Company Secretarial Practice I (English Version)-munotes

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INTRODUCTION TO COMPANY
Unit Structure :
1.0 Objectives
1.1 Introduction
1.2 Joint Stock Company
1.3 Company Secretary
1.4 Appointment Procedure, Resignation and Removal of
Company Secr etary
1.5 Career Options
1.6 Rights, Responsibilities and Liabili tiesof Company Secretary
1.7 Exercise
1.8 References
1.0 OBJECTIVES
After studying the unit students will be able to:
Understand Features and Types of Company
Explain Qualities and Qualifications of Company Secretary
Know Appointment procedure, Resign ation and Removal of
Company Secretary
Discuss Rights and Responsibilities of Company Secretary
Describe Liabilities of Company Secretary
Know the Career Options of Company Secretary
1.1INTRODUCTION
The word company refers to association of people comin g
together to achieve some common purpose. A Joint Stock Co m-
pany is a voluntary association of people incorporated under Indian
Comp anies Act , the capital of which is divided into small number of
units which is known as ‘shares’. A person who pu rchases sha res
of company is called ‘Shareholder’. Sharehol ders are the owners of
company because they contribute the capital of company and this
capital remains in the business for the life time of the company.
Shareholders get ‘dividend’ as return on their investme nt in the
company. Shareholders are not in aposition to look after day to day
administration of the Company so they appoint their representativesmunotes.in

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2known as ‘ Directors’. Directors collectively are known as “Board”.
Board of Directors is the representatives of shareholders and ma n-
ages day t o day administration of company.
1.2JOINT STOCK COMPANY
1.2.1 Definition
According to Chief justice Marshall “A corporation is an a r-
tificial being, invisible, intangible and e xisting only in contemplation
of the law. Bei ng a mere creation of law, it possesses only the
properties which the charter of its creation confers upon it either
expressly or as incidental to its very existence.”
According to Sec. 2(20) of Companies Act, 2013 ,“ C o m-
pany means a company incorporated under this Act or under any
previous company law.”
1.2.2 Features o f Joint Stock Company
1)Voluntary Association :A Joint Stock Company is a voluntary
association of people. Any person irrespective of his/her caste,
creed, religion, region etc. can become member. A person can
be a member at his wish and leave membership as and when
he/she wants subject to provision in Articles of Association of
the company.
2)Incorporated Association :A Joint Stock Company is an inco r-
porated association as it is register edunder Indian Companies
Act, 2013. The registration is compulsory in India for every Joint
Stock Company irrespective of its size and nature of business.
3)Artificial Person :A Joint Stock Company is an artificial person
created by law. Just like a natural person, aJoint Stock Co m-
pany can sign (common seal) documents, appoint employees,
purchase or sale a ssets and property and enter into contracts.
4)Independent Legal Entity :A Joint Stock Company can enjoy
separate legal status. Existence of Joint Stock Co mpany is di f-
ferent from its shareholders and directors.
5)Perpetual Succession :A Joint Stock Company has perpetual
succession. The death, insolvency and insanity of any shar e-
holder or director do esnot affect continuity of company. There
is no death of co mpany. However, it can be closed by following
legal procedure stated in the Comp anies Act.
6)Common Seal :A Company cannot sign physically so common
seal can be affixed on all the doc uments of company along withmunotes.in

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3signature of Board of Directors. Common seal is treated as si g-
nature of company. It remains in the custody of Board of Dire c-
tors of co mpany.
7)Limited Liability: The liability of shareholders of company is
limited upto unpaid value of shares. Once the unpaid value of
shares is paid by shareholders, they are not liable to pay any
debts of co mpany out of their personal property.
8)Separation of Ownership and Management :In Joint Stock
Company the ownership and management are different. Shar e-
holders are the owners of company and Board of Directors are
the Managers of company. The shareholders are large in nu m-
ber and spread over wide area. It is not feasible for them to pa r-
ticipate in management of company. So they appoint Board of
Directors as their representatives to look after day to day routine
of co mpany.
9)Huge Membership :The membership of Joint Stock Company
is huge. A private limited company must have minimum 2 me m-
bers and maximum 200 members. A public limited company
must have minimum 7 members and maximum no limit on
membership.
10)Huge Capita l:Joint Stock Company can coll ecthuge capital
due to huge membership. They can collect capital by issue of
shares (owner’s fund) or debentures and bonds (debt fund) .
They also accept public deposits. It obtains loans from banks
and financial instit utions.
11)Transferability of Shares :Though the shares of Private Li m-
ited Company are not freely transferable, the shares of Public
Limited Company are freely transferable in open market. An y-
one who wishes to sell share can do so anytime.
12)Government Control :Functi oning of Joint Stock Company is
controlled by Government. The purpose is to protect interest of
investors. It also helps to control frauds taking place in comp a-
nies and maintain good governance in the functioning of co m-
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41.2.3 Types of Compan ies
I) ON THE BASIS OF INCORPORATION
1)Statutory Company: These companies are incorporated under
special Act passed by the central or state legislative. This co m-
pany functions as per provision of special law. Eg. Reserve
Bank of In dia (RBI), State Bank of India (SBI), Life Insurance
Corporation (LIC), Unit Trust of India (UTI).
2)Registered Company :These companies are incorporated u n-
der the Companies Act, 2013 or any previous company law.
These companies function as per provisions o f Companies Act,
2013.
II)ON THE BASIS OF MEMBERSHIP
1)Private Company: The private company has following features:
Minimum paid up capital as prescribed by its Articles
Prohibits issue prospectus to public for inviting for subscri p-
tion of shares
Minimum 2 m embers and maximum 200 members are r e-
quired .
Restrict transferability of shares.
2)Public Company: The private company has following features:
Minimum paid up capital as prescribed by its Articles
Issue prospectus to public for inviting for subscription of
shares
Minimum 7m e m b e r s and maximum no limit on membe rship.
Freely transferability of shares.
3)One Person Company: The concept of One Person Company
was introduced through the Companies Act, 2013. It is operated
by single promoter who has limited liabili ty. Due to limited liabi l-
ity, this business considered to be better than Sole Trading Co n-
cern. This company can have more than one director and need
not to hold AGM. It is a private limited company and it has to fu l-
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5fill and comply with all the formalities of private company unless
otherwise specified in the Act.
III)ON THE BASIS OF LIABILITY OF MEMBERS
1)Company Limited by Shares: These companies have share
capital and liability of its members is limited upto unpaid value of
shares. At the time of winding up of company members are l i-
able to pay only unpaid value on their shares. Most of the co m-
panies i nIndia are limited by shares.
2)Company Limited by Guarantee: Such companies may or
may not have share capital. At the time of winding up of co m-
pany each member is liable to pay fixed sum of money spec ified
in Memorandum of Association of company to pay the debts
and liabilities of company.
3)Unlimited Liability Company: In this type of company, liability
of members is unlimited. In case company is having debts and
liabilities, the members have to sell their personal property
along with business property to repay debts and liabilities of
companies. Such companies are not very popular among inve s-
tors.
IV)ON THE BASIS OF CONTROL
1)Holding Company: It is company which hold sm o r et h a n5 0 %
of shareholding in another company (Subsidiary Company).
This company controls the management of subsidiary company.
There are2 types of holding company:
By Share Holding: Controls more than 50% of total share
capital either at its own or together with one or more of its
subsidiary companies.
By Management: Controls the composition of Board of D i-
rectors
2)Subsidiary Company :This Company is just opposite to hol d-
ing company. More than 50% of its shares are purchased by
holding company. This company is controlled by holding co m-
pany. Eg. Company ‘B’ is having total 10,000 shares out of
which Company ‘A’ holds 6000 shares. So Company ‘A’ is Hol d-
ing Company and Company ‘B’ is Subsidiary Co mpany.
V)OTHER TYPES
1)Government Company: Government compa ny is the one in
which not less than 51% of paid up share capital is held by:munotes.in

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6The Central Government
State Government
Partly by Central Government and Party by State Gover n-
ment
Subsidiary Company of a Government Company
Government Company may be a private compa ny or public
company. I t is registered under India Companies Act, 2013. Eg. Oil
and Natural Gas Corporation Ltd. (ONGC), Steel A uthority of India
Ltd. (SAIL), Bharat Heavy Electrical Limited (BHEL), Hindustan
Machine Tools Ltd., Coal India Limited et c.
2)Foreign Company: It is a company incorporated outside India
but having a place of business in I ndia whether:
By itself or through an agent, physically or through ele ctronic
mode and
Conducts any business activity in India in any other manner.
Eg. Nest le India Ltd., Bata India Ltd., Whirlpool Corporation etc.
3)Dormant Company: The Companies Act, 2013 has introduced
concept of dormant co mpany which would have adhere to fewer
compliance requirement. It means :
The company has not made any significant accou nting
transactions in last two years or
It has not filed financial statements or annual returns in last
two years.
The ROC may issue notice to such company and enter their
name in register of dormant comp anies.
4)Listed Companies: It is a company which h as any of its secur i-
ties listed on any recognized stock exchange. Its securities are
traded on stock exchange. Such companies have to follow SEBI
guidelines and provisions of the Companies Act.
5)Small Company: A small company is other than a public co m-
pany which has:
Paid up share capital does not exceed Rs. 50 lakh or such
higher amount as may be pr escribed or
Turnover of which its last profit and loss account does not
exceed Rs. 2 crores or such higher amount as may be pr e-
scribed.
6)Associate Company: Itis a company over which another co m-
pany exercises a significant degree of control which is less than
the degree of control exercised over a subsidiary co mpany.
7)Company not for profit (Section 8) :Such companies must o b-
tain license from the Central Govern ment before they are inco r-munotes.in

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7porated. The liability of their member is limited. They need not to
use word ‘limited’ or ‘private’ with their name.
Check your Progress :
Define/explain the following terms
1)Joint Stock Company
2)Private Company
3)Holding Company
4)Listed Company
5)Company Limited by Shares
1.3COMPANY SECRETARY
1.3.1 Meaning and Definition
The company secretary looks after various functions related
to correspondence, meetings and administration which ensures
smooth functioning of the or ganization. He/she is an important off i-
cer of the co mpany.
Company secretary is appointed by the Board of Directors of
company as per provisions of Companies act. He/she acts as a link
between Board of Directors and Shareholders, Employees and ou t-
siders etc.He/she is closely connected with day to day activities of
company ,so his/her views are considered for decision making in an
organization.
Definition of Company Secretary
According to Companies Act 2013 Section 2 (24) “Com-
pany Secretary or Secretary means a Company Secretary as d e-
fined in Clause (c) of Sub -section (i) of Section 2 of the Company
Secr etaries Act 1980 who is appointed by a company to perform
the fun ction of a Company Secretary under this Act.”
The Oxford Dictionary defines secretary a s “A person
whose work is to write for others, e specially one who is employed
to conduct correspondence, keep records and to transact various
other bus inesses for another person or for society, corporation or
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8The Company Secretaries Act, 198 0defines Company
Secretary as –“a person who is a member of Institute of Company
Secreta ries of India.”
1.3.2 Features of Company Secretary
1)An Individual: Only an individual can be appointed as secretary
of a company. A firm, Corporate Body, an instituti on etc. cannot
be appointed as secretary.
2)An Employee :A secretary is a paid employee in the company.
But he/she holds an important pos ition in the organization.
3)Qualification :The secretary of a Joint Stock Company must be
am e m b e ro f Institute of Compan y Secretaries of India (ICSI).
This is essential qualification required to have by Company Se c-
retary. Other qualification required by Company Secretary is
command over language as well as knowledge of office ma n-
agement, correspondence, Account and Finance, Technology
and so on.
4)Qualities :Along with educational qualifications, a secretary
need to have certain qualities such as accuracy, promptness,
tact, courtesy, leadership, loyalty, punctuality, sound judgement
etc.This e nables him/her to discharge his /her duties efficiently.
5)Duties :A company secretary needs to perform various duties
which include correspondence, administration, convening mee t-
ings, statutory functions, assist in formulating policies, financial
functions, providing information etc.
6)Appo intment :The first secretary is appointed by company
promoters. Thereafter, company secretary is appointed by the
Board of Directors of a company by passing resolution in Board
Meeting.
1.3.3 Qualities of Company Secretary
1)Accuracy :Accuracy means correc tness. A company secretary
must be accurate in his/her duties which include drafting letters,
recording minutes, filing documents with government depar t-
ment and so on. Concentration is required for accuracy in work.
2)Adaptability: Adaptability means adjusti ng in changing situ a-
tion. There is frequent change in government policies, ma n-
agement policies and so on. The secretary should adjust hi m-
self/herself with such changes.
3)Courtesy: It implies politeness and kindness. Since secretary
has to deal with many pe ople day in and day out, he/she should
be courteous with them. This helps to create positive impression
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94)Leadership: In order to get work done from subordinates, a
secretary should have leadership qua lity. Secretary should have
the abili ty to guide, advise, inspire and motivate the subordinate.
5)Loyalty: Secretary is custodian of secret information. He/she
should be loyal towards the organization. He/she should not
disclose confidential info rmation to anyone.
6)Punctuality: This quality is related with time management and
refers to doing things at appropriate time. Delay in work can
create bad impression about the organization.
7)Cooperation: The secretary should be able to cooperate and
assist his subordinates in their work. This will enabl e to achieve
objectives of the organization.
8)Orderliness: It means doing the work in a systematic manner.
Secretary should sort out more important and least important
work. He/she should give importance to important work followed
by least important work.
9)Personality: A secretary should have pleasing, impressive and
winning personality. His personality can create cordial and
friendly atmosphere in the organization. Pleasing personality
enables the se cretary to get respect from others.
1.3.4 Qualifications of Company Secretary
1)Educational Qualification: A company secretary must be the
member of the Institute of Company Secretaries of India (ICSI).
This is the basic essential qualification required to be a co m-
pany secretary. In addition, he may have members hip of the I n-
stitute of Chartered Accounts of India (ICAI )or Membership of
the Institute of Cost and Works Accounts of I ndia (ICWA).
2)Other Educational Qualification: Along with basic educational
qualifications a secretary should also possess other educa tional
qualification to discharge his/her function and duties efficiently.
Other educational qualifications are as follows:
General Education: Secretary should have Masters’ Degree
in Economics, Commerce or Law.
Legal Knowledge: A secretary should be well versed with
provisions of various acts such as Income Tax, Sales Tax ,
Stamp Duty, Minimum Wages Ac t, Contract Act, Sale of
Goods Act, N egotiable Instruments Act etc.
Command over Language: The secretary has to commun i-
cate with members, government officers , visitors, press r e-
porters etc. So he/she should have command over English
and other r egional language both in oral and written form.munotes.in

