A member wants to inspect the Register of Directors’ shareholdings on a day other than the date on which the Annual General Meeting of the Company is held.
(i) A depoitor is also entitled to be furnished free of cost with a copy of the last balance sheet of the company and of every document required by law to be annexed or attached thereto including the profit and loss account and the auditor’s report even though he is not a member of the company. Accordingly, the company has to furnish the balance sheet within 7 days after the demand is received [Section 219 (2) and (4)].
(ii)The Register of Director’s shareholdings must be kept at the registered office
of the company and it shall be open to inspection of any member during business hours
subject to such reasonable restrictions as the company may, by its Articles or in a general meeting, impose so that not less than two hours in each day are allowed for inspection. But, it sl\all b: a.vailable for inspection only during the peri?d be.B.in’p 14 days before the date of the company’s annual general Irieeting Tha enaing 3 days aftef”the date of its conclusion. In computing 14 days aI’\d 3 days, any day which is a Saturday, a Sunday or a public holiday shall be disregarded. lithe member wants to
. inspect the register beyond this period, it is not necessary for the company to make
available the register for inspection [Section 307 (5)].
1. Is it in order for an auditor appointed at an annual general meeting to continue to function as Auditor when the next annual general meeting has not been held in time? Can he continue as Auditor in case a new Auditor has been appointed in his place at the annual general meeting which was adjourned to a later date?
[November, 1995]
2. How will you deal with the appointment of Auditors in the following cases?
(i) Te first Auditor has not been appointed by the Board of Directors within
one month of incorporation of the company.
(ii) One of the two J oint Auditors appointed in the last Annual General Meeting
resigned.
(iii) One of the partners of a firm of Chartered Accountants appointed as
Auditor died.
(iv) The aggregate shareholding of nationalised Banks, LIC and !DBI exceeded
55% of the paid-up share capital of the company. [November, 1994]
3. What are the books of account to be maintained by a company? Where are the
books to be kept? Who are eligible to inspect the books of account?
[May, 1994]
4. When is a company required to appoint Cost Auditor? What are his duties and
powers? What action can be taken by the Central Government on receipt of Cost
Auditor’s report? [May, 1994]
5. “Though an Auditor is appointed normally by passing an ordinary resolution, yet there are certain circumstances when appointment can be made only by passing a special resolution.” Discuss the statement and state the circumstances when passing of a special resolution for the appointment of an Auditor is a must.
When must a retiring Auditor be re-appointed
6. Under what circumstances can the Central Government order Special Audit of accounts of a company? What action can the Central Government take on receipt
of such report? [May, 19921
7. When is an Auditor required to be appointed by a Special Resolution? What are the consequences if the provisions of the Companies Act, 1956 are not complied
company for any year has not been held, a statement of that fact and the reasons
therefor shall be annexed to the balance sheet and to the copies thereof required to be
filed with the Registrar.In case of default, the company and every officer of the company who is in default shall be liable to fine which may extend to Rs. 500 for every day during which the default continues.
Tuesday, January 8, 2008
Books of Accounts Maintained by a Foreign Company
Books of Accounts to be Maintained by a Foreign Company
According to Section 600 (3) (b) of the Companies Act, the provisions of Sections 209 and 209-A are applicable to the Indian business of a foreign company having an established place of business in India, as they apply to a company incorporated in India. Therefore, foreign companies are required to maintain books of accounts only with reference to their Indian business under the Companies Act.
According to Section 209 (1), the foreign company is required to maintain proper
books of account with respect to:
(a) all sums of money received and expended by the company and the matters in
respect of which the receipt and expenditure take place;
(b) all sales and purchases of goods by the company;
(c) the assets and liabilities of the company; and
(d) in the case of a company pertaining to any class of companies engaged in
production, processg, manufacturing or mining activities, such particulars relating to utilisation of material or labour or to other items of cost as may be prescribed, if such class of companies is required by the Central Government to include such particulars in the books of accounts.
Proper books of accounts shall not be deemed to have been kept with respect to
the matters specified above:
(a) if there are not kept such books as are necessary to give a true and fair view
of the state of affairs of the company or branch office, as the case may be, and
to explain the transactions; and
(b) if such books are not kept on accrual basis and according to the double entry
system of account41g.
