liable to fine upto Rs.50000; any officer in default upto Rs.100000 and appointment of managing/whole-time director/manager comes to an end.
In addition appointee to be liable to a fine of Rs.100000 and to refund entire amount of salaries commission & perquisites received between date of appointment and passing of orders.
61.
No person to be a director of more than 20 companies.

Section 275

Check whether
·         Any of the directors of the company were holding directorships in more than 20 companies. (excluding the companies mentioned in section 278)




62.
Board to meet at least once in every three calendar months.

Section 285

Check whether
·         the requisite number of Board meetings during the year had been held







63.
Quorum for meetings of board of directors

Section 287

Check whether:
For every board meeting 1/3rd of its total strength or two directors whichever is higher was present (interested directors will not be counted for the purpose of quorum)





64.
General powers of the Board
Section 291
Check that:
·         Board did not act or do any thing which was required to be done by the company in general meeting
·         while exercising general powers, the board had followed the provisions of the Companies Act or any other act, or the MOA or AOA of the company or any other regulations duly made





65.
Certain powers to be exercised by board only at the meeting
Section 292
·         powers to make calls on shareholders, to issue debentures, to borrow moneys otherwise than on debentures, to invest the funds, to make loans were exercised only by means of resolution passed at the meeting of the board
·         resolutions regarding the powers given for  (i)borrowing money otherwise than on debentures (ii) investing funds (iii) making loans, specify the extent limit in each case







66.
Restrictions on powers of board
Section 293
check whether:
·         provisions of subsection 1 been conformed to
·         consent of the company in general meeting obtained
·         board exercised the powers in accordance with the conditions contained in the resolution



Rs. 50000/- or 5% of profit as per Section 349 & Section 350.
67.
Prohibition on the company to make any political contributions

Section 293A

Check whether:
·         Any political contribution was made by the company in contravention of the Act
·         Board resolution passed
·         donations were disclosed in the Annual
       Accounts





68.
Contribution to any National Defence Fund
Section 293B
Check whether:
·         Board resolution/general meeting resolution passed to this effect
·         the total amount of contributions had been disclosed in the profit and loss account of the financial year to which the amount related






69.
Loans to directors etc.
Section 295
Check whether:
·         The loan falls under the exemption contained in subsection(2), if not, whether Central Govt. approval obtained
·         Any loans etc. were provided in contravention of the provisions of this section and guidelines made by Central Govt. in this regard



Rs. 50000/- simple imprisonment upto 6 months.




70.
Board's sanction to be required for certain contracts in which directors are interested
Section 297
Check whether:
·         exempting provisions contained in subsection 2 were applicable
·         If not, consent of the board obtained by resolution passed at the board meeting for entering into the contracts in which directors are interested
·         Previous approval of the Central Government obtained, if the paid-up share capital of the company is not less than Rs.1 crore
·         the particulars of the contract were entered in register of contracts etc. u/s 301

Application to be made to Central Govt.
Form No. 24A
Previous approval required
Fine upto 50000
71.
Disclosure of interest by directors
Section 299
Check whether:
·         The disclosure were duly were by all the directors
·         general notice of disclosure had been duly annexed duly renewed
·         particulars of interest entered in the register of contracts, etc. in accordance with the provisions of sec. 301
·         notice duly given for changes in directorship/membership etc. by the directors


Form No.24AA


72.
Interested director not to participate or vote in board's proceedings.
Section 300
Check whether the exemption provisions contained in the sub- section (2) were applicable, if not, check that:
·         no director took part in any discussion , or voted on any contract or agreement in which he was interested nor his presence was counted for the purpose of forming a quorum at the time of any such discussion or vote.







73.
Register of contracts, companies and firms in which directors are interested.
Section 301
Check that:
·         the particulars of Form 24AA are duly entered in the register of contracts.
·         the relevant particulars of all contracts or arrangements to which section 297 or section 299 applies are entered in the register.
·         the register duly placed before the meeting of the board and duly signed by all the directors present.