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10Knowledge of Accounting and Finance: The secretary
should have knowledge of Balance sheet and Profit and
Loss account. He /she should also have knowledge of fina n-
cial planning and financial management of his/her company.
Knowledge of Office Management: Secretary should have
complete knowledge about office management which is us e-
ful for planning, organizing, coordinating, dire cting, staffing,
controlling etc. He/she should also know drafting, filing, r e-
cord keeping, assig ning work and so on.
Knowledge of Human Relations: Secretary has to deal
with the directors, shareholders and the outsiders. He/she
must know how to deal with them. In short, he/she need to
have knowledge of human psychology.
Knowledge of Technology Application: These days IT is
used extensively for varied purpose in an organization. The
company secretary should have knowledge of techno logy to
brings acc uracy, s peed and decency in the office work.
1.4 APPOINT MENT PROCEDURE, RESIGNATION
AND REMOVAL OF CO MPANY SECRTARY
1.4.1 Procedure o fA p p o i n t m e n t
Following is the procedure of Appointment of Company Secretary :
1)Board Meeting: ABoard meeting isconvened anddetails ofshort
listed candidates forthepost ofCompany secretary isplaced before
Board meeting .After considering allapplications, asuitable cand i-
date isselected andBoard Resolution forAppointment ofCompany
Secretary ispassed. Formal appointment letter isissued totheper-
sonfinally selected.
2)Filing Return ofAppointment ofCompany Secretary: Inthis
stage, areturn ofappointment ofcompany secretary isfiled with
Registrar ofCompanies (ROC) inForm DIR-12within 30days from
theappointment .Form MGT -14isalso required tobefiled along
withfees. This form includes details such asparticulars ofcompany
secretary, PAN No., membership number, address, date ofap-
pointment andsoon.
3)Making entry in the Register of Key Managerial Personnel
(KMP) :Details ofCompany Secretary must berecorded inthereg-
ister ofKeyManagerial Personnel (KMP).
4)Intimation to Stock Exchange: Ifsuch company islisted then it
should give intimation toalltheStock Exchange where thecom-
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111.4.2 Resignation and Removal o f Company Secr etary
The comp any secretary can resign by giving notice as per
terms and conditions of service agreement. The secretary can r e-
sign due to persona reasons or unfavourable working cond itions.
The Board of Dire ctors may also remove the secretary by serving
notice to him/her by following a procedure.
The procedure for Removal / Re signation of Company
Secr etary
1)Board Meeting: Board meeting is convened for final decision
on resignation / removal of co mpany secretary. A resolution is
passed by the Board.
2)Filing of Form DIR -12:Form DIR -12 in electronic mode is filed
within 30 days with Regi strar of Companies along with fees.
3)Intimation to Stock Exchange: The stock exchange where
share of the company a re listed, is required to be informed
about resignation / removal of secretary.
4)Entries in the Register: Entry is made in the Register
maintained for recording the particulars of Company Secretary
under Section 170 of Companies Act.
5)Issue of General Notice: The Company may issue general
public notice informing regarding removal / resignation of
secretary.
6)Filing of Vacancy: A Board meeting is convened to filing of
vacancy of secretary within 6 months from the date of such
vacancy.
1.5 RIGHT S, RESPONSIBILITIES AND LIABILITIES
OFCOMPANY SECRETARY
1.5.1 Rights of Company Secretary
Company Secretary is a senior level officer. He enjoys the rights
as per the agreement signed by him with the Company. Some
rights areas follows:
1)As a senior level officer Company Secretary can supervise, co n-
trol and direct subordinate o fficers and employee.
2)A Company Secretary can sign any contract /agreement on b e-
half of the company as a principle officer of a company, subject
to the delegation of power by the boar d of the co mpany.
3)Company Secretary can issue guidelines for the employees on
behalf of the company.
4)Company Secretary can attend meeting of shareholders and the
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125)During Winding up he can claim his legal dues as a preferential
creditor of a company.
6)He can sign and authenticate the proceeding of meetings
(Board, Annual general or extra ordinary general meeting) and
other documents on behalf of the company where common seal
is not required.
7)Company Secretary is a Compliance Offi cer and he has a right
to blow whistle whenever he finds the conduct of the officers or
of the directors of the company are detrimental to the interest of
the company.
1.5.2 Responsibilities o f Company Secretary
1)According to Company Act:
To sign documents and proceedings requiring authentication
by the company.
To deliver return of allotment the Registrar.
To give notice to registrar for increase in the share capital.
To deliver share certificate of allotment within 2 months after
transfer.
To make entry for register of members of the share warrant.
To send annual return
To send notice of general meeting to every member of the
company.
To make statutory books
To sign every balance sheet and P/L accounts in case of a
non-banking financial co mpany.
To prepa re minutes of every General Meeting and Board
Meeting within 30 days
To file a resolution with the registrar.
2)According to IT Act:
To ensure proper income tax is deducted at source from the
salary of employees
To see that the certificate of TDS is issued.
To ensure that the tax deducted is deposited to government
treasury
To submit and verify various forms and returns
3)Under Indian Stamp Act:
To see that the documents like letter of allotment and share
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134)Under other Act:
To comply with other acts such as FEMA, Minimum Wages
Act, Industrial Dispute, E mployee State Insurance Act etc.
5)General Responsibilities:
To comply with internal regulations and legislation
Duty to exercise due care and diligence
To draft director repor t
Maintaining the statutory registers of the company
Ensuring Board decisions are properly communicated
Registration of share transfers and issuance of related share
certificates
Communicating with company shareholders
Safe custody of common seal
Certifyi ng documents such as Certificate of Incorporation,
Memorandum and Articles of Ass ociation
Giving legal advice to Directors
To act as an information link
1.5.3 Liabilities of Company Secretary
Statutory Liabilities
1)Filing the return o fallotment
2)Deliverin gshare certificate / Debenture certificate on time
3)Filing annual return
4)Holding Annual General Meeting (AGM)
5)Recording minutes of the meeting
6)Providing the P/L account and Balance sheet at AGM
7)Provide notice about Board Meeting
8)Maintain the register of me mbers
Contractual Liabilities
1)He/she is liable for any negligence on part of his duty. He /she
may be dismissed.
2)He/she must not do anything beyond his authority, if he /she
does he will be personally l iable for loss.
3)He/she is under the obligation to not d isclose any secret info r-
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144)He/she is liable for any secret profits made by him /her on a c-
count of his position
5)If the company secretary commits any fraud, he /she must i n-
demnify to the company for any loss occurred .
1.6CAREER OPTIONS
A career as a Company Secretary isfinancially rewarding
and pre stigious. The Institute of Company Secretary of India (ICSI)
is the only recognized professional body in India to develop and
regulate the profession of Company Secretary. If a person has
good judg emental quality, legal aptitude, interest in current affairs
and good administrative policy, then company secretary is an ideal
career for such person.
1.Opportunities in Employment
A qualified company secretary can find good positio ns in the
private sector as well as in public sector, banks and financial instit u-
tions. There is also opportunity in stock exchanges, the Department
of Co mpany Affairs, Company Law Board and various government
departments. There is a statutory requir ement for appointment of
company secretaries in listed companies.
Membership of ICSI is recognized for appointment to sup e-
rior posts and services under Central Government. It is also reco g-
nized for recruitment from Grade I and Grade IV in the A ccounts
branch of the Indian Company Law Service. Almost every kind of
organization whose affairs are conducted by Board, Councils or
other associ ation, federation, authority, commission etc. appoint
Company Se cretary in a Key Administrative Position.
2.Role in the Company
The company secretary is an in -house legal expert and a
compliance officer of the Company. He/she is an expert in corp o-
rate laws, securities laws and capital market and corporate gover n-
ance. He is the chief advisor to the Board of Director on best pra c-
tices in corporate gover nance and is responsible for all regulatory
compliances of company. He/she is known as a co rporate planner
and strategic manager. He has direct access to the top manag e-
ment and the board room.
They have to manage all aspects of corpo rate meeting be it
Board Meeting, Annual General Meeting, i nteraction with important
clients and vendors, meetings with government and private deleg a-
tions. They may also have to take up the responsibility to manage
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15Asan additional responsibility, company secretary also have
to keep a discerning eye on the expansion opportunities of the
company. Further, they have to take care of collaborations, joint -
ventures, mergers, takeovers within the country and outside.
Under the newly passed Companies Act, 2013, the
Company Secretary has been aptly bracketed in the Company’s
‘Key M anagerial Personnel’.
3.Option of going into practice
After obtaining a ‘Certificate of Practice from the Institute,
Members of the Institute c an opt for independent practice. Right
from the i ncorporation of a company till the time it is wound -up, a
company will require the services of a practicing company secretary
at some stage or the other.
Pursuant to Clause 49 of the Listing Agreement of s tock e x-
changes, Practicing Company se cretary has also been authorized
to issue certificate regarding compliance of conditions of Co rporate
Governance as stipulated in the Clause.
Practitioners have also been recognized to appear before
various tribunals such as Company Law Board, the Securities A p-
pellate Tribunal, Consumer Forum, Tax Tribunals etc. The R eserve
Bank of India has also recognized the Practicing Company Secr e-
taries to undertake Diligence Report for Banks.
A practicing company secretary is an independent profe s-
sional and is recognized to issue ce rtificates and attend documents
inter alia under the Companies Act, the SEBI Act, Securities Co n-
tracts and Regulation Act (SCRA), and Regulations made there u n-
der, the Depositories Act, the EXIM Policy etc.
4.Opportunities abroad for CS
Many company Secretaries are already working in various
countries like the US, Canada, UK, Singapore, Malaysia, Thailand,
Australia, New Zealand, Middle -East, Africa etc. With their research
and legal bent of mind, their employers have recognized their pr o-
fessional skill sets. They also possess managerial capabilities and
analytical skills.
After the globalization of services through WTO and GATS,
the field is opening in various countries for practicing company se c-
retarie sa sw e l l .I n d i ai se n t e r i n gi n t ob i l a t e r a lA g r e e m e n t sw i t h
countries like Singapore, Malaysia, Thailand and Mauritius etc.
These agreements recognize Company Secretary for free mov e-
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16ICSI has entered into aMoU with the Institute of Chartered
Secretaries and Administrators, UK. This MoU recognizes Co m-
pany Secretaries of both the countries on certain conditions. The
process of globalization and the process of comprehensive ec o-
nomic cooperation that India is initiating has also set in motion m u-
tual recognition agreements between the ICSI and Institutes go v-
erning the pr ofession in various other countries. This is opening up
the world to Company Secretaries.
1.7 EXERCISE
FILL IN THE BLANKS
1)Joint Stock Company is a ________ _____ (Voluntary Associ a-
tion, Incorporated Associ ation, Both)
2)Shareholders are _________ of Joint Stock Company. (Cred i-
tors,Debtors ,Owners )
3)_________ are appointed by shareholders to look after day to
day administration of the company. (Promoters ,Direc tors,Sec-
retary )
4)_________ Company is incorporated outside India but having a
place of business in India. ( Foreign ,G o v e r n m e n t ,D o r m a n t )
5)The Secretary is a ______________ in a company .(Paid E m-
ployee, Owner, None of these)
6)A Company Secretary must be the m ember of the
_______________ ( ICSI, WTO, EU )
7)A secretary requires to have _____________ quality. (Accuracy
and Orderliness, Leade rship and Cooperation, Both)
8)________________ is a right of Company Secretary. (Supe r-
vise and Direct subordinates, Default in f iling the return of allo t-
ment, Failure to maintain register of members.
ANSWER IN BRIEF
1)Define Joint Stock Company .E x p l a i ni t s features .
2)What are the different types of Companies as per Companies
Act, 2013? .
3)Discuss qualities required by a company secret ary.
4)Explain qualification required by a company secretary.
5)Briefly explain appointment procedure of company secretary.
6)Write note on Resignation and Removal of Company Secretary.
7)What are the rights of Company secretary?
8)Highlight responsibilities of comp any secretary.munotes.in

