Podcast
Questions and Answers
What is the purpose of entrenchment in the Articles of Association?
What is the purpose of entrenchment in the Articles of Association?
Under what condition can Mr.Shyamlal secure his position as a director for lifetime?
Under what condition can Mr.Shyamlal secure his position as a director for lifetime?
What is required for the entrenchment provision to be included during the formation of a private company?
What is required for the entrenchment provision to be included during the formation of a private company?
What percentage of votes would Mr.Shyamlal ideally want to require for his removal?
What percentage of votes would Mr.Shyamlal ideally want to require for his removal?
Signup and view all the answers
What must a company do if it includes an entrenchment provision in its Articles?
What must a company do if it includes an entrenchment provision in its Articles?
Signup and view all the answers
What is the primary implication of a special resolution in the context of company articles?
What is the primary implication of a special resolution in the context of company articles?
Signup and view all the answers
Which of the following is NOT a characteristic of a private company regarding entrenchment?
Which of the following is NOT a characteristic of a private company regarding entrenchment?
Signup and view all the answers
What could Mr. Mehra’s warning imply for the future of Mr. Shyamlal’s directorship?
What could Mr. Mehra’s warning imply for the future of Mr. Shyamlal’s directorship?
Signup and view all the answers
Study Notes
Companies Act, 2013 - Section 5
- Entrenchment Provisions: Articles of association can include provisions restricting changes to specific articles, requiring more demanding procedures than a standard resolution.
- Special Resolution: A more stringent method than a simple resolution for altering company articles, often requiring a higher quorum of members and a supermajority to pass.
- Protecting Director Position: A company director can use entrenchment provisions to safeguard their position, making it harder for shareholders to remove them.
- Private vs. Public Companies: Entrenchment clauses can be included on formation or via amendment to the articles. Entrenchment amendments in the case of private businesses require member agreement; in public companies, a special resolution is needed.
- Notice to Registrar: Companies with entrenchment provisions in articles must officially notify the Registrar of their existence to ensure compliance.
- Amendment with 95% Votes: Example: If a company wants to remove a director only when 95% of shareholders approve, this can be included in amended articles subject to such notice.
Studying That Suits You
Use AI to generate personalized quizzes and flashcards to suit your learning preferences.
Related Documents
Description
Explore the key concepts of Section 5 of the Companies Act, 2013, including entrenchment provisions and special resolutions. This quiz highlights the differences in entrenchment clauses between private and public companies and the implications for directors' positions. Test your understanding of these critical legal aspects of company governance.