Fine upto 50000

Disclosure to members of directors interest in contract appointing manager, managing director (managing agent or secretaries & treasurer)

Within 21 days from entering contract

The company and every officer in default punishable with fine upto Rs.10000.
74.
Register of directors
Section 303
Check whether:
·         The company kept the register of directors at its registered office
·         The register contained the specified particulars and was up-to-date
Return in duplicate containing the particulars specified in register of directors, managing director, manager and secretary and notification in duplicate of any change among directors etc.
Form 32
30 days from the date of appointment of first directors and 30 days from the date on which change took place.
The company and every officer in default punishable with fine upto Rs.500 per day of default.
75.
Duty of directors etc. to make disclosure
Section 305
Check that:
·         directors including deemed directors, managing director, manager or secretary made necessary disclosure within 20 days of appointment/ relinquishment of the office



Director, etc shall be punishable with fine upto Rs. 500/-

76.
Register of directors shareholdings

Section 307

Check that :
·         register was duly kept at the registered office and contained the specified particulars



Section 308 fail to comply with Sec 307 shall be punishable for the term which may extend to two years or with fine 50000/- or both
77.
Remuneration of directors

Section 309

Check whether

·         The payment of remuneration to directors was within the limits and in the manner provided by sections 198, 309 & 310

·         The remuneration so paid was in accordance with the provisions of Articles/resolutions passed in General meeting/approval of Central Govt.
·         The computation of net profit was done in accordance with the provisions of Sections 349 and 350
·         No other remuneration was paid to a director in any other capacity except as permitted
·         Approval of Central Govt. obtained for payment, if any, made in excess of specified limits
·         Excess payment, if any, to a director was duly refunded or Central Govt.'s permission obtained for waiver, if any.




78.
Provision for increase in remuneration to require Government sanction

Section 310

Check whether
·         Increase in accordance with Schedule XIII
·         If not, whether approval of Central Govt. Obtained

Application to be made to Central Govt.
Form 26


79.
Increase in remuneration of managing director reappointment/appointment after Act to require government sanction

Section 311

Check that:
·         Increase in accordance with Schedule XIII
·         no increase in the remuneration effected without Central Govt.'s approval  
·         no tax free payment was made (section 200)
·         a notice u/s 640B was published as specified in section 640B(2)(b) and attached with the application
Application to be made to the Central Govt.
Form 26


80.
Appointment and terms of office of alternate directors

Section 313

Check that:

·         AOA or a resolution of the company passed in general meeting provide for the appointment of alternate directors

·         Resolution for appointment of alternate director to act for the original director passed during his absence for a period not less than 3 months from the state in which the meeting of the Board are ordinary held
·         the appointments were duly made
·         Particulars entered in the register of directors
·         Alternate directors effectively vacated the office on return of original director to the state or on the expiry of the original director's term
Requisite information about the alternate director as duly given by the director
Form 29 &32
Within 30 days of passing the resolution
Penalty/Late fees to be charged
81.
Director, etc. not to hold office or place of profit

Section 314

Check that:
·         a director of the company or his partner or relative etc. hold any office or place of profit carrying monthly remuneration of Rs.10000 or more
·         the necessary declaration was obtained from every individual firm, private co. or other body corporate appointed to any office or place of profit pursuant to sub-section (2A)
·         special resolution was duly passed at the general meeting of the company held for the first time after the holding of such office or place of profit.
·         prior approval of the Central Government and company in General Meeting  obtained where monthly remuneration was not less than Rs.20000
·         if appointment was not approved the concerned person vacated his office immediately.

Form 23 and 24B.


82.
Member of companies of which one person may be appointed managing director

Section 316

Check whether:
·         the company employed any person as managing director, if he was either the managing director or the manager of any other company
·         If so, a unanimous resolution (for such appointment) was duly passed at a meeting of the board with the consent of all the directors present at the meeting
·         Specific notice of the appointment and resolution were given

·         Central Govt. approval obtained, when a person was appointed managing director of more than 2 companies

Form No.23
Within 30 days of passing of the resolution

83.
Determination of net profits

Section 349

Check whether
·         it was computed in accordance with the provisions of this section
·         credits and deductions specified in this section had been duly made





84.
Ascertainment of depreciation

Section 350

Check whether:
the depreciation calculated with reference to the written down value of the assets as shown by the books of the company at the end of the financial year at the rate specified in Schedule XIII