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179)Discuss the liabilities of Company Secretary.
10)Write note on Career options of Company Secretary.
1.8REFERENCES
https://www.caclubindia.com/articles/company -secretary -cs-as-a-
career -option -20512.asp
https://bbamantra.com/company -secretary -introduction/
https://freebcomnotes.blogspot.com/2017/03/company -secretary -
qualification -rights.html
Maharashtra State Board –Secretarial Practice –Std. XI textbook
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2
COMPANY SECRETARY PRACTICES
Unit structure:
2.0 Objectives
2.1 Introduction toAdvisory Services of Company Secretary
2.2 Secretaries asaLiaison Officer between Company and
Stock Exchange
2.3 Representation Services of Company Secretary atD i f f e r ent
Forums
2.4 Cyber Law Ccompliance
2.5 Secretarial Standards by ICSI, Secretarial Standards -1-10
2.6 Secretarial Audit –Procedure and Stages, Need and
Importance, Scope
2.7 Summary
2.8 Exercise
2.0 OBJECTIVES:
After studying the unit the studen ts will be able:
To explain the role of Company Secretary as an liaison office r
To explain about Representation Services of Secretary at
different forums
To explain the Secretarial Standards by ICSI, Secretarial
Standards -1-10.
To explain Secretarial Audit –Procedure and Stages, Importance
and scope
2.1INTRODUCTION TO ADVISORY SERVICES OF
COMPANY SECRETARY:
Company secretary is regarded as a liaison officer. Company
secretary is mainly responsible for looking after the secretarial works.
He general ly maintains liaison with the board of directors, employees,
shareholders, and other outside parties. Now a days, company
secretary is one of the most important persons who perform some
specified duties in the company form of business.
The educational bac kground, knowledge, training and
exposure that a Company Secretary acquires makes him a versatile
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companies of all sizes, other commercial and industrial
organizations, small scale units, firms etc.
Services rendered by Practising Company Secretary are as
follows :
Promotion, formation and incorporation of companies, and
matters related therewith including choice of type of company,
availability of name, drafting of Memorandum and Articles o f
Association and other documents, their stamping and registration
with the Registrar of Companies.
2.2 SECRETARIES AS A LIAISON OFFICER
BETWEEN COMPANY AND STOCK EXCHANGE :
2.2.1 Secretaries asaLiaison Officer between Company and
Stock Exchange
Service s under the Securities Exchange Board of India Act, 1992
are as follows -
1.Complete support, certifications and assistance in the
implementation and compliance of Listing Agreement.
2.Complete support and advisory services for Listing and delisting
of Shares from the Indian and Foreign Stock Exchanges.
3.Complete support, advisory & transaction services to companies
in implementing Regulations, notifications, circulars and orders of
SEBI issued under SEBI Act 1992.
4.Complete support in drafting replies to Show Ca use notices
issued by SEBI and making representation before the
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5.Filing Appeal against the orders of SEBI in Securities Appellate
Tribunal and allied services.
2.2.2 Secretaries as a Liaison Officer between Company and
Deposit ory Participant s
Depository is an institution or a kind of organization which
holds securities with it in DeMat form, in which trading is done among
shares, debentures, mutual funds, derivatives, F&O and
commodities. The intermediaries perform their actio ns in variety of
securities at Depository on behalf of their clients. These
intermediaries are known as Depositories Participants (DPs).
Fundamentally, There are two sorts of depositories in India.
One is the National Securities Depository Limited (NS DL) and the
other is the Central Depository Service (India) Limited (CDSL). Every
Depository Participant (DP) needs to be registered under this
Depository before it begins its operation or trade in the market.
Depository provides its services to investors through its agents
called depository participants (DPs). These agents are appointed by
the depository with the approval of SEBI. According to SEBI
regulations, among others, three categories of entities i.e. Banks,
Financial Institutions and Members of Sto ck Exchanges registered
with SEBI can become DPs. Depository Participant is described as
an Agent of the depository. They are the intermediaries between the
depository and the investors. The relationship between the DPs and
the depository is governed by an agreement made between the two
under the Depositories Act. In a strictly legal sense, a DP is an entity
who is registered as such with SEBI under the sub section 1A of
Section 12 of the SEBI Act.
Company Secretary acts as Compliance Officer and ensures
compliance with SEBI (Prohibition of insider Trading) Regulations,
1992 including maintenance of various documents., Securities
Compliance and Certification Services, Compliance with rules and
regulations in the securities market particularly, Internal Aud it of
Depository Participants , Certification under SEBI (DIP) Guidelines,
Audit in relation to Reconciliation of shares, Certificate in respect of
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2.2.3Secretaries as a Liaison Officer between Company and
Registrar of Company:
The Registrar of Companies (ROCs )is an office under the
Indian Ministry of Corporate Affairs that deals with administration of
the Companies Act 1956 and Companies Act2013. These officers
are from Indian Corporate Law Ser vice cadre. There are currently
22 Registrars of Companies operating from offices in all major
states of India. Some states, such as Maharashtra and Tamil Nadu,
have two R egistrars ofCompanies each. Section 609 of the
Companies Act, 1956 tasks the ROCs wi th the primary duty of
registering companies.
The office of the ROC maintains a registry of records related to
companies registered with them, and permits the general public to
access this data on payment of a fee. The Registrar of Company
takes care of c ompany registration (also known as incorporation) in
India, completes reporting and regulation of companies and their
directors and shareholders, and also oversees government
reporting of various matters including the annual filling of various
documents.
Role of company secretary has a great importance in every
stage of company formation. A secretary plays av i t a lr o l ef o r
company before incorporation and after incorporation. Secretary
submit snecessary forms and documents to the registrar of Joint
Stoc kC o m p a n y for getting certificate of incorporation .Heprepare s
Memorandum and Articles of Association. He c collects certificate of
commencement from the registrar of Joint Stock Company and
arrange statutory meeting .Heprepares statutory report and file sthe
copy of such report with the registrar of the company. Preparation ,
validation and filing of resolutions, agreements, document s, notices
and various returns with the company Registrar are some of the
important work done by Company Secretary an liaison officer
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2.3REPRESENTATION SERVICES OF COMPANY
SECRETARY AT DIFFERENT FORUMS :
Company Secretary is a vital link between the company and its
Board of Directors, shareholders, government and regulatory
authorit ies. He ensures that Board procedures are both followed and
regularly reviewed and provides guidance to Chairman and the
Directors on their responsibilities under various laws. He commands
high position in the value chain and acts as conscience seeker of t he
company. He represents on company’s behalf on various forums.
1.Corporate Laws Advisory Services :
Advising companies on Compliance of legal and procedural
aspects, particularly under SEBI Act, SCRA and rules and
regulations made there under Foreign Exc hange Management Act,
Consumer Protection Act, Depositories Act , Environment and
Pollution Control Laws ,Labour and Industrial Laws , Co -operative
Societies Act , Mergers and Amalgamations and Strategic Alliances ,
Foreign Collaborations and Joint Venture s ,Setting up subsidiaries
abroad, Competition Policy and Anti Competitive Practices, IPR
Protection, Management, Valuation and Audit , Drafting of Legal
documents etc.
2.Representation Services:
Company Secretary’s representation services include Corporate
Laws Advisory and Representation Services. It also includes
Financial Market Services .
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3.Financial Market Services :
Public Issue, Listing and Securities Management, Adviser
/consultant in issue of shares and other securities, Preparation of
Projec ts Reports and Feasibility Studies, Syndication of Loans from
banks & financial institutions, Loan Documentation , Listing of
securities/ delisting of securities with recognized stock exchange,
Ensuring compliance of the Takeover Regulations and any other
laws or rules as may be applicable in this regard etc .
4.Finance and Accounting Services :
Internal Audit, Secretary to Audit Committee, Working capital
and liquidity management, Determination of an appropriate capital
structure, Analysis of capital investme nt proposals, Budgetary
controls, Accounting and compilation of financial statements etc.
5.Taxation Services :
Advisory services to companies on tax management and tax
planning under Income Tax, Excise and Customs Laws ,
Preparing/reviewing various returns and reports required for
compliance with a the tax laws and regulations etc.
6.International Trade and WTO Services :
Advising on all matters related to IPRs and TRIPs Agreement of
WTO, International Commercial Arbitration, Advising on and issuing
certifi cates on EXIM Policy and Procedures, Advising on Intellectual
Property , licensing and drafting of Agreement, Acting as registered
Trade Mark Agent etc.
7.Management Services:
Advising on Legal Structure of the organization, Acting as
management representat ive to obtain ISO Certification ,Corporate
Communications and Public Relations ,Communication with
stakeholders, Advisory services for Brand equity and image building,
Manpower planning and development, Performance appraisal,
Motivation and remuneration st rategies ,Industrial relations ,work
studies and performance standards, Advising on industrial and
labour laws , Information Technology, Compliance with cyber laws,
Conducting Board Meetings through video -conferencing and
teleconferencing, Advising on soft ware copyright and licensing ,
Development of management reports and controls, Maintenance of
statutory records in electronic form ,Sending notices to shareholders
by electronic mode ,Filing of forms/documents in electronic form with
Registrar of Companies and other statutory authorities etc.
8.Company Law Board, Consumer Forum, S EBI, Arbitration &
Conciliation Services :
Company Secretary represents on behalf of a company before
Company Law Board, National Company Law Tribunal, Competition
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Companies, Consumer Forums, Tax Authorities ,Other quasi -judicial
bodies and Tribunals etc. He also plays important role in arbitration
and Conciliation.
2.4 CYBER LAW COMPLIANCE :
Asweknow that open -source license is a type of license for
computer software and other products that allows the source code,
blueprint or design to be used, modified and/or shared under defined
terms and conditions. Usage of open source content in a sensitized
manner is critic al for any business and needs utmost care to handle it
in right way. Software audit is the need of the hour. It includes :
1.Software Licensing Agreements (Drafting & review)
2.Information Security & Cyber security Policy
3.Software (High -Level/Design) Audit
4.Compliance to IT Act,
5.User Data Privacy Compliance,
6.Data Transfer Compliance,
7.GDPR Compliance,
8.Black -box (manual) testing from Legal Perspective.
9.Websites Audit
10.Litigation pertaining to IT Act
The company secretary is responsible for the efficient
administ ration of a company, particularly with regard to ensuring
compliance with Cyber Law, statutory and regulatory requirements
and for ensuring that decisions of the board of directors are not
against the present Cyber Law. To ensure this Software audit must
be done periodically .
2.5SECRETARIAL STANDARDS BY ICSI,
SECRETARIAL STANDARDS -1-10:
In order to have uniformity in the practices adopted by different
companies, the Institute of Company Secretaries of India (ICSI) has
released 10 secretarial standard s including standard on board
meeting, dividend and transmission of shares. Company Secretary
should excel in new areas like corporate restructuring, insolvencies,
mergers, amalgamations, international tax planning, GST etc. Here's
a list of Secretarial St andards:
SS-1 : Secretarial Standards on Meeting of Board of Directors.
SS-2 : Secretarial Standards on General meetings.
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SS-4 : Secretarial Standards on Registers and Records.
SS-5 : Secretarial Standards on Minu tes.
SS-6 : Secretarial Standards on Transmission of Shares and
Debentures.
SS-7 : Secretarial Standards on Passing Resolutions by Circulation.
SS-8 : Secretarial Standards on Affixing of common seal.
SS-9 : Secretarial Standards on Forfeiture of Shares.
SS-10 : Secretarial Standards on Board's Report.
Out of the above mentioned Secretarial Standards, only 3 are
effective as on till date, they are: -
SS-1 Secretarial Standard on Meetings of the Board of Directors.
SS-2 Secretarial Standard on General Meeti ngs.
SS-3 Secretarial Standard on Dividend .
2.6SECRETARIAL AUDIT –PROCEDURE AND
STAGES, NEED AND IMPORTANCE, SCOPE :
Secretarial Audit is a compliance audit .I ti sa part of total
compliance management in an organization. Ithelps to detect
noncomplian ce and to take corrective measures. Secretarial Audit is
a process .It is done t o check compliance with the provisions of
various laws and rules/ regulations/procedures, maintenance of
books, records etc., by an independent professional .I ti sd o n et ot o
make sure that the legal and procedural requirements are complied
with the legal and procedural requirements and also followed
dueprocesses.
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2.6.1Secretarial Audit Report :
The Secretarial Auditor expresses an opinion as to whether
there exist adequate systems and processes in the company
commensurate with the size and operations of the company to
monitor and ensure compliance with applicable laws, rules,
regul ations and guidelines. Secretarial Audit helps to detect the
instances of non -compliance and facilitates taking corrective
measures. Itthus provides necessary comfort to the management,
regulators and the stakeholders, as to the statutory compliance,
good governance and the existence of proper and adequate
systems and processes.
2.6.2 Scope of Secretarial Audit :
Secretarial Audit is to be on the principle of “Prevention is better
than cure” rather than post -mortem exercise and to find faults. It
acts as a n effective compliance risk management tool or a
governance tool. The benefits of Secretarial Audits are available to
all stakeholders including promoters, executive directors, officers of
the company, regulators, government authorities, investors,
financi al institutions, banks, creditors etc.
Reporting on the compliance of five laws as mentioned :
a)Companies Act, 2013 and the rules made there under;
b)Securities Contracts (Regulation) Act, 1956 (‘SCRA’), and the
rules made there under;
c)Depositories Act, 1996, and the rules made there under;
d)Foreign Exchange Management Act, 1999 and the rules and
regulations made there under to the extent of Foreign Direct
Investment, Overseas Direct Investment, and External
Commercial Borrowings;
e)Regulations and Guidelines pre scribed under the Securities and
Exchange Board of India Act, 1992 (‘SEBI Act’) .
2.6.3Reporting on the compliance of secretarial standards
issued by the Institute of Company Secretaries of India :
1.Reporting on Compliance with the Listing Agreement;
2.Report ing on compliance of ‘Other laws as may be applicable
specifically to the company which shall include all the laws which
are applicable to specific industry for example for Banks -all laws
applicable to Banking Industry; for insurance company -all laws
applicable to insurance industry etc.
3.Examines and reports regarding the adequacy and efficiency of
the systems and processes with other laws.
4.Monitor sand ensure scompliance with general laws like labor
laws, competition law, environmental laws.
5.Examines an d reports on the specific observations or
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Board Structures/system and processes relating to the Audit
period.
6.Secretarial Auditor may rely on reports given by statutory
auditors or other desig nated professionals to check compliance
with other laws like Income Tax, Customs, GST etc.
2.6.4 Process of Secretarial Audit :
Secretarial Auditor or the firm of Secretarial Auditors shall
provide the checklist for carrying out the secretarial audit of the
company depending upon the nature of business activities carried
on by the Company .
2.6.5 Objectives of Secretarial Audit: -
1.To verify and report on compliances of applicable laws and
Secretarial Standards
2.To point out non -compliances and inadequate c ompliances;
3.To protect the interest of various stakeholders i.e. the customers,
employees etc;
4.To avoid any unwarranted legal actions/penalties by law
enforcing agencies and other persons as well.
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2.6.5 Benefits of Secretarial Audit:
Benefits are m anifold and its beneficiaries are many. Secretarial
audit enables Legal Compliance Management .Ever increasing
complexities of Laws and responsibilities of Directors make it
imperative .Secretarial Audit helps to detect the instances of
non-compliance and facilitates taking corrective measures. It audits
the adherence of good corporate practices by the company.
Following are the points which indicates the benefits of Secretarial
Audit.
1.Secretarial Audit assures the promoters of a company that those
in-charge of its management are conducting its affairs in
accordance with the requirements of laws and the owners ‟
stake is not being exposed to unintended risk.
2.It helps the companies to build their corporate image.
3.Secretarial Audit provides comfort to the Non -executive/
Independent Directors that appropriate mechanisms and
processes are in place to ensure complian ce with laws
applicable to the company, thus mitigating any risk from a
regulatory or governance perspective.
4.Secretarial Audit helps the investors in taking informed
investment decision, as it evaluates the company in terms of
compliance and governance no rms being followed by the
company.
5.The Secretarial Audit provides an in -built mechanism for
enhancing corporate compliance generally and help restore the
confidence of investors in the capital market through greater
transparency in corporate functioning.
2.6.6 The need for Secretarial Audit:
1.It is an effective mechanism to make sure of the compliance with
the legal and procedural requirements.
2.It provides a level of confidence to the directors and Key
Managerial Personnel etc.
3.Secretarial Audit ensures leg al and procedural requirements. So
directors can concentrate on important business matters.
4.Itstrengthens the goodwill of a company for their regulators and
stakeholders.
5.Secretarial Audit is an effective governance and compliance risk
management tool.
6.Ithelps the investor in analyzing the compliance level of
companies, thereby increases the reputation.
2.6.7 Conclusion:
Secretarial Audit is an independent, objective assurance
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helps to ac complish the organization’s objectives by bringing a
systematic, disciplined approach to evaluate and improve the
effectiveness of risk management, control, and governance
processes.
2.7SUMM ARY:
Company secretary is regarded as a liaison officer. He ge nerally
maintains liaison with the board of directors, employees,
shareholders, and other outside parties. Now a days, company
secretary is one of the most important persons who perform some
specified duties in the company form of business. Company
Secreta ry acts as Compliance Officer and ensures compliance with
SEBI (Prohibition of insider Trading) Regulations, 1992 including
maintenance of various documents, Securities Compliance and
Certification Services etc. In order to have uniformity in the practices
adopted by different companies, the Institute of Company
Secretaries of India (ICSI) has released 10 secretarial standards
including standard on board meeting, dividend and transmission of
shares. Secretarial Audit is to be on the principle of “Prevention is
better than cure” rather than post-mortem exercise and to find faults.
It acts as an effective compliance risk management tool or a
governance tool.
2.8EXERCISE
1.Discuss the Advisory Services of Company Secretary.
2.Explain the role of Secretary as an liaison officer between
Company and Stock Exchange .
3.Explain the role of Secretary as aliaison officer between Co.and
Depository Participant s.
4.Explain the r representation Services of Company Secretary at
different forums .
5.Discuss the Secretarial St andards by ICSI .
6.What do mean by Secretarial Audit .Explain the importance of
Secretarial Audit?
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COMPANY DOCUMENTATION AND
FORMAT IONI
Unit Structure
3.0 Objectives
3.1 Introduction
3.2 Memorandum of Association (MOA)
3.3 Articles of Association (AOA)
3.4 Distinction between Memorandum and Articles of Association
3.5 Prospectus
3.6 Statement inLieuof Prospectus
3.7 Misleading Prospectus
3.8 Distinction between Prospectus and Statement inL i e u of
Prospectus
3.9 Company Formation –Stages and Secretarial Duties
3.10 Conversion ofC o m p a n i e s
3.11 Summary
3.12 Exercise
3.13 References
3.0 OBJECTIV ES
After studying the unit students will be able to:
Understand and discuss Concept of Memorandum of
Association, its clauses and alteration
Understand and discuss Concept of Articles of Association and
its content
Understand and discuss Concept of Prosp ectus and Statement
in Lieu of Prospectus
Explain stages and secretarial duties in company formation
Know Secretarial Procedure involved in conversion and
reconversion of public and private company
3.1INTRODUCTION
A Joint Stock Company is an artificial entity created by Law
by registering under Companies Act. Formation of Joint Stock
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31the Registrar of Companies as per the provisions of Companies
Act, 2013 .The process of formation gets comp leted once these
documents are approved by the Registrar. Important company
documents are Memorandum of Association (MOA), Articles of
Association (AOA) and Prospectus / Statement in Lieu of
Prospectus. Company promoters play an important role in
preparati on of these documents and formation of company.
3.2MEMORANDUM OF ASSOCIATION (MOA)
3.2.1 Meaning and Definition
MOA is the charter of the company .It is treated as the constitution
of the company. Itdefin es the scope of its activities. It contains th e
rights, privileges and powers of the company. MOA establishes the
relationship of the company with the members. The whole business
of the company is built up according to Memorandum of
Association. A company cannot undertake any business or activity
notstated in the Memorandum. It can exercise only those powers
which are clearly stated in the Memorandum. Preparation of MOA is
the first step in formation of a company. It is prepared by promoters
and submitted to the Registrar for the incorporation of a co mpany.
Lord Cairns defines “Memorandum of Association is the
fundamental document of the company. It is foundation on which
structure of company stands. It lays down limitations of its
activities.”
As per Section 2 (56) of the Companies Act, 2013 states
Memorandum means the memorandum of association of a
company as originally framed or as altered from time to time in
pursuance of any previous company law of this Act.
3.2.2 Clauses of Memorandum ofA s s o c i a t i o n
1.Name Clause: It is the first clause of MOA .A company is free
to select any name it likes. But the name should not be identical
or similar to that of a company already registered. It should not
also use words like King, Queen, Emperor, Government Bodies
and names of World Bodies like U.N.O., W.H.O ., World Bank
etc. A company name should end with the word ‘limited’ in case
of a public limited enterprise, and ‘private limited’ in the case of
ap rivate limited enterprise. Eg.‘ABC Private Limited’ in case
of the private company, and ‘ABC Ltd’ for a p ublic company.
2.Domicile Clause: The memorandum must mention the state in
which registered office of the company is situated. The domicile
clause will not exactly contain the address of the registered o f-
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32of the company is located. The registered office of a company
can be shifted from one place to another within the town with a
simple intimation to the Registrar. Whereas, to shift the regi s-
tered office to other state, Memorandum should be altered a c-
cordingly.
3.The Object Clause :This is the most important clause. Itstates
the objects of the company for which the company is proposed
to be incorporated. The company is not legally entitled to do any
business other than specified in object cl ause. This clause e n-
ables general public to know the purpose for which capital is
raised by company. It enables to know the extent of powers of
company. The o bjects are divided into three subcategories :
Main Objective : It states the main business of the c ompany.
Incidental or Ancillary :These object s are ancillary to the
attainment of the main objects of the company
Other objectives: Any other objects which the company
may pursue and are not covered in above (a) and (b)
4.Liability Clause: The liability cl ause declares the liability of
members of the company to be either limited or unlimited. The
MOA of the company limited by shares must declare that the
liability of the members of the company is limited. The M OAof a
company limited by guarantee must state the amount of co n-
tribution that every member agrees to contribute to the assets of
the company in the event of the company being wound
up.However, in case of aunlimited company ,t h el i a b i l i t yo fd i-
rectors or managers of a company may be unli mited, if specified
in the memorandum.
5.Capital clause: This is valid only for companies having share
capital. These companies must specify the amount of Authorized
capital divided into shares of fixed amounts. Further, it must state
the names of each member and the number of shares against
their names. It is usually expressed as “the share capital of co m-
pany is Rs. 100 crores, divided into 100 lakh equity shares of
Rs. 100/ -each’. The company should decide its authorized capital
after considering its long term financial needs. The company can
issue different types of shares to raise the cap ital from market.
6.Subscription (Associatio n)Clause: This clause contains dec-
laration by the subscribers to the MOA that they are desirous of
forming themselves into a company . The subscribers to the
Memorandum must take at least one share (qualification
shares) .T h em i n i m u mn u m b e ro fm e m b e r si st wo in case of a
private company and seven in case of a public company. Sign a-
tures shall be attested by witnesses. Each subscriber must put
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333.2.3 Format o fMemorandum o fA s s o c i a t i o n
Have a look on format of MOA of ‘Godrej Consumer Products Ltd.’at
http://www.godrejcp.com/Resources/uploads/codes -and-
policies/MemorandumandArticlesofAssociation.pdfMEMORANDUM OF ASSOCIATION
Section 14 Table B
1.Name Clause :The name of company is ‘J.P. CEMENT
LIMITED’
2.Domicile Clause :The registered office of the company will be
situated in Maharashtra
3.Object Clause :MainO b j e c t : The main object for which the
company is established is ‘Manufacturing of
Cement’. Incidental Object: The object
incidentals of above main objects are
acquisition and setting up of machinery,
marketing of finished products etc. Other
Object:Theother object for which company is
established are manufacturing of steel and steel
related products.
4.Liability Clause :The liability of members is limited
5.Capital Clause :The share capital of company is Rs. 100
crores, divided into 100 lakh equity sha res of
Rs. 100/ -each.
6.Subscription Clause :We, the several persons, whose names and
address are subscribed are desirous of being
formed into a company in pursuance of this
Memorandum of Association, we respectively
agree to take the number of shares in t he
capital of company set opposite our respective
names.
Name and Address of
SubscribersNumber of Shares
taken by each and
their SignatureWitness to the
Signature
1200
1000
1500
18001.Mr. Shridhar Joshi, Mumbai
2.Mr. Ajay Rao, Pune
3.Mr. Sunil Jain, Thane
4.Mr. Bharat Soni, M umbai
5500Mr. A. S. Rane
Dated at ____ (Place) _______ the____ (Day) __ day of ___ (Date &
Month) __2019.
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343.2.4 Alteration in Memorandum ofA s s o c i a t i o n
Any Company which intend sto make any change to the
Memorandum of Association (MOA) of its company, will have to
comply with the provisions of Section -13 of Companies Act, 2013
and an y other applicable provisions of the Act and applicable rules.
Company can alter its Memorandum by way of alteration in follo w-
ing clause of Memorandum of Ass ociation:
1.Alteration in Name Clause: Section 13 of the Company Act,
2013 deals with change in name which says that :
a)The name of the company can be changed by a special
resolution and the name approved by the Ministry of Corp o-
rate Affairs (MCA) on prescribed application.
b)By obtaining the approval of Central Government. Approval
of Central Government is not required if the change relates
to the addition/deletion of the words “private” to the name.
The power of change in name of company has now been
delegated to Registrar of Comp anies. The company secretary has
to follow the procedure for changing name o f company which i n-
cludes Board meeting, special resolution in meeting of members,
applic ation in Form INC to the ROC and so on.
After submission of necessary documents to ROC, fresh ce r-
tificate of incorporation is issued by ROC. The company needs to
give notice of the same in newspaper. Changes need to be made
everywhere such as common seal, letter head, registers and other
records of company.
2.Alternation in Domicile Clause: The procedure for making
changes in domicile clause of co mpany is as follows:
a)In case a company changes registered office from one place
to another, in the same state, a sp ecial resolution is need to
be passed in general meeting.
b)In case a company shifts its office from one state to another
then a special resolution is to be passed in the general mee t-
ing. In addition to this, a confirmation order from Central
Government isto be obtained.
3.Alteration in Object Clause: A company may change its o b-
jects as enshrined in its MOA in accordance with the provisions
of Section 13 of the Act .Now alteration of object clause requires
passing of a special resolution in the general meeting. A copy of
special resolution is filed with the Registrar within 30 days of its
passing. The details, as may be prescribed, in respect of such
resolution shal l also be published in the newspaper (one in En g-
lish and one in vernacular la nguage)munotes.in