As already stated, these books of accounts are required to be maintained with
reference to the Indhm business of the for.eign company.
The books of accounts are required to be maintained at the principal place of
business in India [Section 600 (3) (a)].
The books of accounts of a foreign company relating to its Indian business, may
be inspected by the following persons:
(a) any director of the company’during business hours [Section 209 (4)];
(b) the Registrar; and
(c) the government officer authorised by the Central Government under Section
209 A (1); and
(d) such officers of SEBI as may be authorised by it.
. Comment: (i) A non-member for whom the company has accepted deposits, asks for a copy of the latest Balance Sheet of the Company; and
According to Section 600 (3) (b) of the Companies Act, the provisions of Sections 209 and 209-A are applicable to the Indian business of a foreign company having an established place of business in India, as they apply to a company incorporated in India. Therefore, foreign companies are required to maintain books of accounts only with reference to their Indian business under the Companies Act.
According to Section 209 (1), the foreign company is required to maintain proper
books of account with respect to:
(a) all sums of money received and expended by the company and the matters in
respect of which the receipt and expenditure take place;
(b) all sales and purchases of goods by the company;
(c) the assets and liabilities of the company; and
(d) in the case of a company pertaining to any class of companies engaged in
production, processg, manufacturing or mining activities, such particulars relating to utilisation of material or labour or to other items of cost as may be prescribed, if such class of companies is required by the Central Government to include such particulars in the books of accounts.
Proper books of accounts shall not be deemed to have been kept with respect to
the matters specified above:
(a) if there are not kept such books as are necessary to give a true and fair view
of the state of affairs of the company or branch office, as the case may be, and
to explain the transactions; and
(b) if such books are not kept on accrual basis and according to the double entry
system of account41g.
As already stated, these books of accounts are required to be maintained with
reference to the Indhm business of the for.eign company.
The books of accounts are required to be maintained at the principal place of
business in India [Section 600 (3) (a)].
The books of accounts of a foreign company relating to its Indian business, may
be inspected by the following persons:
(a) any director of the company’during business hours [Section 209 (4)];
(b) the Registrar; and
(c) the government officer authorised by the Central Government under Section
209 A (1); and
(d) such officers of SEBI as may be authorised by it.
. Comment: (i) A non-member for whom the company has accepted deposits, asks for a copy of the latest Balance Sheet of the Company; and
Explain the provisions of the Companies Act
It shall be the duty of every director, other officer, or employee of the company to produce to the person making inspection all such books of account and other books and papers of the company in his custody or control and to furnish him with any statement, information or explanation relating to the affairs of the company as the (‘aid person may require of him within such time and at such place as he may specify.
Further, it shall also be his duty to give all assistance in connection with inspection
which the company may reasonably be expected to give.
Sub-sec. (6) of Section 209 A requires the person making the inspection to submit
a report to the Central Government.
If default is made in complying with the provisions of this Section, every officer of the company who is in default shall be punishable with fine which shall not be less than Rs. 50,000’ and also with imprisonment for a term not exceeding one year.
4.Explain the provisions of the Companies Act, 1956 and the Companies (Central
Government’s) General Rules and Forms, 1956 regarding filing of documents and returns by a foreign company.State the documents and returns that are required to be filed with the Registrar of Companies under the Companies Act, 1956 by foreign companies initially when they establish a place of business in India and later on periodically or on the happening of
certain events.
Filing of Documents and Returns by Foreign Companies
1. Section 592 of the Companies Act requires that every foreign company having a place of business in India must deliver to the Registrar for registration, within 30 days
of the establishment of the place of business, the documents and particulars specified in clauses (a) to (e) of sub-section (1).
The documents specified under clauses (a) to (e) are:
(i) a certified copy of the charter, statute, or Memorandum and Articles of a
foreign company or other instrument constituting or defining the constitution
of a foreign company;
(ii) the full address of registered or principal office of the company;
(iii)a list of the directors and secretary of the company, containing the prescribed
particulars;
(iv)the name or address or any of the persons authorised to accept service of
process and any notices or documents on behalf of the foreign company; and,
(v) the principal place of business of the company in India.
