...Charges under Companies Act, 2013 What is a Charge? A charge is a right created by any person including a company referred to as “the borrower” on its assets and properties, present and future, in favor of a financial institution or a bank, referred to as “the lender”, which has agreed to extend financial assistance Section 2(16) of the companies act, 2013 defines charges so as to mean an interest or lien created on the property or assets of a company or any of its undertakings or both as security and includes a mortgage. The following are the essential features of the charge which are as under: 1. There should be two parties to the transaction, the creator of the charge and the charge holder. 2. The subject-matter of charge, which may be current or future assets and other properties of the borrower. 3. The intention of the borrower to offer one or more of its specific assets or properties as security for repayment of the borrowed money together with payment of interest at the agreed rate should be manifested by an agreement entered into by him in favour of the lender, written or otherwise. A charge may be fixed or floating depending upon its nature. Need for creating a charge on company’s assets: Almost all the large and small companies depend upon share capital and borrowed capital for financing their projects. Borrowed capital may consist of funds raised by issuing debentures, which may be secured or unsecured, or by obtaining financial assistance from financial institution...
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...Briefing note for the Human Resources Director: The organisations approach to collecting, storing and The use of H.R data. Purpose: The purpose of this briefing note is to review options to the business regarding the collection, storage and use of collected H.R data. Background: It has been requested that the organisations current policy regarding the above should be reviewed and where necessary, improved/amended based on the findings. Current situation: At present the following data is collected by the Human Resources department; * Personal Data. * Staff Turnover. * Absence Data. * Learning and Development Data. * Cost information. * Survey Data. * Performance of Employees. * Health and Safety. Some of the above data must be collected by law for legislative purposes. Other data is gathered and stored by H.R for use either as benchmarks or as an aide to future business growth. For instance Health and Safety data is stored for legal compliance and includes the storage of accident books and RIDDOR incidents (Appendix 1) that have occurred within the work place. This information may be used by the health and safety officer to reduce the number of accidents. If a number of incidents were reported involving staff using ladders, then a trend may be spotted from the stored accident data. This could then be used and less hazardous equipment utilised. An example of data which is not legally required to be kept, but may be useful...
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...investment decisions’ and he emphasises that this can be achieved by high quality accounting standards. Up to 1970s, there was no uniform system for the preparation of financial statements and different companies used different policies, principles and bases according to their needs. This practice led to inconsistency between the financial statements of different entities or same entities prepared by different people, and made their comparison very difficult for different users. Dyson (2011) highlights this situation as ‘what was particularly puzzling to the public was that at the beginning of the week one set of accountants could decide that a company had made a profit and then by the end of that week another set of accountants would decide that it had actually made a loss’. This prompted the accountancy profession to regulate the accounting information and develop uniform principles and procedures which are today known as accounting standards. Accounting standards are statements of standard accounting practice issued by such body or bodies as may be prescribed by regulations (CA 2006, S464(1)). In the UK Financial Reporting Standards (FRSs) are issued by Accounting Standards Board (ASB) (Dyson, 2011). Companies Act 2006 (S393) requires that financial statements of a company show a ‘true and fair view’ of the transactions made during the accounting period. Accounting standards play an important role to comply with this statutory requirement by outlining the specific procedures...
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...* What is this topic? A sustainability report considers the contribution and impact that non-financial issues have on the company, it can range from Governance to Climate Change. It is a complex concept, but in summary it is “meeting the needs of the present without compromising the ability of future generations to meet their own needs”. – www.sustain.ucla.edu Recently reporting on certain sustainability issues have now become mandatory to report – “UK government announces that under the Companies Act 2006, companies are now required to report their emissions in their directors’ report”. * Why is it important Along with the recent introduction of the G4 standards and the GRI recommendations, the significance of a sustainability report has become progressively more critical as pressures on companies both publically and institutionally to provide and publish reports increases in light of recent natural disasters. It is said that we “use about 40% more resources every year compared to what we put back”, some companies make it their mission to make it known that they give back to the environment e.g. Velvet. There is a need for a measurement system to be put in place to assess industry’s impact however currently accounting is inadequate for numerous reasons. - - http://ezproxy.bcu.ac.uk:2055/science/article/pii/S0155998210000128 The increase in awareness has meant that external users e.g. customers, investors and even shareholders are making decisions based...