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354.Alteration in Liability Clause: The liability clause may be a l-
tered so as to make liability of d irector unlimited, if authorized by
‘Articles of Association’. The direct or has to give consent in wri t-
ing to this effect. For this purpose a special resolution is passed
and copy of it is to be filed with the Registrar within 30 days of
passing the resolution.
5.Alteration in Capital Clause: A company can alter its share
capital, if authorized by ‘Articles of Association’. The company
can alter share capital in the following ways :
a)Increase in share capital by issue of new shares
b)Reduction in share capital
c)Reorganization of capital structure
d)Conversion of share into stock
Inorder to increase the share capital, a company has to
pass only ordinary resolution. In order to reduce or reorganize the
share cap ital a company has to pass special resolution and obtain
court san ction.
6.Alteration in Subscription Clause: AC o m p a n yi ni t sl i f es p a n
can’t alter the ‘Subscription Clause’ or can’t alter the ‘Subscriber
Sheet’. Subscriber Sheet use dat the time of Incorporation of
Company shall be used for the life span of the Company.
3.2.5 Ultra Vires
It is derived from Latin words meaning “ultra” which means
‘beyond’ and “vires” meaning ‘power or authority’. So it can be said
that anything which is beyond the authority or power is called u ltra-
vires. In the context of the company, it refers to anything which is
done by the company or its directors which are beyond their legal
authority or which was outside the scope of the object of the co m-
pany is u ltra-vires.
Significance of Ultra Vires Doctrine
The doctrine of ultra vires applies to the Memorandum of A s-
sociation (MOA) of a company. The M OA contains scope of activ i-
ties to be done by company in its objects clause and a co mpany
cannot undertake any activity which is not defined MOA. Any acti v-
ity done beyond scope of MOA is considered as an ultra vires acti v-
ity. Such activities are null or vo id and all ultra vires transactions
can never be subs equently ratified or validated, not even by the
consent of the shareholders. This is meant to protect the interests
of the shar eholders and creditors of the company.
Effects of Ultra Vires
The director s entering into ultra vires contracts may be liable
to the third party for breach of warranty of authority. The directorsmunotes.in