The information should be filed in Form No. 44 of Central Government’s General
Rules and Forms, 1956.
2. Any alteration in the documents required to be registered u/s 592 (1) must be I notified to the Registrar in the form, of a return containing the prescribed particulars of the alteration within the prescribed time [Sec. 593].
3.Under Section 594, a foreign company must prepare a balance sheet and profit and loss account for every calendar year and deliver three copies of the same (along with its English translation) to the Registrar. It should also send three copies of a list in the prescribed form of all places of business established in India as on the date of the relevant balance sheet.
Under Rule 18 of the Central Government’s General Rules and Forms, 1956, the documents referred to in Sec. 594 are to be delivered to the Registrar within a period of 9 months from the date of close of the financial year of e foreign company. However, the Registrar may, for any special reason and on the application of foreign company, extend the period but not exceeding 3 months.
4.If a foreign company ceases to have a place of business in India, it must forthwith
give notice of the fact to the Registrar [Sec. 597].
The notice should be given in Form No. 52 of the Central Government’s General
Rules and Forms, 1956.
5.Under Section 597 (1) and (2), any document which a foreign company is required to deliver to the Registrar under this Act, must be delivered to the Registrar having jurisdiction over New Delhi, as well as to the Registrar of the State where the principal place of business of the company is situated.
6.The provisions of Sections 124 to 145 of the Companies Act relating to registration of charges also apply mutatis mutandis to foreign companies. Consequently, the returns of charges required to be filed under these Sections, are also to be filed with the Registrar by the foreign companies in Form Nos. 55 to 66 of the Central Government’s General Rules and Forms, 1956 within 30 days of creation, modification and satisfaction of charges or of the acquisition of properties and issue of debentures by the foreign companies.
5.What are the books of account t be maintained uner the mpaies Act,
1956 by a foreign company having established a place of business within India? Who
can inspect the books of account of such companies?
Further, it shall also be his duty to give all assistance in connection with inspection
which the company may reasonably be expected to give.
Sub-sec. (6) of Section 209 A requires the person making the inspection to submit
a report to the Central Government.
If default is made in complying with the provisions of this Section, every officer of the company who is in default shall be punishable with fine which shall not be less than Rs. 50,000’ and also with imprisonment for a term not exceeding one year.
4.Explain the provisions of the Companies Act, 1956 and the Companies (Central
Government’s) General Rules and Forms, 1956 regarding filing of documents and returns by a foreign company.State the documents and returns that are required to be filed with the Registrar of Companies under the Companies Act, 1956 by foreign companies initially when they establish a place of business in India and later on periodically or on the happening of
certain events.
Filing of Documents and Returns by Foreign Companies
1. Section 592 of the Companies Act requires that every foreign company having a place of business in India must deliver to the Registrar for registration, within 30 days
of the establishment of the place of business, the documents and particulars specified in clauses (a) to (e) of sub-section (1).
The documents specified under clauses (a) to (e) are:
(i) a certified copy of the charter, statute, or Memorandum and Articles of a
foreign company or other instrument constituting or defining the constitution
of a foreign company;
(ii) the full address of registered or principal office of the company;
(iii)a list of the directors and secretary of the company, containing the prescribed
particulars;
(iv)the name or address or any of the persons authorised to accept service of
process and any notices or documents on behalf of the foreign company; and,
(v) the principal place of business of the company in India.
The information should be filed in Form No. 44 of Central Government’s General
Rules and Forms, 1956.
2. Any alteration in the documents required to be registered u/s 592 (1) must be I notified to the Registrar in the form, of a return containing the prescribed particulars of the alteration within the prescribed time [Sec. 593].
3.Under Section 594, a foreign company must prepare a balance sheet and profit and loss account for every calendar year and deliver three copies of the same (along with its English translation) to the Registrar. It should also send three copies of a list in the prescribed form of all places of business established in India as on the date of the relevant balance sheet.
Under Rule 18 of the Central Government’s General Rules and Forms, 1956, the documents referred to in Sec. 594 are to be delivered to the Registrar within a period of 9 months from the date of close of the financial year of e foreign company. However, the Registrar may, for any special reason and on the application of foreign company, extend the period but not exceeding 3 months.
