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Questions and Answers
What is the maximum penalty for a company and its officers for refusing inspection or making copies required under this section?
Who has the authority to direct an immediate inspection of documents if required?
According to Section 95, what is considered prima facie evidence?
What is the daily penalty for each refusal of inspection by a company or its officer?
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What is the initial step mentioned before understanding the types of meetings according to the Companies Act, 2013?
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What is the definition of a Significant Beneficial Owner (SBO)?
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Which of the following best describes 'significant influence' as per the amended rules?
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What constitutes a 'Majority Stake' according to the Amendment Rules?
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Which scenario would NOT qualify an individual as having direct shareholding in the Reporting Company?
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Which of the following is NOT considered as indirect shareholding?
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Which of the following does not align with the criteria for significant beneficial ownership?
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What does the term 'indirect shareholding' refer to?
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Which of these best describes the relationship between SBO and Majority Stake?
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What is the maximum number of days a company may close its register at one time?
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What is the minimum notice period required before closing the registers for security holders?
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Which of the following is NOT part of the notice procedure for closing registers?
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For companies intending to list their securities, what additional notice criteria might apply?
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What must a company do if it intends to close its register for security holders?
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What is the role of SEBI in the closure of registers for listed companies?
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Which is an acceptable method of notifying about the closure of registers?
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Which of the following statements about the closure of registers is true?
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What must be included in the registers maintained under section 88 regarding nominees?
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Who is responsible for authenticating entries in the register of members?
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In the case of a minor being allotted shares, what is required to enter their name in the register?
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What action can joint holders of shares take regarding their names in the company records?
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What detail must be mentioned alongside the authentication of entries in the register?
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What should be done if a minor is allotted shares and a guardian's details are not available?
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Which of the following is NOT a requirement for maintaining the register of members?
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What implication does joint shareholding have on the company's register?
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What is the prescribed form for the annual return of One Person Company and small company from the financial year 2020-2021?
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Who is required to sign the annual return for a One Person Company?
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Which companies must have their annual return certified by a Company Secretary in practice?
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What is the minimum paid-up share capital for a company to be obliged to have its annual return certified?
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What clause was omitted in Section 92(1) by the Companies (Amendment) Act, 2017?
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To whom does the specified signing rule for private companies apply according to the provision of Section 92?
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What is the purpose of the certification by a Company Secretary in practice in relation to the annual return?
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Which of the following companies must comply with the signing procedure described for small companies under Section 92?
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Study Notes
Nomination Details in the Register
- Form MGT-1 and MGT-2 require details of nominations as per Section 72 of the Act and Rule 19 of the Companies (Share Capital and Debentures) Rules, 2014.
- These nominations must be entered in the register of members, register of debenture-holders, or other security holders.
- Minors are not competent to enter into contracts and cannot be entered in the register of members without guardian details.
- Joint holders of shares can request the company to enter their names in a specific order or execute transfers to split their holdings.
Significant Beneficial Owner (SBO)
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SBO is an individual exercising rights or entitlements in a Reporting Company through:
- Holding 10% shares or 10% voting rights
- Right to receive 10% or more dividends, including direct and indirect holdings
- Exercising significant influence or control in the Reporting Company, directly or indirectly
- Significant influence means the power to participate, directly or indirectly, in the financial and operating policy decisions of the reporting company.
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Majority Stake means:
- Holding more than half of the equity share capital in the body corporate
- Holding more than half of the voting rights in the body corporate
- Right to receive or participate in more than half of the distributable dividend or any other distribution by the body corporate
- Direct shareholding occurs when the shareholder holds shares in their own name or has acquired a beneficial interest under Section 89(2).
- Indirect shareholding occurs when a shareholder is a body corporate, Hindu Undivided Family, partnership entity, trust, or pooled investment vehicle.
- Section 91(2) specifies penalties for contravention of Section 91(1) provisions.
Time Limits for Closure of Registers
- Section 91(1) allows companies to close their registers for a total of 45 days in a year, with a maximum of 30 days at any one time.
- Section 91(1) requires a minimum 7-day notice for closure, or a lesser period specified by SEBI for listed companies.
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Rule 10 of the Companies (Management & Administration) Rules, 2014 specifies the manner of closure:
- The company must publish an advertisement at least once in a vernacular newspaper in the district where the registered office is located, and at least once in an English newspaper circulating in the same district.
- The notice must be published on the website notified by the Central Government and on the company's website, if any.
Abridged Form of Annual Return
- Second Proviso to Section 91(1) allows the Central Government to prescribe abridged forms for annual returns for One Person Companies, small companies, and other specified classes of companies.
- Rule 11(1) requires One Person Companies and small companies to file the annual return in Form No. MGT-7A from the financial year 2020-2021 onwards.
Signing of Annual Return
- The annual return must be signed by a director and the company secretary, or a company secretary in practice if there is no company secretary.
- For One Person Companies and small companies, the annual return must be signed by the company secretary, or by the director if there is no company secretary.
Certification of Annual Return
- Section 92(2) and Rule 11(2) require the annual return of listed companies and companies with paid-up share capital of ₹10 crore or more or a turnover of ₹50 crore or more to be certified by a company secretary in practice.
- The certificate must state that the annual return discloses facts correctly and adequately and that the company complies with all the provisions of the Companies Act, 2013, and must be in Form No. MGT-8.
Penalty for Forcing Inspection or Making Copies
- Section 94 (4) imposes a penalty of ₹1,000 per day, up to a maximum of ₹1,00,000, on a company and its defaulting officers for refusing inspection or the making of extracts or copies required under Section 94.
- Section 94 (5) allows the Central Government to order an immediate inspection or authorize the taking of the required extract by the person requesting it.
Registers and Annual Returns As Evidence
- Section 95 states that the registers, indices, and copies of annual returns are prima facie evidence of any matter directed or authorized to be inserted into them under the Companies Act, 2013.
Meeting Convening Terms
- Companies Act, 2013 provides the procedure for convening meetings.
- Types of meetings are important to understand for convening a meeting.
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Description
This quiz covers the details of nominations required under Section 72 of the Act and the roles of Significant Beneficial Owners (SBO) in a Reporting Company. Understand the regulations surrounding nominations in registers and the implications for shareholders and joint holders. Test your knowledge on corporate law compliance and ownership criteria.