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36can be held personally liable by the company for acts done by them
ultra vires to MOA.
If the directors of the company divert compan y’s capital, for
purpose alien to the co mpany’s MOA, they will be personally liable
to replace it.
Similarly, if a director makes an ultra vires payment to an
outside party, he can be compelled to make good the funds used.
The d irector who refunded the mo ney could also get indemnity as
against the person who received the payment knowing fully well
that the payment is given to him was ultra vires.
Similarly, ultra vires borrowing does not create the relation of
creditorand debtor.
A contract which is ul tra vires the company will have no legal
effect. Such contract are void and are not biding upon the company
and the company can neither sue no rbe sued.
3.3ARTICLES OF ASSOCIATION (AOA)
3.3.1 Meaning and Definition:
AOA isa document which prescribes the rules and bye -laws
for the general management within the company and for the
attainment of its object as given in the memorandum of association
of the company .
The AOA are a subordinate to the Memorandum of
Association of the company. Memorandum stat es the objects and
purposes for which the company is formed, whereas Articles define
how the business of company should be carried on. They define the
rights, duties, powers of the management of a company as between
thems elves and the company at large.
Lord Justice Bowen defines “The articles of association are
internal regulations of company and are for the benefits of
shareholders.”
As per Section 2 (5) of the Companies Act, 2013 “articles”
means the articles of association of a company as originally fr amed
or as altered from time to time or applied in pursuance of any
previous company law or of this Act.
3.3.2 Contents of Articles of Association
Section 5(1) and section 5(2) of the Companies Act, 2013
provide for the contents of the articles of a ssociation which is as
follows:munotes.in

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371.Share capital including division of shares into different
classes , rights of various shar eholders, share certifi cates etc.
2.Lien on shares, call on shares, forfeiture of shares, buy back
of shares, surrender of shares.
3.Procedure for issues of shares, allotment of shares, transfer
of shares, transmission of shares, conversion of shares into
stock
4.Alteration and reduction in share capital
5.Procedure for convening, holding and conducting different
meetings of members, directors and cr editors. Provisions r e-
lating to notice, quorum, voting etc.
6.Appointment, powers, duties, qualifications, remunerations,
etc. of directors. Borrowing power of directors
7.Declaration and payment of dividend and creation of reserves
8.Appointment and remuneratio n of auditors. Audit of co m-
pany’s account
9.Capitalization of profits / reserves
10.Use of company’s common seal
11.Procedure for issue of share certificate and share warrant
12.Alteration in the Articles of Association
13.Payment of commission on shares and debentures to unde r-
writers
14.Provisions relating to winding up of company. Appointment of
liquidator
15.Dematerialization of shares
3.4 DISTINCTION BETWEEN MEMORANDUM AND
ARTICLES OF ASSOCIATION
Points Memorandum of
AssociationArticles of
Association
1)Meaning MOA is the charter of the
company. It is treated as
the constitution of the
company. It defines the
scope of its activities.AOA is a document
which prescribes the
rules and bye -laws for
the general
management within
the company.
2)Type of
Information
Contain edIt contains power and
objects of the companyIt contains rules and
regulations of the
companyHave a look on format ofAOA of ‘TATA CommunicationLtd.’at
https://www.sec.gov/Archives/edgar/data/1116134/000119312509208566/dex15.htm
munotes.in

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383)Status It is primary and supreme
document of company. It
is subordinate to the
Companies ActIt secondary
document. It is
subordinate to
Memorandum of
Asso ciation.
4)Major
ContentIt contains six clauses
1)Name Clause
2)Domicile Clause
3)Object Clause
4)Liability Clause
5)Capital Clause
6)Subscription
ClauseIt can be drafted as
per requirement of
company.
5)Obligatory It is obligatory to prepare
for all companies.Itis not obligatory to
prepare for all
companies. A public
company limited by
shares can adopt
‘Table A’ in place of
Articles.
6)Alteration Alteration can be done,
after passing Special
Resolution in Annual
General Meeting (AGM)
and previous approval of
Cent ral Government or
Company Law Board is
required.Alteration can be done
in the Articles by
passing Special
Resolution at Annual
General Meeting
(AGM)
7)Relations Defines the relation
between company and
outsiders such as
creditors, debtors etc.Regulates t he
relationship between
company and its
members
8)Act done
beyond the
scopeThe act done beyond the
scope is absolutely voidThe act done beyond
the scope can be
rectified by
shareholders
3.5 PROSPECTUS
3.5.1 Meaning and Definition:
A prospectus is a d ocument issued by the company inviting
the public and investors for the subscription of its securities. Itis
required to be issued only after the incorporation of the company.munotes.in

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39These documents describe stocks, bonds and other types of
securities offered by the company. A prospectus is always
accompanied by performance history and financial information of
the company. The reason for accompanying such information along
with the prospectus is to make sure that, the investors are well
aware of the company’s bac kground and overall performance and
the investors do not fall into the prey of investing in a bad company.
Prospectus is a kind of advertisement for attracting people for
subscribing shares of company. It is expected to provide correct
and reliable informa tion about company to the investors. Company
Act has made various provisions regarding preparing and issue of
prospectus. There is provision in Company Act regarding penalties
and punishment for providing misleading information in prospectus.
Every prospec tus issued to the public must be printed, divided into
paragraphs, dated, sealed and signed by all the directors. A copy of
it must be filed with the Registrar and issued to the public within 90
days of filing with Registrar.
Section 2 ( 70)o f Companies Act defines prospectus as, “A
prospectus means any document described or issued as a
prospectus and any notice, circular, advertisement or other
document inviting offers from the public for the subscription or
purchase of any securities of a body corporat e.”
3.5.2 Content of Prospectus
1)The names and addresses of the registered office of the co m-
pany, company secretary, Chief Financial Officer, auditors, l e-
gal advisers, bankers, trustees, if any, underwriters and such
other persons as may be prescribed;
2)Thedates of opening and closing of the issue;
3)Adeclaration made by the Board or the Committee authorized
by the Board in the prospectus that the allotment letters shall
be issued or application money shall be refunded within fifteen
days from the closure of the issue or such lesser time as may
be specified by SEBI;
4)Astatement by the Board of Directors of separate bank a c-
count;
5)The details of the underwriters and the amount underwritten
by them;
6)The consent of trustees, advocates, merchant bankers, regi s-
trar, lenders, and experts;
7)The authority for the issue and the details of the resolution
passed, therefore;
8)The capital structure of the company in the prescribed ma n-
ner;munotes.in

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409)Procedure and time schedule for allotment and issue of secur i-
ties;
10)Main objects of the i ssue, the purpose for requirements of
funds, funding plan, the summary of the project appraisal r e-
port and such other particulars as may be prescribed;
11)Minimum subscription, amount payable by way of premium,
issue of shares otherwise than on cash;
12)The deta ils of any litigation or legal action pending or taken by
any Ministry or Department of the Government or a statutory
authority against any promoter of the issuer company during
the last five years immediately preceding the year of the issue
of the pr ospec tus;
13)The details of default and non -payment of statutory dues;
14)The details of directors including their appointment and rem u-
neration, and particulars of the nature and extent of their inte r-
est in the company;
15)The disclosure for sources of promoters’ contri bution;
16)A statement about declaration of compliance of the provisions
of act and a statement to the effect that nothing in the pr o-
spectus is contrary to the provisions of the Act. It must also
contain a decl aration that nothing in the prospectus is contrar y
to the provision of the SEBI Act, 1992 and the rules and reg u-
lation made there under .
If a prospectus is issued in contravention of the provisions of
26 (1) of the Act, the company shall be punishable with fine which
shall not be less than Rs. 50,000/ -and which can be extended upto
Rs. 3 lakhs and every person who is in default shall be punishable
with imprisonment for a term which may be extend to 3 years or
with fine which shall not be less than Rs.50,000/ -
3.6 STATEMENT IN LIEU OF PROSPECTUS
3.6.1 Meaning and Definition :
The company issues prospectus in order to collect share
capital from public. However, som etimes a company collects capital
from private placement which includes i ts promoters, dire ctors, their
friends and re latives, and not f rom general public, in such situation
‘Statement in Lieu of Prospectus’ must be filed with the Registrar of
Companies.Have a look on format ofProspectusof ‘Infosys Ltd.’at
https://www.infosys.com/newsroom/press -
releases/Documents/2013/prospectus -filed-AMF.pdfmunotes.in

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41A statement in lieu of prospectus gives practically the same
information as a prospectus and is signed by all the directors or
proposed directors. A copy of it must be filed with the Registrar at
least 3 days before actual allotment of shares. If these provisions
are not complied with, then company and its directors are held r e-
sponsible. They are punishable with fine which may e xtent upto Rs.
1,000/ -. Liability for misre presentation in the Statement in lieu of
prospectus is same as in the case of prospectus.
A statement in lieu of prospectus is defined as “ap u b l i cd o c u-
ment prepared in the second schedule of companies ordinance by
every such public company which does not issue a pr ospectus on
its formation by filing with the registrar before allotment or shares of
debentures, and signed by every person who is named there in”.
3.6.2 Contents of a Statement inL i e u of Prospectus :
1.Name of company
2.Statement of capital
3.Description of the business
4.Names, addresses and occupations of directors
5.Estimated initial expenses
6.Names of vendors and details of property
7.Material contracts
8.Director’s interests
9.Minimum subscription
3.7 MISLEADING PROSPECT US
The prospectus must provide fact and reliable information to
the investors. The investors decide to invest in particular company
based on the information supplied through prospectus.
A prospectus is said to be misleading or untrue in two of
following cases :
A statement included in a prospectus shall be deemed to be
untrue, if the statement is misleading in the form of and
context in which it is included.
Omission ,from prospectus ,of any matter t hatmislead sthe
investors.
Contravention of Section 26 of the Companies Act, 2013
If a prospectus is issued in contravention of the provisions of
this section, then the company shall be punishable with a fine,
not less than Rs.50,000/ -which may extend to Rs. 3 Lakhs ,
andmunotes.in

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42Every person who is party to the issue of the prospectus shall
be punishable with imprisonment for a term which may extend
to3years or with a fine, not less than Rs.50,000/ -which may
extend to Rs. 3 Lakhs ,o rw i t hb o t h .
Criminal Liability for Misstatement in the prospectus
Where a pr ospectus is issued which includes any statement
which is untrue or misleading in form or context or any matter is
likely to mislead the investor, then every person who autho rizes the
issue of prospectus shall be punishable with imprisonment for a
term whic h may not be less than 6months, but which may extend
to10years; or a fine not less than the amount involved in fraud but
it may e xtend to three times the amount of fraud; or with both.
Civil Liability for Misstatement in the prospectus
If there is any inclusion or omission of any matter in the pr o-
spectus issued, which is misleading and the person who has su b-
scribed the securities has sustained any loss or damage, then the
company and every person who is a director, promoter and e xpert
at the time of iss ue of prospectus, shall be responsible and be l i-
able for pu nishment under section 36 of the act, and shall be liable
to pay co mpensation to every person who has sustained such loss
or damage.
3.8 DISTINCTION BETWEEN PROSPECTUS AND
STATEMENT IN LIEU OF PRO SPECTUS
Points Prospectus Statement in Lieu of
Prospectus
1)Meaning A prospectus is a
document issued by the
company inviting the
public and investors for
the subscription of its
securities.When a company collects
capital from among its
promoters, direct ors, their
friends and relatives, and not
from general public, in such
situation ‘Statement in Lieu
of Prospectus’ must be filed
with the Registrar of
Companies.
2)Purpose It is used for publicity for
subscription of securities
as well as filing with the
Registrar.It is used only for the filing
with the Registrar.
3)Suitability Large public limited
companies issue
prospectus to collect huge
capital.Small public companies can
raise capital privately.
4)Filing with
RegistrarIt is filed with Registrar,
90 day s prior to issue to
publicIt is filed with Registrar, 3
days prior to allotment of
shares.munotes.in

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433.9 COMPANY FORMATION –STAGES AND
SECRETARIAL DUTIES
Formation of Joint Stock Company is lengthy and time
consuming procedure. It involves many formalities als op r e p a r a t i o n
and submission of various documents. Company promoters play
vital role in the procedure of formation of company. They develop
idea of new business, undertake incorporation formalities and
obtain incorporation certificate, collect required cap ital and finally
secure trading / commencement certificate.
3.9.1 Various stages in Company Formation
1.Promotion Stage :This is the first stage in the formation of
company. Here, all the prelim inary work of company formation is
completed. This include s discovering business opport unity and
organizing resources. At this stage promoter plays an important
role to implement the business idea and bring it into action. The
promoter is the person who is concerned with the promotion of
business enterprise. For example, Dhirubhai Ambani is the
promoter of Reliance Industries.
2.Incorporation / Registration Stage :Incorporation /Registration
brings company into exi stence. A company is formed only when
it is registered under the Companies Act. Here, necessary do c-
uments such as Memorandum of Association and Articles of
Association of company, List of directors, written consent of d i-
rectors, notice of the address of registered office of company
and statutory declaration are submitted and required stamp duty
is paid. Th e registrar scrutinizes documents and if he is sati s-
fied, the name of company is entered in the register. On co m-
pletion of these formalities, the Registrar issues ‘Certificate of
Incorp oration’.munotes.in