4.If a foreign company ceases to have a place of business in India, it must forthwith
give notice of the fact to the Registrar [Sec. 597].
The notice should be given in Form No. 52 of the Central Government’s General
Rules and Forms, 1956.
5.Under Section 597 (1) and (2), any document which a foreign company is required to deliver to the Registrar under this Act, must be delivered to the Registrar having jurisdiction over New Delhi, as well as to the Registrar of the State where the principal place of business of the company is situated.
6.The provisions of Sections 124 to 145 of the Companies Act relating to registration of charges also apply mutatis mutandis to foreign companies. Consequently, the returns of charges required to be filed under these Sections, are also to be filed with the Registrar by the foreign companies in Form Nos. 55 to 66 of the Central Government’s General Rules and Forms, 1956 within 30 days of creation, modification and satisfaction of charges or of the acquisition of properties and issue of debentures by the foreign companies.
5.What are the books of account t be maintained uner the mpaies Act,
1956 by a foreign company having established a place of business within India? Who
can inspect the books of account of such companies?
State of affairs of the company
Maintenance of Books of Account
Section 209 of the Companies Act requires every company to maintain at its registered
office, proper books of account with respect to:
(a)all sums of money received and expended by the company and the matters in
respect of which the receipt and expenditure took place;
(b) all sales and purchases of goods by the company;
(c) the assets and liabilities of the company; and
(d) in the case of companies engaged in production, processing, manufacturing
or mining activities, such particulars relating to the utilisation of material or labour or to other items of cost as may be prescribed, if such companies are required by the Central Government to include such particulars in the books of account.
As to what shall constitute proper books of account, sub-section (3) of Section 209 (as per 1988 amendment) provides that proper books of account shall not be deemed to be kepf by a company:
(a) if there are not kept such books as are necessary to give a true and fair view of the state of affairs of the company or the branch office and to explain its transactions; and
(b) if such books are not kept on accrual basis and according to the double entry
system of accounting.
Place of Keeping. The books of accounts of a company must be kept at the registered office or at such other place in India as the Board may decide. In case the Board decides to keep the books of accounts at some other place, the company must file a notice in writing with the Registrar within 7 days of the decision, giving the full address of that other place. If a company has branch offices, proper books of accounts must be kept separately at such offices and proper summarised returns of the accounts must be sent at intervals of not more than 3 months, to the registered office or the other place where books of account of the head office are kept [Sec. 209 (2)].
Inspection
Section 209 requires that the books of account and other books and papers of every
company shall be open to inspection during business hours:
(i) by the Registrar; or
(ii) by such officer of Government as may be authorised by the Central Govern
ment in this behalf.
The aforesaid inspection may be made without giving any previous notice to the
company or any officer thereof.
The person making the inspection under this Section may, during the course of inspection:
(i)make or cause to be made copies of books of account and other books and
papers; or
(ii)place or cause to be placed any marks of identification thereon, in token of the
inspection having been made.
Any person making an inspection under this Section shall have the same powers as are vested in a Civil Court under the Code of Civil Procedure while trying a suit, in respect of the following matters:
(i)the discovery and production of books of account and other documents at
such place and such time as may be specified by such person;
(ii) summoning and enforcing the attendance of persons and examining them on
oath; and
(iii) inspection of any books, registers and other documents of the company at any
place [Sub-sec. (5)].
Section 209 of the Companies Act requires every company to maintain at its registered
office, proper books of account with respect to:
(a)all sums of money received and expended by the company and the matters in
respect of which the receipt and expenditure took place;
(b) all sales and purchases of goods by the company;
(c) the assets and liabilities of the company; and
(d) in the case of companies engaged in production, processing, manufacturing
or mining activities, such particulars relating to the utilisation of material or labour or to other items of cost as may be prescribed, if such companies are required by the Central Government to include such particulars in the books of account.
As to what shall constitute proper books of account, sub-section (3) of Section 209 (as per 1988 amendment) provides that proper books of account shall not be deemed to be kepf by a company:
(a) if there are not kept such books as are necessary to give a true and fair view of the state of affairs of the company or the branch office and to explain its transactions; and
(b) if such books are not kept on accrual basis and according to the double entry
system of accounting.