85.
Loans etc. to companies under the same management

Section 370

Check whether:
·         Board resolution was passed
·         A special resolution is passed in general meeting:
1.     for loans to companies under the same   management irrespective of the amount
2.     for loans to companies not under the same management where the aggregate of loans exceeds 30% of the aggregate of subscribed capital and free reserves of the lending company
·         Prior approval of the central Govt. was obtained
in the following cases:
1.     where the loans given to bodies corporate under the same management as of the company exceeds 30% of the subscribed capital and free reserves of the lending company
2.     where the loans given to bodies corporate not under the same management as the company exceeds 30% of the subscribed capital and free reserves of the lending company
·         register of loans was maintained with specified particulars
·         particulars of every loan, guarantee etc. were entered in the register within three days of making such loans
·         register to be maintained at the registered office and to be kept open for inspection and extracts thereof to be supplied to members, if required, on payment of the requisite fees

 
Form 23, if special resolution passed
FORM 34AA if Central Government approval required along with the requisite enclosures and by payment of the prescribed fees.
30 days from the date of passing of the resolution.




86.
Purchase by company of shares etc. of other companies

Section 372

Check that:
·         notice of the resolution to be moved at the meeting of the board had been given to each director along with the notice of meeting resolution passed by the consent of all the directors present, except those who were not entitled to vote
·         the investment is approved the investing company by a resolution and the approval of the
Central Government is obtained in the following cases:
  1. where investment to be made in bodies corporate under the same group or not as the Company exceeds 30% of the subscribed capital and free reserves
  2. where the investment to be made is in excess of  30% of the subscribed equity share capital or paid up equity and preference capital whichever is less of the investee company 
·         register of investments with prescribed particulars was maintained
·         particulars in the register were entered within 7 days of making such investments
·         register of members to be kept at registered office of the company to make it available for inspection and extracts thereof were supplied to members on payment of requisite fees
·         a statement showing all the investments in the bodies corporate was annexed to the balance sheet of the company

Form 34 B





87.
Employees' securities to be deposited in Post Office Savings Bank or Scheduled Bank

Section 417

Check whether:
·         money or security deposited with the company by its employees in pursuance of contracts of service was deposited within 15 days in a post office saving bank account or in a special account with the State bank of India or any other scheduled bank
·         no portion of such money or securities was utilised by the company except for the purposes  agreed into the contracts of service




88.
Provisions applicable to provident fund of employees

Section 418

Check whether:
·         moneys contributed whether by company or by employees to the provident fund constituted by the company were properly deposited in a post office saving bank account or in a special account with the State Bank of India or any other scheduled bank within 15 days
·         if a trust has been created for this purpose, whether the contributions of the employees and contribution of the company paid to the trustees within 15 days from the date of collection




89.
Documents etc. to be delivered to the Registrar by companies carrying on business in India

Section 592

Check whether
·         the documents specified were duly certified and filed with ROC
Documents and particulars specified in the section by foreign companies carrying on business in India.
Form 44
30 days of establishment of place of business in India.
The company and every officer or agent of the company in default punishable with fine upto Rs.10000 and further fine upto Rs.1000 per day of default.



90.
Documents of any alterations made to be delivered to the Registrar
 Section 593
Check whether :
·         Any alteration made
·         If so, ROC informed






Return in case any alteration is made in:
i)MOA, AOA or the charter
ii)the registered or principal office
iii)the directors or  secretaries
iv)the name and the address of any person authorised to accept services or documents
v)principal place of business in India
Forms 49 & 52


91.
Accounts of foreign companies
Section 594
Check whether:
·         Balance Sheet and Profit and Loss account with necessary particulars and annexure as laid before the general meeting, if, no whether exempted/ modified by Central Govt.
Three copies of Balance Sheet and Profit and Loss Account and other documents required by the provisions of the act to be annexed or attached thereto by other companies (being in English or with certified translation in English )or every calendar year together with three copies of a list of all places of business in India.
-
9 months from the close of the financial year.
The company and every officer or agent of the company in default punishable with fine upto Rs.10000 and further fine upto Rs.1000 per day of default.
92.
Foreign company ceasing to have place of office in India
Section 597
Check whether :
·         ROC at New Delhi as well as of the state where place of business is situated informed
Notice on ceasing to have a place of business in India.
Form 52
Forthwith.

93.
Registration of charges, appointment of receiver and books of account

Section 600

Check whether
·         The applicability and compliance of sections 118, 124 to 145, 159, 209, 209A, 233A, 233B, 234 to 246
Particulars of charges, appointment of receiver, modification and satisfaction of charges as required to be registered under sections 124 to 145.
Forms 55, 56, 57, 58, 59 &60
30 days of creation of charge.
As prescribed in relevant sections.



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