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44
Source: www.tatachemicals.com
3.Capital Subscription / Collection Stage :Aprivate company
can commence its business as soon as it receives ‘Certificate of
Incorporation ’. A public company can commence its business
only after receiving the ‘Certificate of Commencement / Trading
Certificat e’. After getting ‘Certificate of I ncorporation ’,ap u b l i c
company issues a prospectus to invite public to subscribe its
shares. Public company fixes the minimum subscription. A
company must collect this amount within 60 days from the date
of issue of pros pectus. If the minimum subscription is not co l-
lected by the company, it does not get ‘Certificate of Co m-
mencement / Trading Certificate’ and it has to refund the
amount of the applicant within 8 days. To avoid such situation,
the company appoints underwrit er who give guarantee of min i-
mum su bscription of shares of company.
4.Commencement of Busin ess / Trading Certificate Stage :
This is the last stage of co mpany formation. After completing the
sale of the required number of shares, a promoter approaches
to Re gistrar and submit various documents and necessary filing
fees is paid. The Registrar then scrutinizes the documents. If he
is satisfied he issues a certificate known as ‘Certificate of Co m-
mencement of Business’. After receiving ‘Certificate of Co m-
mencemen t / Trading Certificate’ a public company can start its
business activities.Certificate of Incorporation
No 2893 OF 1938 -1939
I hereby Certify that TATA CHEMICALS LIMITED isthis day
incorporated under the Indian Companies’ Act VII of 1913, and that the
Company is Limited.
Given under my hand at Bombay this Twenty -third day of
January One Thousand Nine Hundred and Thirty –nine.
(Sd.) BEHRAMJI M. MODI,
The Registrar of CompaniesThe Seal of the
Registrar of
companies,
Bombay
munotes.in

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45
Source: www.tatachemicals.com
3.9.2 Secretarial Duties at Various Stages o f Company
Formation
The company secretary plays a very important role in the
Promo tion and Incorporation of a company. He acts as the adviser
to the promoters and helps them in preparatory work to be
performed and legal formalities to be observed in this connection.
Secretarial Duties at the Promotion Stage
1.To arrang et h e meetings of the promoters for promotion of co m-
pany.
2.To attend the meetings of the promoters, supply necessary i n-
formation to promoters , record the proceed ings and maintain
the minutes of th ese meetings.
3.To ascertain from the Registrar of Companies if the proposed
name of the company is available for registration.
4.To help the promoters in the finalization of the various preli -
minary contracts with vendors, underwriters, bankers, brokers,
solicitors, auditors, managerial personnel etc .
5.To get Memorandum, an d Articles of Association prepared and
printedCertificate for Commencement of
Business
(Pursuant to section 103 (2) of the Indian Companies Act, 1913 )
-------------------------------------
I hereby certify that the Tata Chemicals Limited which was incorporated
under the Indian Companies Act, 1913, on the Twenty -third day of January
1939, and which has this day filed a duly verified declaration in the
prescribed form that the conditions of section 103(1) (a) to (d) of the said
Act have been complied with, is entitled to commence business.
Given under my hand at Bombay this Twenty -seventh day of April one
thousand nine hundred and Thirty -nine.
(Sd.) BEHRAMJI M. MODI,
The Registrar of CompaniesThe Seal of the
Registrar of
companies,
Bombay
munotes.in

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466.To see that all other prescribed documents for the registration of
thecompany are ready for delivery to Registrar. The documents
includes:
a)a written consent of the Directors to act in that capacity and
to pu rchase qualification shares,
b)the notice of address of the Registered office of the com -
pany, and
c)a statutory declaration stating that all the legal requir e-
ments of the Act precedent to incorporation have been
complied with
Secretarial Duties at the Incor poration / Registration Stage
1.The promoter selects three names of company and the
secretary files an application for the availability of name of the
company along with required fees to the ROC.
2.The secretary submits various documents to ROC for registr a-
tion of company to obtain the Certificate of Incorporation from
the Registrar. The documents include:
a)Memorandum of Association
b)Articles of Association
c)List of Directors
d)a written consent of the Directors to act in that capacity and
to purchase qualificatio n shares,
e)the notice of address of the Registered office of the com -
pany, and
f)a statutory declaration stating that all the legal requir ements
of the Act precedent to incorporation have been complied
with
g)Payment of prescribed filing and registration fees and stamp
duty
Secretarial Duties at the Capital Subscription / Collection
Stage
1.The first meeting of Board of Directors will be convened to
deal with:
a)Appointment of secretary
b)Appointment of Managing Director and other responsible
officers
c)Appointment of banker, broker, solicitors and auditor
d)Approve design of common seal of company
e)Underwriting agreement with underwriter to secure minimum
subscriptionmunotes.in

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47f)Decide minimum subscription amount
g)Approve draft of prospectus
h)Listing of shares on a stock exchange
2.Get common seal prepared as per designed approved and
open the Bank Account
3.Prepare underwriting agreement with underwriter
4.Obtain consent letter from bankers, solicitors, auditors,
underwriters, brokers etc. for incorporating their names in
prospectus
5.Get p rospectus and share application form printed. Get
printed copy of the prospectus signed by directors of
company
6.Submitting application stock exchange for getting shares
listed on stock exchange
7.File a copy of prospectus with ROC. Then it is issued to
publi c within 90 days from filing with ROC which includes
share application form.
8.Make arrangement with banker to receive application money
received from investors.
9.Convey Board meeting to pass resolution for allotment of
shares.
10.The secretary issues ‘Letter of Allotment’ to those whom
shares are allotted. Secretary issues ‘Letter of Regret’ to
whom shares are not allotted (in case of over subscription)
along with refund order
11.File return of allotment to ROC within 30 days of allotment of
shares
12.Issue share cert ificate to every shareholder within 3 months
from date of allotment of shares
13.Maintain register of member s which includes name of
share holders and other share related details.
Secretarial Duties at the Commencement of Business /
Trading Certificate Stage
1.File following declarations with ROC:
a)A statement of declaration that a co py of prospectus or
statement in lieu of prospectus is filed with the Registrar.
b)A statement of declaration that minimum subscription
amount has been collected
c)A declaration that dir ectors have purchased and paid for
qualification sharesmunotes.in

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48d)A statutory declaration that all the legal requirements have
been complied with
2.Along with above documents, necessary filing fees is paid
3.Collect the ‘Certificate of Commencement / Trading Certificate ’
from ROC.
3.10 CONVERSION OF COMPANIES
Conversion of companies means changing legal status of
company i.e. from private to public and public to private. It can be
done by completing the necessary legal procedures and formalities.
As per Section 18 of Companies Act, 2013 a company
registered under one class can convert into another class by
alteration of MOA and AOA of company. However, consent of
shareholders is required for such decision.
3.10.1 Conversion of Private Company into a Public Company
Section 14 of Companies Act, 2013 (Section 31 of Erstwhile
Companies Act 1956) plays an important role during conversion of
a Private company into a Public company. Itinvolves alteration of
article of association of Private Company under section 14 which
cannot be done without passing special resolution of Shareholders
in the General Meeting. Secretarial procedure for Conversion of a
Private Limited Company into a Public Li mitedis as following :
1)Convening Board Meeting: The secr etary convens ab o a r d
meeting in accordance with the provisions of section 173(3) of
the Companies Act, 2013 . The agenda of this meeting is:
a)Pass a board resolution to get approval of Directors for co n-
version of a Private company into a public company by alte r-
ing the AOA.
b)Fix dat e, time and place for holding Extra -ordinary General
meeting (EGM) to get approval of shareholders, by way of
Special Resolution, for conversion of a Private co mpany into
a Public company.
c)To approve notice of EGM along with Agenda and Explan a-
tory Statemen t to be annexed to the notice of General Mee t-
ing as per section 102(1) of the Companies Act, 2013;
d)To authorize the Director or Company Secretary to issue N o-
tice of the Extra -ordinary General meeting (EGM) as a p-
proved by the board under clause 1(c) mention ed above.
2)Issue of EGM Notice: The secretary makes arrangement to i s-
sue Notice of the Extra -ordinary General meeting (EGM) to all
Members, Directors and the Auditors of the company in acco r-munotes.in

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49dance with the provisions of Se ction 101 of the Companies Act,
2013;
3)Convening Extra Ordinary General Meeting: The Extra -
ordinary General meeting (EGM) is held and theSpecial Res o-
lution is passed , to get shareholders’ approval for Co nversion of
Private Company into a Public company along with alteration in
articles of association under section 14 for such conve rsion.
4)Filing Documents with ROC: For alteration in Article of Ass o-
ciation for conversion of Private Company into a Public co m-
pany under section 14, few E -forms will be filed with concerned
Regi strar of Companies at different stages as following:
a)E-form MGT.14: This form is f or filing special resolution with
ROC, passed for conversion of Private Company into a Pu b-
lic company .Attachments of E -form MGT.14 i ncludes :
Notice of EGM along with copy of explanatory st atement
under section 102;
Certified True copy of Special Resolution;
Altered memorandum of association;
Altered Articles of association
Certified True copy of Board Resolution may be attached
as an optional attachment.
b)E-form INC.27 :This form is for Application for conversion of
a private company into a public company .Attachments of E -
form INC.27:
It is mandatory to attach Minutes of the member’s mee t-
ing where approval was given for conversion and altered
articles of association.
Altered Articles of Ass ociation;
Certified True copy of Board Resolution may be attached
as an optional attachment.
Other information if any can be provided as an optional
attachment(s)
As per Section 18, after receiving the documents for conve r-
sion of a Private Company into a Public Company, ROC shall sa t-
isfy itself that the Company has complied with the requisite prov i-
sions for registration of company. If so satisfied, ROC shall close
the former registration and issue fresh certificate of incorporation,
after registering the d ocuments submitted for change in class of
company.munotes.in

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503.10.2 Conversion of Public Company into a Private Company
1)Convening Board Meeting: A meeting of Board of Director is
convened by company secretary by sending them notice of
meeting. At the Board Meeti ng, the resolution approving
conversion from a public company to a private company has to
be passed. Secondly, a resolution to call an extraordinary
general meeting must be passed.
2)Convening an Extra -ordinary General Meeting (EGM) :Notice
is sent to all the members regarding EGM. Anexplanatory
statement specifying the business to be transacted at the
meeting has to be annexed to the notice. An extraordinary
general meeting is vital to get the approval of the members of
the company before proceeding with the conversion. At the
extraordinary general meeting, a special resolution approving
the alterations to the Memorandum of Association and Articles
of Association needs to be passed .
3)Filing Documents with ROC: The company has to intimate
the Registrar of Companies within 30 days of passing the res o-
lution to convert from a public company to a private company.
Following doc uments are required to be submitted to the ROC:
a)Form MGT -14 (Filing of Resolutions and agreements
with the Registrar): The Company has to intimate the
Registrar of Companies within 30days of passing the
resolution to convert from a public company to a private
company. Resolutions are filed with the Registrar in Form
MGT -14 along with the prescribed fees as prescribed in the
Companies (Registration offices and fees) Rules, 2014.
The following documents have to be attached with the form:
Copy of the resolution(s)
Copy of the explanatory statement
Altered Memorandum of Association
Altered Articles of Association
Copy of the agreement
Anyo t h e ro p t i o n a ld o c u m e n t s
b)File form INC -27 (Conversion of public company into
private company or private company into public co m-
pany): Pursuant to Section 14 of the Companies Act, 2013,
any alteration to the articles of association has to be int i-
mated t o the Registrar vide Form INC -27 to enable the co n-
version. The form has to be filed with the Registrar of co m-munotes.in

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51panies, along with the application fees .The following doc u-
ments have to be su bmitted along with the form -
Minutes of the members’ meeting
Alter ed articles of association
Order of competent authority (Central Government)
4)Intimation about Conversion: The secretary needs to do
publicity regarding conversion introduced for the information of
shareholders and outsiders. Intimation of change will be
communicated to the stock exchange where company shares
are listed.
5)Fresh Certificate of Incorporation :The company secretary
has to surrender existing certif icate of incorporation to the R OC
with a request to issue fresh certificate of incorporation wit h
necessary changes into it.
3.10.3 Reconversion of Public Company into a Private
Company
1)Convening an Extra -ordinary General Meeting: After t he
Board of Director take decision for the reconversion of public
company into private company, suitable arr angements will be
made for convening EGM for taking final decision about
reconversion by the members. In EGM, special resolutions for
making relevant changes in the Memorandum and Articles of
Association will be passed.
2)Submission of application to the C entral Government :After
passing resolution, the company will have to submit application
to the Central Government in the prescribed form for securing
the approval to the reconversion. After securing such approval,
the ROC will be informed accordingly.
3)Securing approval of the Central Government :On the
receipt of such application, the Central Government will make
the scrutiny of the application and if satisfied, it will give sanction
for the conversion. The company becomes private company
with the effect from the date of approval of the Central
Government. The changes in the name will be effective from the
date of issue of fresh Certificate of Incorporation by the ROC. All
documents, relating to conversion will be filed with the Registrar,
along with a pr inted copy of the altered articles.
3.11 SUMM ARY
MOA is the charter of the company. It is treated as the
constitution of the company. It defines the scope of its activities. Itmunotes.in