Place of Keeping. The books of accounts of a company must be kept at the registered office or at such other place in India as the Board may decide. In case the Board decides to keep the books of accounts at some other place, the company must file a notice in writing with the Registrar within 7 days of the decision, giving the full address of that other place. If a company has branch offices, proper books of accounts must be kept separately at such offices and proper summarised returns of the accounts must be sent at intervals of not more than 3 months, to the registered office or the other place where books of account of the head office are kept [Sec. 209 (2)].
Inspection
Section 209 requires that the books of account and other books and papers of every
company shall be open to inspection during business hours:
(i) by the Registrar; or
(ii) by such officer of Government as may be authorised by the Central Govern
ment in this behalf.
The aforesaid inspection may be made without giving any previous notice to the
company or any officer thereof.
The person making the inspection under this Section may, during the course of inspection:
(i)make or cause to be made copies of books of account and other books and
papers; or
(ii)place or cause to be placed any marks of identification thereon, in token of the
inspection having been made.
Any person making an inspection under this Section shall have the same powers as are vested in a Civil Court under the Code of Civil Procedure while trying a suit, in respect of the following matters:
(i)the discovery and production of books of account and other documents at
such place and such time as may be specified by such person;
(ii) summoning and enforcing the attendance of persons and examining them on
oath; and
(iii) inspection of any books, registers and other documents of the company at any
place [Sub-sec. (5)].
Maintenance of proper books of account
The Register shall be kept at the registered office of the company and
(a) shall be open to inspection at such office; and
(b) extracts may be taken therefrom and copies thereof may be required.
by any member of the company to the same extent in the same manner, and on
payment of same fees as in the case of the Register of Members of the company.
Write short notes on the following:
(a) Preservation of books of account by a company;
(b)Disposal of books and papers after winding up of a company.
(a)Preservation of Books of Accounts
Sub-Section (4) of Section 209 provides that the books of account of a company relating to a period of not less than 8 years immediately preceding the current year, together with the vouchers relevant to entry in such books of account must be preserved in good order. In case of a company incorporated less than 8 years before the current year, the books of account for the entire period preceding the current year, together with relevant vouchers must be preserved in good order.
(b)Books and Papers after Winding up
Section 550 provides that after the affairs of the company have been completely wound up and it is about to be dissolved, its books and papers and those of the liquidator may be disposed off:
(i) according to direction of the Court, in case of winding up by or subject to
supervision of Court;
(ii) in such manner ,as directed by a special resolution of the company, in case of
members’ voluntary winding up; and
(iii) in such manner as the Committee of Inspection of the creditors may direct, in
case of creditors’ voluntary winding up.
The Central Government is empowered to make rules to prevent the destruction of
books and papers of a company which has been wound up for a period not exceeding 5
years from the dissolution of the company as the Central Government thinks proper.
State the provisions of the Companies Act relating to maintenance of proper
books of account. When and by whom can the books of account be inspected?
Examine with reference to the provisions of the Companies Act, 1956: (i) The nature of books of account to kept by a company; (ii) The persons who have the right to inspect such books; and (iii) The place or places where the said books of account are required to bemaintained.
(a) shall be open to inspection at such office; and
(b) extracts may be taken therefrom and copies thereof may be required.
by any member of the company to the same extent in the same manner, and on
payment of same fees as in the case of the Register of Members of the company.
Write short notes on the following:
(a) Preservation of books of account by a company;
(b)Disposal of books and papers after winding up of a company.
(a)Preservation of Books of Accounts
Sub-Section (4) of Section 209 provides that the books of account of a company relating to a period of not less than 8 years immediately preceding the current year, together with the vouchers relevant to entry in such books of account must be preserved in good order. In case of a company incorporated less than 8 years before the current year, the books of account for the entire period preceding the current year, together with relevant vouchers must be preserved in good order.
(b)Books and Papers after Winding up
Section 550 provides that after the affairs of the company have been completely wound up and it is about to be dissolved, its books and papers and those of the liquidator may be disposed off:
(i) according to direction of the Court, in case of winding up by or subject to
supervision of Court;
(ii) in such manner ,as directed by a special resolution of the company, in case of
members’ voluntary winding up; and
(iii) in such manner as the Committee of Inspection of the creditors may direct, in
case of creditors’ voluntary winding up.