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...month for her flat ANS) According to the background information provided we can say that Rachel was responsible for the pre-incorporate contract made on behalf of the company. As Rachel put her name in the contract so she is fully responsible for the contract. This can be backed up by First EEC Company law Directive, Art.7 “if before a company being formed has acquired legal personality, action has been carried out in its name the company does not assume the obligations arising from such actions, the persons who acted shall, without limit, be jointly and severally liable therefor unless otherwise agreed” This was implemented by the European Communities Act 1972,s,9(2) and is currently in effect as the Section 5.1 of the Companies Act 2006. s.51 (1) CA 2006; “a contract which purports to be made by or on behalf of a company at a time when the company has not been formed has effect, subject to any agreement to the contrary, as one made with the person purporting to act for the company or as agent for it, and he is personally liable on the contract accordingly.” Kevin on the other hand is also the part of the contract, so he is the one who can take action against the company in the event of contract not being fulfilled. On the other hand the other three directors think that the contract is not valid as the company did not exist at the time of the contract....
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...TUTORIAL :MEETING PART A H-wan N-wan Bhd is adopting Table A of the Fourth Schedule to the Companies Act 1965 except that proxy shall not be a quorum. Ahya Karim, a newly appointed company secretary, has received a memo issued by the chairman of the company reminding him to carry out board resolutions passed in previous Board meetings. The board meetings were held twice to: a. accept the retirement of Mr. Salmi Roslan as a director. b. authorize advance payment of RM50 000 to director Dato’ Kumar Rajan for official trip to South Korea. c. appoint of Dato Lim Goh Teng as a director to fill in casual vacancy to replace Mr Salmi Roslan. d. propose the retirement by rotation of Tan Sri Ooi Slim Tin and Dato’ Danial Sani Abdullah who agree to be re-elected. e. approve intention of Hafiz Faizal, a shareholder, to remove Mr Saju Kumar and replace him with Miss Rajen Kumaran. f. authorize company secretary to issue share certificate for allotment of 3,000 shares each to Zamani and Salami. g. approve reduction capital of RM0.20 for every existing ordinary share of RM1 each. h. approve the selling of company’s used trucks for RM 55,000 to Mr Bakri Hassan, son of the company’s chairman. i. authorize director to issue new share under Section 132D, Companies Acts 1965. j. approve the Audited Accounts for the year ended 30 June 2009 and the Reports of Auditors thereon. k. approve Directors’ Report and Chairman Statement for 2009...
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... |Suggested evidence to be retained | |. | | | |1. |Each candidate should write a report that|A written report that can be used by Charles Prospect to| | |can be used by Charles Prospect to |give the required presentation to the client | | |deliver his presentation to Bean & Co. |It should clearly describe the personality of a company | | |The report will be assessed for the |separate from its owners and board | | |demonstrated knowledge of the legal |It should also describe the process by which a company | | |formation of a company, forms of |can be formed and registered | | |corporate body and procedures for company|The different forms of corporate body that can be formed| | |formation. Case Study 1 provides |should be clearly described | | |background information for this. | | | | | | | | | | | ...
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...A Critical Examination of the Impact of Section 172 of the Companies Act 2006 There has been a plethora of debate surrounding the approach to directorial decision making in the scheme of corporate governance. A divergence has emerged between numerous schools of thought as to whose interests the directors are to consider in conducting the company’s management. The approach under English law is codified under section 172 Companies Act 2006 (‘CA 2006’) which professes an ‘enlightened shareholder value’ approach to corporate governance. This has given rise to scrutiny and challenge from numerous critics but most notably from proponents of the ‘stakeholder management’ stance. The aim here is therefore to evaluate the scope and impact of section 172 and consider the possible alternatives whilst seeking to establish whether section 172 can be considered a positive development within company law. 1. Previous approach Under the common law, directors were required to act in good faith in what they believed to be in the company’s best interests. The main problem was that the company is a legal abstraction and acting in the ‘company’s interests’ is a fairly obscure and elusive concept; thus reform was necessary so that directors could ascertain what the ‘company’s interests’ actually entails i.e. whose interests it is referring to[1]. Moreover, under section 309 Companies Act 1985, directors were to have regard to the ‘interests of the company's employees in general...