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52contains the rights, privileges and powers of the company. MOA
establishes t he relationship of the company with the members.
There are six Clauses of MOA namely Name clause, Domicile
clause, Object clause, Liability clause, Capital clause, and
Subscription clause. Different authorities need to be approached for
making alternation in clauses of MOA and undertake necessary
formalities.
Ultra -vires refers to anything which is done by the company
or its directors which is beyond their legal authority or which was
outside the scope of the object of the company. This is meant to
prote ct the interests of the shareholders and creditors of the
company.
AOA is a document which prescribes the rules and bye -laws
for the general management within the company and for the
attainment of its object as given in the memorandum of association
of th ec o m p a n y .I ti n c l u d e sd e t a i l sa b o u ti n t e r n a lm a n a g e m e n to f
company.
A prospectus is a document issued by the company inviting
the public and investors for the subscription of its securities. It is
required to be issued only after the incorporation of the company. It
includes details about securities issued in the market which enables
investors to take decision about investing in company.
Sometimes a company collects capital from private
placement which includes its promoters, directors, their friends an d
relatives, and not from general public, in such situation ‘Statement
in Lieu of Prospectus’ must be filed with the Registrar of
Companies.
Misleading prospectus refers to a statement included in a
prospectus is to be untrue. Omission, from prospectus, o fa n y
matter misleads the investors.
The formation of company includes 4 stages namely
Promotion stage, Incorporation / Registration Stage, Capital
subscription / collection stage and finally Commencement of
business / Trading Certificate stage. The sec retary needs to
perform various activities during all these stages.
Conversion of companies means changing legal status of
company i.e. from private to public and public to private. It can be
done by completing the necessary legal procedures and formaliti es.
As per Section 18 of Companies Act, 2013 a company
registered under one class can convert into another class by
alteration of MOA and AOA of company. However, consent ofmunotes.in

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53shareholders is required for such decision. The secretary needs to
perform vario us activities during conversion of company.
3.12 EXERCISE
FILL IN THE BLANKS
1)_________ is a fundamental document of a company
(MOA,AOA, None of these)
2)____________ clause in memorandum of association contains
the state in which regi stered address of the company is situated.
(Name, Domicile, Subscription)
3)_________ refers to anything which is done by the company / a
director which is beyond their legal authority or which was ou t-
side the scope of the object of the company. (Ultra Wire, Ultra
Vires, U ltra V irus)
4)_______________ is internal regulations of company. (Prospe c-
tus, Statement in lieu of prospectus, Articles of Association)
5)______________ is first stage in company formation. (Prom o-
tion stage, Incorporation stage, Capital subscription stage)
6)________ _______ Company can commence its business as
soon as it receives Certificate of Incorp oration. (Private, Public,
Both Not)
DEFINE/EXPLAIN THE FOLLWING TERMS
1)Memorandum of Association
2)Articles of Association
3)Ultra Vires
4)Prospectus
5)Statement in Lieu of Pros pectus
6)Misleading Prospectus
7)Formation stage of Company formation
8)Incorporation stage of Company formation
9)Capital stage of Company formation
10)Commence of Business stage of Company formation
11)Conversion of Company
ANSWER IN BRIEF
1)Define Memorandum of Assoc iation. Explain its various clauses.
2)What is Articles of Association? Describe its content.
3)Write a note on Ultra Vires.munotes.in

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544)Distinguish between Prospectus and Statement in Lieu of
Prospectus.
5)Write a note on Misleading Prospectus.
6)Describe various stages invo lved in company formation.
7)Explain secretarial duties involved at Promotion stage of
company formation.
8)What are the secretarial duties involved at Incorporation stage
of company formation?
9)Briefly describe secretarial duties involved at Capital
subscripti on stage of company formation.
10)Elaborate secretarial duties involved at Commencement of
Business stage of company formation.
11)Write a note on Conversion of Companies.
12)Briefly explain reconversion of public company into private
company.
3.13 REFERENCES
http://www.taxclick.org/type/company -law/the -clauses -of-
memorandum -of-association -under -company -act-2013 -and-format -
of-moa/
https://accountlearning.com/memorandum -of-association -meaning -
contents -of-moa/
https://www.indiafilings.com/learn/clauses -of-memorandum -of-
association/
Doctrine of Ultra Vires under Company Law –What acts will be
deemed as ultra vires? By HarshJain -June 1, 2018, Ipleaders
intelligent solutions
https://blog.ipleaders.in/borrowing -company -deemed -ultra-vires/
What Is The Content For The Articles of Association By
Vyoma Mehta -May 9, 2016
https://blog.ipleaders.in/drafting -articles -of-association -company/
Information to be stated in the Prospectus of a Company By
prathik sharavi May 22, 2018
https://blog.ipleaders.in/information -prospectus -company/
https://www.commercepk.com/statement -in-lieu-of-prospectus/
https://accountlearning.com/important -stages -in-the-formation -of-a-
company/
https://taxguru.in/company -law/convert -private -company -public -
company.html
munotes.in

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554
SECRETARIAL CORRESPONDENCE
Unit Structure :
4.0 Objectives
4.1 Introduction
4.2 Correspondence
4.3 Role of Technology in Secretarial Correspondence
4.4 Specimens
4.5 Summary
4.6 Exercise
4.7 References
4.0OBJECTIVES
After studying the unit stud ents will be able to:
Know circumstances requiring secretarial correspondence with
the Shareholders, Debenture Holders, Registrar of Companies,
Stock Exchange and penalties thereon
Know circumstances requiring secretarial correspondence with
theSEBI, Com pany Law Board and penalties thereon
Discuss role of technology in Secretarial Correspondence
Write Specimen of Letter to Shareholders, ROC, Stock
Exchange, Government, Bank
4.2INTRODUCTION
Correspondence refers to communication in writing. It is an
exchange of ideas, information, views and opinions in a respect of
certain matters in a written form .The secretary receives letter from
various concerned parties such as shareholders, directors, stock
exchange ,bankers’ , creditors and others. So the secret ary has to
reply tothem promptly. He /She is also responsible for submission
of annual reports, returns and so on. Accurate, timely and careful
correspondence creates better image of company among outsider.munotes.in

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564.2CORRESPONDENCE
4.2.1 Correspondence withShare H olders
Shareholders are the owners of the business since they
contribute to the capital of the company. They are large in numbers
and scattered over large area. So they cannot contribute to the
routine activities of the business also they may n ot have required
skills to handle business activities. In such case they appoint
elected representatives who are called as directors.
The circumstances under which secretarial correspondence
takes place with the members of company as are follows:
1)Compan yM e e t i n g
Notice and Agenda of AGM
Circulars
Annual report and audit report
2)Issue of shares
Letter of allotment in reply to application of shares
Regret letter for inability to allot any share
Issue of share certificate
Issue of bonus shares and right iss ue
3)Call on shares
Letter for demanding call money on shares
Letter of reminder for call money
Warning letter for forfeiture of shares due to non -payment of
call money
Notice of forfeiture of shares
4)Transfer and Transmission of Shares
Notice of lodgement of transfer to the transferor and
transferee
Letter informing approval of the transfer of shares to the
transferor and transferee
Letter informing non -approval of the transfer of shares to the
transferor and transferee
Letter informing approval of the tran smission of shares to
legal heir of deceased shareholder
5)Payment of Dividend
Notice of dividend payment and dividend warrant
Notice of dividend mandatemunotes.in

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576)Termination of Membership
Notice of termination of membership due to forfeiture of
shares
Letter for informing of surrender of shares
Letter for informing of conversion of shares into share
warrant
7)Others
Notice of loss of share certificate
Issue of duplicate share certificate
Reply to complaint and queries raised by shareholders
4.2.2 Correspondence with Debenture Holders
Debenture refers to the debt (loan) instrument issued by
company under its common seal. As company issues share for
raising capital from market, in the same way debentures are also
issued. Share capital is own capital of the company b ut debenture
capital is a loan of the company which has to be repaid after certain
period of time. They are creditors of the company. Interest is paid to
debenture holders as return over their investment made into
company. Debenture holders are not concern ed with the
management of company. They are only concerned about their
repayment of capital and payment of interest. They get priority over
shareholders for repayment of capital and payment of interest.
The circumstances under which secretarial correspon dence
takes place with the debenture holders of company as are
follows:
1)Letter informing allotment of debentures
2)Letter informing issue of debenture certificate
3)Letter informing payment of interest on debentures
4)Letter informing conversion of convertible debentures into equity
shares
5)Letter informing redemption of debentures
4.2.3 Correspondence with Registrar of Companies (R oC)
The Registrar of Companies (ROC) is appointed by the
Central Government to register and supervise matters relating to
registrat ion of companies under Company Act. They also control
affairs of the company. Every company has to submit certain
documents like Memorandum and Articles of Association to ROC in
order to receive Certificate of Incorporation and Commencement
Certificate.munotes.in

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58The circumstances under which secretarial correspondence
takes place with the ROC as are follows:
1)Filing statutory report after Statutory meeting
2)Submission of Return of Allotment of share after allotment of
shares is done
3)Filing annual return after co mpletion of financial year and
approval in AGM
4)Extension time for holding AGM in unavoidable situations
5)Filing special resolutions
6)Alterations in MOA and AOA
7)Conversion and reconversion of company
4.2.4 Correspondence with t he Stock Exchange
Stock excha nge is a market place where buying and selling
of securities is done which is already issued by company. So it is
called secondary market. A company has to list (register) its
securities with one or more stock exchanges in order to trading take
place in th eir securities. The secretary has to undertake
correspondence with the stock exchange to inform about
happenings in the company. This correspondence is obligatory on
the part of company otherwise it attracts penalty.
The circumstances under which secreta rial correspondence
takes place with the Stock Exchange are as follows:
1)Listing of securities with the stock exchange
2)Informing about alteration in Memorandum of Association
3)Information about Board Meeting and AGM, change in Board of
Directors, Rate of div idend declared
4)Information about issue of Bonus Shares and Right issue
5)Submission of compliance report on corporate governance
within 15 days from the end of quarter
6)Submission of Annual Report within 21 days of its approval in
AGM
7)Any other information re quired by stock exchange
4.2.5 Correspondence with t heSecurities and Exchange
Board of India (SEBI)
Securities and Exchange Board of India (SEBI) is a
regulatory body of the Government of India. It controls the
securities market. It was established on A pril 12, 1992 under
theSEBI Act, 1992. It is headquartered at the Bandra Kurla
Complex in Mumbai, India. It has regional offices in major cities of
India such as New Delhi, Kolkata, Chennai andAhmedabad.munotes.in

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59The Preamble of the Securities and Exchange Board of India
describes the basic functions of SEBI is the protection of investors
interests in securities and to be a platform to promote, develop and
regulate the securities market in India as well as the relating ma t-
ters that are co nnected with it.
The SEB Ii sp e r m i t t e dt oa p p r o v er u l e sa n dl a w sp e r t a i n i n g
to the stock exchanges. It also implies that SEBI should enforce the
laws for stock exchanges to follow. SEBI examines books of a c-
counts of financial mediators and recognized stock exchanges. A n-
other role of SEBI is to urge r espective companies to list their
shares in stock exchanges and manage the registration of distrib u-
tors/brokers.
The circumstances under which secretarial correspondence
takes place with the SEBI are as follows:
1)SEBI receives large nu mber of complaints from Shareholders
and Investors related to payment of dividend, repayment of
capital, transfer of shares , and so on. SEBI solves these
complaints in cooperation with concerned company. The
secretary hasto give prompt attention to corres pondence with
SEBI and solve these complaints in time.
2)Company receives letters and notices from SEBI. Secretary has
to give prompt reply to it.
3)Any other information required by SEBI .
4.2.6 Correspondence withthe Company Law Board
The Central Government in terms of Section 10 (E) of the
Comp anies Act, 1956 constituted an independent Company Law
Board (CLB) vide Notif ication No. 364 dated the 31st May, 1991.
The CLB is a quasi -judicial body, exercising equitable jurisdiction,
which was earlier being exerc ised by the High Court or the Central
Government. The Board has powers to regulate its own proc e-
dures. The Company Law Board has framed Company Law Board
Regulations 1991 prescribing the procedure for filing the applic a-
tions/petitions before it. The Centra l Government has also pr e-
scribed the fees for making applications/petitions before the Co m-
pany Law Board, under the Company Law Board, (Fees on applic a-
tions and Pet itions) Rules 1991. The Board has its Principal Bench
at New Delhi, and four Regional Benche s located at New Delhi,
Mumbai, Kolk ata and Chennai.
The circumstances under which secretarial correspondence
takes place with the Company Law Board are as follows:
1)Conversion or reconversion of company
2)Alteration to Memorandum and Articles of Association
3)Petition filed by any investor and shareholders on oppression
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604.3ROLE OF TECHNOLOGY IN SECRETARIAL
CORRESPONDENCE
Fast changes have been taking place in all facets of life
including the business organization .This is as a result of
technological advancement. Every business organization today
requires facts and accurate information for quick decision -making
and high productivity. The employees including the secretary
expects certain supports which can be technologica l (machines and
equipments) and human.
In the past ,m a n a g e r used to dictate memo and letters, while
the secretary used to type them. Today’s secretaries are exposed to
office technology/automation including the Internet that makes work
easier and knowledg e more accessible. It is now easier to send
messages by telex, electronic mails (e -mails) fax and
telephones. This is the era of computers and information
technology, which has become an enabler of greater convenience
to the secretary. The role of technolo gy in secretarial
correspondence is as follows:
1)Increase in speed and accuracy in correspondence with various
people and authorities
2)Reduce wastage of resources
3)Reduces cost paper, printing and other stationery requirement
4)Increases efficiency of secretar y
5)Enables storage of data for future reference
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614.4SPECIMENS
4.4.1 LETTER TO SHAREHOLDERS
Letter for issue of Bonus Shares
GALAXY STEEL INDUSTRIES LIMITED
140/A, MIDC, Andheri (E), Mumbai –400093.
www gbs.com Tel: 022 -2222 5588
Ref.: BS/01/2018 -19 16thJanuary, 2019
Mr. Sandeep Baga
Laxmi Villa, Gogate Wadi,
Goregaon (W), Mumbai -400063
Sub: Bonus Issue of Equity Shares
Dear Sir,
I am directed by the Board of Directo rs to inform you that at the E x-
traordinary General Meeting held on 29thDecember, 2018 sharehol d-
ers have unanimously approved the recommendation of Board of D i-
rectors to i ssue bonus shares in the ratio of 1:1 (i.e., one bonus share
for each fully paid e quity share held by the shareholder).
Details of bonus shares issued to you are as follows :
D.P. ID No. Client ID
No.Shares held
as on record
dateBonus Shares allo t-
ted
M-354/2 10032758 100 100
For further queries (if any), in respect of the above, ki ndly do write to
our Registrar and Share Transfer Agent at the address given below:
GALAXY STEEL INDUSTRIES LIMITED
140/A, MIDC, Andheri (E), Mumbai –400093.
Tel: 022 -2222 5588
Email: galaxysi@gmail.com
Thanking you.
Yours fait hfully,
ForGalaxy Steel Indu stries Ltd
Sd/-
Secr etarymunotes.in