The Central Government is empowered to make rules to prevent the destruction of
books and papers of a company which has been wound up for a period not exceeding 5
years from the dissolution of the company as the Central Government thinks proper.
State the provisions of the Companies Act relating to maintenance of proper
books of account. When and by whom can the books of account be inspected?
Examine with reference to the provisions of the Companies Act, 1956: (i) The nature of books of account to kept by a company; (ii) The persons who have the right to inspect such books; and (iii) The place or places where the said books of account are required to bemaintained.
Register of Loans and Invesbnent
If default is made in complying with the provisions of sub-section (1) or (2) or if any i:r;1spectlon required under Sec. 307 is refused or if any copy required thereunder is not sent within a reasonable time, the company and every officer of the company, who is in default, shall be punishable with fine which may extend to Rs. 50,000* and also with a further fine which may extend to Rs. 2,500* for every day during which the default continues [Sub-sec. (8)].
In case of refusal of inspection of the register, the Company Law Board may also, by order, compel an immediate inspection of the register [Sub-sec. (9)].
Deemed Directors and Record of Their Shareholdings. For purposes of Section 307, any person in accordance with whose directions or instructions the Board of Directors of a company is accustomed to act, shall be deemed to be a director of the company [Sub-sec. (10)].
Every director of a company and every person dee”med to be a director of the company by virtue of sub-sec. (10) of Section 307, shall give notice to the company of
such matters relating to himself as may be necessary for the purpose of enabling the. company to comply with the provisions of that Section [Section 304 (1)].
The notice, as aforesaid, shall be given in writing and if it is not given at a meeting of the Board, the person giving the notice shall take all reasonable steps to secure that it is brought up and read at the meeting of the Board next after it is given [Sec. 308 (2)].
Failure to comply with the provisions of sub-sec. (1) or (2) of Section 308 shall be punishable with imprisonment up to 2 Y2ars or with fine up to Rs. 50,000’ or with both.
Register of Loans and Invesbnent
Sub-section (-?) of Section 372 A (inserted by the Companies (Amendment) Act, 1999) provides th.,.,t every company shall keep a register showing the following particulars in respect of every investment or loan made, guarantee given or security provided by it in relation to any body corporate under sub-section (1), namely:
(i)the name of the body corporate;
(ii)the amount, terms and purpose of the investment or loan or security or
guarantee;
(iii) the date on which the investment or loan has been made; and
(iv)the date on which the guarantee has been given or security has been provided
in connection with a loan.
The aforesaid particulars shall be entered chronologically in the Register within 7 days of the making of investment or loan, or the giving of guarantee or the provision of security.
In case of refusal of inspection of the register, the Company Law Board may also, by order, compel an immediate inspection of the register [Sub-sec. (9)].
Deemed Directors and Record of Their Shareholdings. For purposes of Section 307, any person in accordance with whose directions or instructions the Board of Directors of a company is accustomed to act, shall be deemed to be a director of the company [Sub-sec. (10)].
Every director of a company and every person dee”med to be a director of the company by virtue of sub-sec. (10) of Section 307, shall give notice to the company of
such matters relating to himself as may be necessary for the purpose of enabling the. company to comply with the provisions of that Section [Section 304 (1)].
The notice, as aforesaid, shall be given in writing and if it is not given at a meeting of the Board, the person giving the notice shall take all reasonable steps to secure that it is brought up and read at the meeting of the Board next after it is given [Sec. 308 (2)].
Failure to comply with the provisions of sub-sec. (1) or (2) of Section 308 shall be punishable with imprisonment up to 2 Y2ars or with fine up to Rs. 50,000’ or with both.
Register of Loans and Invesbnent
Sub-section (-?) of Section 372 A (inserted by the Companies (Amendment) Act, 1999) provides th.,.,t every company shall keep a register showing the following particulars in respect of every investment or loan made, guarantee given or security provided by it in relation to any body corporate under sub-section (1), namely:
(i)the name of the body corporate;
(ii)the amount, terms and purpose of the investment or loan or security or
guarantee;
(iii) the date on which the investment or loan has been made; and
(iv)the date on which the guarantee has been given or security has been provided
in connection with a loan.