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...It is an official document governing the running of a company that is placed with the Registrar of Companies. The articles of association constitute a contract between the company and its members, set out the voting rights of stockholders and the conduct of stockholders' and directors' meetings, and detail the powers of management of the company. A memorandum of association is a related document. The Articles of Association contain, as per the law requires, provisions on the company name, address and domicile, the purpose of the company, the amount of share capital and the contributions made thereto, the number, the par value and the type of shares, the calling of a general meeting of shareholders and the voting rights of them, the bodies for the administration and the audit, and the form in which the company shall publish notices. The Articles of Association (AA) contain the rules and regulations of the internal management of the company. The AA is nothing but a contract between the company and its members and also between the members themselves that they shall abide by the rules and regulations of internal management of the company specified in the AA. It specifies the rights and duties of the members and directors. Articles of association are simply the basic internal rules of operation for a business or non-profit organization that govern what tasks need to be done, what positions are required to perform the necessary functions, and how the processes in place are to be performed...
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...Discuss the procedure to incorporate a public company in Malaysia. The law relating to incorporation of a company in Malaysia is governed by the Malaysian Companies Act, 1965. As per the act any company doing business or wishing to do business in Malaysia must register with the Companies Commission of Malaysia (CCM) under the Companies Act 1965. To incorporate a company, a person must apply the application of search name. A name search must be conducted to determine whether the proposed name of the company is available. Refer to Government Gazette No. 716 dated 30 January 1997, Gazette (Amendment) dated 11 October 2001, Guidelines For Naming A Company and Guidelines For Application Of A Company Name. The steps involved are completion and submission of Form 13A CA (Request For Availability Of Name) to SSM and Payment of a RM30.00 fee for each name applied. Where the proposed company’s name is approved by SSM, it shall be reserved for three months from the date of approval. A person must lodgment of incorporation documents. Incorporation Documents must be submitted to SSM within 3 months from the date of approval of the company’s name by SSM, failure of which a fresh application for a name search must be done. An original of the Memorandum and Article of association shall each be stamped at RM100.00. Stamps are affixed at the Inland Revenue Board’s stamp office. The first directors and secretaries shall be named in the Memorandum and...
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...Overseas companies registered in the UK GPO1 March 2015 Companies Act 2006 Is this guidance for you? This guide will be relevant to you if: • you are an overseas company thinking of opening a UK establishment • you are an overseas company with a UK establishment looking for basic guidance on your continuing filing and disclosure obligations • you act as an adviser to an overseas company and are looking for guidance on registration and disclosure requirements in the UK GPO1 March 2015 – Version 3.1 Companies Act 2006 Page 2 of 22 Contents Introduction Chapter 1. Who needs to register? Chapter 2. Registration Chapter 3. Delivery requirements Chapter 4. Changing the accounting reference date or accounting requirements Chapter 5. Disclosure requirements Chapter 6. Insolvency, winding up and closure Chapter 7. Quality of documents Chapter 8. Further information This guide answers many frequently asked questions and provides information on completing the most commonly used filings relating to this area. The guide is not drafted with unusual or complex transactions in mind. Specialist professional advice may be needed in those circumstances. GPO1 March 2015 – Version 3.1 Companies Act 2006 Page 3 of 22 Companies Act 2006 Introduction This guide explains how to register an overseas company that opens an establishment in the UK. It also provides guidance on the disclosure obligations ...
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...auditors from Encik Zayed’s company should be protected from the unfair dismissals by Encik Zayed. First of all, Encik Zayed cannot simply terminate the auditor and appoint a new “friendly party” auditor. Based on the Companies Act 1965, under Section 172. Appointment and remuneration of auditors, an auditor of a company may be removed from office by resolution of the company at a general meeting of which special notice has been given, but not otherwise. Furthermore, where special notice of a resolution to remove an auditor is received by a company whereby it shall send a copy of the notice to the auditor concerned and to the Registrar. Encik Zayed should do any of these things in order to terminate the auditor in his company by following all the rules and statutory provision of companies act. Furthermore, under the companies act1965, the auditor may, within seven days after the receipt by him of the copy of the notice make representations in writing to the company ( not exciding a reasonable length) and request that, prior to the meeting at which the resolution is to be considered, a copy of the representations be sent by the company to every member of the company to whom notice of the meeting is sent. Encik Zayed should do follow the rules by sending a notice to all the members of the company about the termination of the auditor of the company. This is because the member of the company should know each and every actions that have been taken in the company. In addition, unless the...