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62Letter for issue of Right IssueGALAXY STEEL INDUSTRIES LIMITED140/A, MIDC, Andheri (E), Mumbai –400093.
www gbs.com Tel: 022 -2222 5588
Ref.: BS/01/2018 -19
28thMay, 2019
Mr. Sandeep Baga
Laxmi Villa, Gogate Wadi,
Goregaon (W), Mumbai -400063
Sub: Offer letter for Right Issue of 1,00,00,000 equity shares of
Rs. 10 each at par
Dear Sir,
This is to inform you that in pursuant to the Board meeting held on
25thMay, 2019, a resolution is pas sed to issue 1,00,00,000 equity
shares of Rs. 10 each at par aggregating Rs. 10,00,00,000/ -to the
equity shareholders on right basis in the ratio of 1:1 equity shares for
every 1 equity shares held on 25thMay, 2019.
You are hereby informed that the Boar d of Directors have decided to
increase the subscribed and paid up capital of the Company by issue
of 1,00,00,000 equity shares of Rs. 10 each by right offer to equity
share holders as on 25thMay, 2019 on proportionate basis and
conditions as laid down, i n application form and in Board resolution.
As a shareholder on the afore mentioned date, being fixed as offer
date, we are pleased to inform you that you are entitled to for the
“rights shares offer” in reference to details as mentioned in the
enclosed application form.
Thanking you.
Yours fait hfully,
For Galaxy Steel I ndustries Ltd
Sd/-
Secretarymunotes.in

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634.4.2 LETTER TO REGISTRAR OF COMPANIES
Letter to Registrar of Companies for filing alteration in the
Memorandum of Association of CompanyGALAXY STEEL INDUSTRIES LIMITED140/A, MIDC, Andheri (E), Mumbai –400093.
www gbs.com Tel: 022 -2222 5588
Ref.: MOA/01/2018 -19
16thJanuary, 2019
The Registrar of Companies ,
Maharashtra State,
Marine Lines,
Mumbai -400020
Sub: Alteration in Memorandum of Association in Name Clause
Sir,
This is to inform you that the Extra Ordinary General Meeting of the
Company was held on 13thJanuary, 2019 at Registered Office of the
Company. All members unanimously passed the Resolution No. 0223
to change name of company from ‘Galaxy Steel Industries Limited ’to
‘Galaxy Steel India Limited’.
Following documents are enclosed for your reference and registration:
1)Form INC –22 along with certified copy of Board Resolution
2)Certificates to be sent along with Form INC -22for registration.
Kindly acknowledge the receipt of documents.
Thanking you,
Yours fait hfully,
For Galaxy Steel I ndustries Ltd.
Sd/-
Secretary
Encl : As abovemunotes.in

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64Letter to Regist rar of Companies for filing alteration in the
Articles of Association of CompanyGALAXY STEEL INDUSTRIES LIMITED140/A, MIDC, Andheri (E), Mumbai –4000 93.
www gbs.com Tel: 022 -2222 5588
Ref.: AOA/01/2018 -19
16thJanuary, 2019
The Registrar of Companies ,
Maharashtra State,
Marine Lines,
Mumbai -400020
Sub: Alteration in Articles of Association
Sir,
This is to inform you that the Extra Ordinary General Meeting of the
Company was held on 13thJanuary, 2019 At Registered Office of the
Company. All members passed the Special Resolution No. 0224
altering 22ndclause of Articles of Asso ciation regarding qualification
shares of directors.
The original article was that directors shall hold at least 5 equity shares
(qualification shares) of Rs. 100/ -each. The same has now been
altered as the director should hold at least 10 equity share s
(qualification shares) of Rs.100/ -each in the company.
Following documents are enclosed for your reference and registration:
1)Duly filled Form No. MGT -14
2)Copy of Special Resolution
3)Explanatory Statement annexed to the notice of the General
Meeting at w hich the special resolution was passed
4)Copy of new Articles of Association
5)Filing fees cheque
Kindly acknowledge the receipt of documents.
Thanking you,
Yours fait hfully,
For Galaxy Steel I ndustries Ltd.
Sd/-
Secretary
Encl : As above
Encl : 1) Form INC –22 along with certified copy of Board Resolution
2) Certificates to be sent along with Form INC -22munotes.in

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654.4.3 LETTER TO STOCK EXCHANGE
Letter to Stock Exchange for Listing of SharesGALAXY STEEL INDUSTRIES LIMITED140/A, MIDC, Andheri (E), Mumbai –400093.
www gbs.com Tel: 022 -2222 5588
Ref.: SE/01/2018 -19
16thJanuary, 2019
The Secretary,
The Bombay Stock Exchange Ltd.
Mumbai -400020
Sub: Application for Listing of Shares
Sir,
This is to inform you that the Board Meeting was held and
resolution no. 0656 dated 10thJanuary 2019 is passed, for
making application for listing of shares with your stock exchange
for is sue size of Rs. 50 crore.
Following documents are enclosed for your reference and
registration:
1)Duly filled Application Form
2)Copy of Memorandum and Articles o Association
3)Certified copy of the Certificate of Incorporation
We shall complete the listing procedure as per guidelines of
Bombay Stock Exchange.
Thanking you,
Yours fait hfully,
For Galaxy Steel Indu stries Ltd.
Sd/-
Secretary
Encl : As abovemunotes.in

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664.4.4 LETTER TO GOVERNMENT FOR CONVERSION /
RECONVERSION OF COMPANYGALAXY STEEL INDUSTRIES LIMITED140/A, MIDC, Andheri (E), Mumbai –400093.
www gbs.com Tel: 022 -2222 5588
Ref.: Gov/01/2018 -19
16thJanuary, 2019
The Secretary,
The Ministry of Corporate Affairs,
Government of India,
New Delhi -1
Sub: Conversion of private company to public company
Sir,
This is to inform you that an Extra -ordin ary general meeting of the
company was held on 4thJanuary 2019. The members unanimously
passed special resolution for conversion of private company into
public company.
We have submitted require documents to Registrar of Companies,
Mumbai, Maharashtra and requested to issue new Certificate of
Incorporation.
We request you to consider our application for the proposed
conversion and do the needful.
Thanking you,
Yours fait hfully,
For Galaxy Steel I ndustries Ltd.
Sd/-
Secr etary
Encl : 1) Copy of Special Resolution
2) New se t of Articles of Associationmunotes.in

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674.4.5 LETTER TO BANK FOR OVERDRAFT FACILITYGALAXY STEEL INDUSTRIES LIMITED140/A, MIDC, Andheri (E), Mumbai –400093.
www gbs.com Tel: 022 -2222 5588
Ref.: bank/01/2018 -19
16thJanuary, 2019
TheManager,
State Bank of India
Malad (E) Branch,
Mumbai -400097
Ref. No. : Current A/c No. 1234567890
Sub: Request to grant overdraft facility
Sir,
This is to request you that kindly consider granting u so v e r d r a f t
facility of Rs. 50,00 0/-(Rupees Fift yT h o u s a n d ) for the period
of 1stFebruary 2019 to 30thApril 2019 to meet our working
capital requirement.
We would like to offer our assets as security against the
overdraft facility. We will remain committed in honouring the
payments in due time. We a re willing to bear the interest rates
on the overdraft that may be levied from time to time.
We expect that you will find above mentioned security adequate
and agree to provide us overdraft facility. We shall complete
other formalities after hearing from you.
Your early favourable reply will be very much appreciated.
Thanking you,
Yours fait hfully,
For Galaxy Steel Indu stries Ltd.
Sd/-
Secretary
Encl : As abovemunotes.in

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684.5SUMM ARY
Correspondence refers to communica tion in writing. It is an
exchange of ideas, information, views and opinions in a respect of
certain matters in a written form. The secretary receives letter from
various concerned parties such as shareholders, directors, stock
exchange, bankers’, credito rs and others. So the secretary has to
reply to them promptly.
Shareholders are the owners of the business since they
contribute to the capital of the company. The circumstances under
which secretarial correspondence takes place with the members of
compan y are for company meeting, issue of shares, call on shares,
transfer and transmission of shares, payment of dividend,
termination of membership and so on.
Debenture refers to the debt (loan) instrument issued by
company under its common seal. Debenture ho lders are creditors
of the company. The circumstances under which secretarial
correspondence takes place with the debenture holders of company
are allotment of debentures, issue of debenture certificate, payment
of interest on debentures, conversion of con vertible debentures into
equity shares, redemption of debentures and so on.
The Registrar of Companies (ROC) is appointed by the
Central Government to register and supervise matters relating to
registration of companies under Company Act. They also contr ol
affairs of the company. The circumstances under which secretarial
correspondence takes place with the ROC as are Filing statutory
report, Submission of Return of Allotment of share, Filing annual
return, Extension time for holding AGM, Filing special re solutions,
Alterations in MOA and AOA, Conversion and reconversion of
company and so on.
Stock Exchange is a market place where buying and selling
of securities is done which is already issued by company. The
circumstances under which secretarial corres pondence takes place
with the Stock Exchange are Listing of securities, Informing about
alteration in Memorandum of Association, Information about Board
Meeting and AGM, Information about issue of Bonus Shares and
Right issue, Submission of Annual Report a nd so on.
Securities and Exchange Board of India (SEBI) is a
regulatory body of the Government of India. It controls the
securities market. The circumstances under which secretarial
correspondence takes place with the SEBI are complaints related to
invest ors and shareholders, reply to notice and circulars received
from SEBI and other information required by SEBI.munotes.in

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69The Company Law Board has framed Company Law Board
Regulations 1991prescribing the procedure for filing the
applications/petitions before it by any investor and shareholders on
oppression and mismanagement of the company .The
circumstances under which secretarial correspondence takes place
with the Company Law Board are Conversion or reconversion of
company, Alteration to Memorandum and Articles of Association,
Petition filed by any investor and shareholders and so on.
In the past, manager used to dictate memo and letters, while
the secretary used to type them. Today’s secretaries are exposed to
office technology/automation including the Internet t hat makes work
easier, fast, accurate and reduced the cost and wastage of
resources.
4.6EXERCISE
FILL IN THE BLANKS
1)The secretary undertake correspondence regarding call on
shares with __________ ( Debenture holders, Stock Exchange,
Shareholders )
2)The se cretary undertakes correspondence regarding payment
of interest with __________ .(Debenture holders, , Sharehol d-
ers, Both )
3)______________ is appointed by Central Government to regi s-
ter and supervise matters relating to registration of companies
under Compan y Act. (Registrar of Companies, Stock Exchange,
Company Law Board)
4)A company has to list (register) its securities with
______________ in order to trading take place in their secur i-
ties. (Registrar of Companies, Stock Exchange, Company Law
Board)
5)_________ ____ controls the securities market. (SEBI, Shar e-
holders, Board of Directors)
6)Investor and shareholders can file the applications/petitions b e-
fore ___________on oppression and mismanagement of the
company. (Board of Directors, Promoters, Co mpany Law Board)
7)Technology _____________ the secretarial correspondence.
(Slows, Mistakes, Speeds)
DEFINE/EXPLAIN THE FOLLWING TERMS
1)Correspondence
2)SEBI
3)Stock Exchange
4)Company Law Board
5)Registrar of Companiesmunotes.in

Page 70

70ANSWER IN BRIEF
1)Explain the various circumstances under whic h company
secretary needs to undertake correspondence with
shareholders.
2)Discuss the various circumstances under which company
secretary needs to undertake correspondence with debenture
holders.
3)Describe the various circumstances under which company
secret ary needs to undertake correspondence with Registrar
of Companies.
4)Elaborate the various circumstances under which company
secretary needs to undertake correspondence with Stock
Exchange.
5)Explain the various circumstances under which company
secretary need s to undertake correspondence with SEBI.
6)Discuss the various circumstances under which company
secretary needs to undertake correspondence with Company
Law Board.
7)Write a note on Role of technology in secretarial
correspondence.
8)Write a letter to sharehold ers informing about right issue.
9)Write a letter to shareholders informing about bonus issue.
10)Write a letter to ROC relating to Alteration in MOA.
11)Write a letter to ROC relating to Alteration in AOA.
12)Write a letter to Stock Exchange informing about listing of
shares
13)Write a letter to Government relating to conversion of
company.
14)Write a letter to Bank for availing overdraft facility.
4.7REFERENCES
https://cleartax.in/s/sebi
http://clb.gov.in/Oraganisation.htm
https://www.caclubindia.com/forum/draft -letter -of-offer-for-right-
issue -381056.asp
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