The aforesaid particulars shall be entered chronologically in the Register within 7 days of the making of investment or loan, or the giving of guarantee or the provision of security.
Register of Directors’ Share holdings
The company shall within 30 days from the date of first appointment of directors or from the date of any change in the directorate, send to the Registrar a return in duplicate in the prescribed form containing particulars of such appointment or change in directorate [Sub-sec. In case default is made in complying with the aforesaid provisions, the company
and every officer of the company in default, shall be punishable with fine up to Rs.
.. 500’ for every day during which the default continues [sub-sec.(3)].
Register of Directors’ Share holdings (Sec. 307)
‘Section 307 requires every company to keep a register showing each director’s shareholding in the company, giving details as to the number, description and amount of shares and debentures. These details are also required to be given .in respect of a dirtor’s holding in any other body corporate, being the company’s subsidiary or holding company, or a subsidiary of the company’s holding company. Such shares and debentures may be held by the director or in trust for him, or of which he may have any right to become holder whether on payment or not.
Where any shares or debentures have to be recorded in the said register or to be omitted therefrom, in relation to any director, by reason of a transaction entered into after the commencement of this Act and while he is a director, the register shall also show the date of, and the price or other consideration for, the transaction [Sub-sec:(2)].
However, where there is an interval between the agreement for any such transaction and the completion thereof, the date so shown shall be that of the agreement [Provisions to sub-sec.
If a director so requires, the nature and extent of any interest or right in or over any shares or debentures recorded in relation to a director in the said register shaJI be indicated in the register [Sub-section (3)].
Place of Keeping the Register and its Inspection. The register, as aforesaid, shall be kept at the registered office of the company. It shall be open to the inspection of any member or debentureholder of the company during business hours for not less than 2 hours each day during the period of 14 days before the date of the company’s annual general meeting and three days after the date of its conclusion. During this or any other periThe Central Government or Registrar may, at any time, require a copy of the register or any part thereof [Sub-sec. (6)]. It shall also be produced at the commencement of every annual general meeting of the company and shall remain open and accessible quring the continuance of the meeting to any person entitled to attend the meeting. If default is made in complying with the provisions of this sub-section, the company and every officer of the company, who is in default, shall be punishable with fine which may extend to Rs. 5,000”.
and every officer of the company in default, shall be punishable with fine up to Rs.
.. 500’ for every day during which the default continues [sub-sec.(3)].
Register of Directors’ Share holdings (Sec. 307)
‘Section 307 requires every company to keep a register showing each director’s shareholding in the company, giving details as to the number, description and amount of shares and debentures. These details are also required to be given .in respect of a dirtor’s holding in any other body corporate, being the company’s subsidiary or holding company, or a subsidiary of the company’s holding company. Such shares and debentures may be held by the director or in trust for him, or of which he may have any right to become holder whether on payment or not.
Where any shares or debentures have to be recorded in the said register or to be omitted therefrom, in relation to any director, by reason of a transaction entered into after the commencement of this Act and while he is a director, the register shall also show the date of, and the price or other consideration for, the transaction [Sub-sec:(2)].
However, where there is an interval between the agreement for any such transaction and the completion thereof, the date so shown shall be that of the agreement [Provisions to sub-sec.
If a director so requires, the nature and extent of any interest or right in or over any shares or debentures recorded in relation to a director in the said register shaJI be indicated in the register [Sub-section (3)].
Place of Keeping the Register and its Inspection. The register, as aforesaid, shall be kept at the registered office of the company. It shall be open to the inspection of any member or debentureholder of the company during business hours for not less than 2 hours each day during the period of 14 days before the date of the company’s annual general meeting and three days after the date of its conclusion. During this or any other periThe Central Government or Registrar may, at any time, require a copy of the register or any part thereof [Sub-sec. (6)]. It shall also be produced at the commencement of every annual general meeting of the company and shall remain open and accessible quring the continuance of the meeting to any person entitled to attend the meeting. If default is made in complying with the provisions of this sub-section, the company and every officer of the company, who is in default, shall be punishable with fine which may extend to Rs. 5,000”.
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