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...R. Ravi THE SPATE of nidhi companies failing to repay their depositors on time compounded the woes of the investor community. These depositors, unlike those in unincorporated bodies and collective investment companies, cannot be accused of ignorance or greed in choosing the avenue to invest in as the nidhi companies are recognised under Section 620A of the Companies Act, regulated under its provisions and further registered with the Reserve Bank of India as per the provisions of Section 45IA of the RBI Act 1997 . It is surprising that the nidhi companies, despite being allowed to borrow from and lend only to members against security such as jewels or immovable property, face a liquidity crunch. Some acts of commission and omission by the companies which have become sick are: AAcceptance of deposits without any limit or determination of the deployment of the funds (deposits were accepted even for 280 months in some cases); AInvestment in immovable property to house branch offices that were started arbitrarily; AChange in management; AAdvertisements inviting deposits that violated the provisions contained in the July 6, 1996 government notification. The Government, vide November 1, 1999 notification, directed that nidhi companies, recognised as such under Section 620 A of the Companies Act, shall not carry on any business other than borrowing and lending in its own name. It also listed the other thi ngs nidhi companies are prohibited from doing: Open new branches; open current accounts...
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...Do companies have complete freedom to act Do companies have complete freedom to act? Analyse the doctrine of ultra vires and the proposed reforms in the Companies Bill designed to grant companies full capacity. The doctrine of ultra vires has been fervently debated for many years since its conception in the 19th century, and has caused widespread confusion within the sphere of company law. It will be necessary, in order to construct a thourough and fluidous argument, to outline the history and development of the ultra vires doctrine and why, some would argue, it has become the bane of company law. It will also be necessary to dicuss the relevance of ultra vires to modern company law and the efforts to curtail its widespread influence. The DTI’s White Paper Modernising Company Law, presented to Parliament in 2002 seeks to afford companies the ability to act with unlimited capacity and therefore remove the problems associated with the ultra vires doctrine which will be discussed shortly. This essay will adopt the normative approach that companies, in order to fulfil their potential should have the ability to expand by any means possible to achieve the most economically efficient response. The doctrine of ultra vires is widely regarded as a way in which the company law can be responsive to different bodies and constituencies. The doctrine of ultra vires has been subjected to many reforms and has been highly criticised since it was first introduced, this is largely due to the fact...
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...1 COMPANIES ACT, 1956 FORMATION OF A COMPANY 2 I INCORPORATION OR PROMOTERS OF A COMPANY Before a Co. is formed, there must be some persons who have an intention to form a Co. & who take the necessary steps to carry that intention into operation. IMT NAGPUR - 2011-13 Such persons are called “Promoters”. 3 PROMOTERS OF A COMPANY IMT NAGPUR - 2011-13 It is they who : Conceive the idea of forming the Co.; Take the necessary steps to incorporate it; Provide it with Share & Loan Capital; Acquire the business or property; Negotiates the preliminary agreement; Prepare, execute & register the MOA & AOA; Finds the bankers, brokers, legal advisers, underwriters, first Directors; Prepares, advertises & Circulates the Prospectus for placement of capital 4 PROMOTERS OF A COMPANY IMT NAGPUR - 2011-13 But a person who merely acts in a professional capacity, such as solicitor who draws up an agreement or articles, an accountant or valuer who prepares figures or valuation and who is paid for the same is not a Promoter. 5 PROMOTION OF A COMPANY IMT NAGPUR - 2011-13 Incorporation of a Co. means a process by which a Co. is incorporated or brought into being as a Corporate body, and floated as a going concern, by the issue of prospectus. 6 REGISTRAR OF COMPANIES (ROC) IMT NAGPUR - 2011-13 Ministry of Corporate Affairs Registrar of Companies (ROC) 7 FORMATION OF COMPANIES ...
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