“Secretary” means a Company Secretary as defined in clause (c) of sub section (1) of Section 2 of the Company Secretaries Act, 1980 who is appointed by a company to perform the functions of a Company Secretary under this Act.”
As per Section 2(1)(c) of Company
Secretaries Act 1980, “Company
Secretary” means a person who is a member of the Institute.”
Section 8 Companies are not mandatorily required to appoint Company Secretary as defined under Section 2(24) of Companies Act, 2013.
It is pertinent to mention that earlier there was requirement of minimum paid up capital of Rs. 1 lakh or more. However, by virtue of Companies
Amendment Act, 2015 (w.e.f. 29.05.2015), the paid-up share capital requirement of at least Rs. 100,000 is done away with.
It is pertinent to mention that earlier there was requirement of minimum paid up capital of Rs. 5 lakh or more for public companies. However, by virtue of Companies Amendment Act, 2015 (w.e.f. 29.05.2015), the paid-up share capital requirement of at least Rs. 500,000 is done away with.
“Provided further that the time, date and place of each annual general meeting are decided upon before-hand by the directions, if any, given in this regard by the company in its general meeting.”
Provided that annual general meeting of an unlisted company may be held at any place in India if consent is given in writing or by electronic mode by the members in advance.
Provided that the Central Government may exempt any company from the provisions of this sub-section subject to such conditions as it may impose.
“Provided further that the time, date and place of each annual general meeting are decided upon before-hand by the directions, if any, given in this regard by the company in its general meeting.”
Explanation: For the purposes of this sub-section, “National Holiday means and includes a day declared as National Holiday by the Central Government.”
There is some ambiguity in the aforesaid proviso as applicable to Section 8 Companies and further clarification is required.
General Meetings of a Section 8 Company can be called with notice of clear 14 days instead of 21 days.
Section 101 (1): A general meeting of a company may be called by giving not less than clear twenty-one days’ notice either in writing or through electronic mode in such manner as may be prescribed.
Section 136 (1): “Without prejudice to the provisions of section 101, a copy of the financial statements, including consolidated financial statements, if any, auditor’s report and every other document required by law to be annexed or attached to the financial statements, which are to be laid before a company in its general meeting, shall be sent to every member of the company, to every trustee for the debenture-holder of any debentures issued by the company, and to all persons other than such member or trustee, being the person so entitled, not less than twenty-one days before the date of the meeting.”
Section 149 (1): Every company shall have a Board of Directors consisting of individuals as directors and shall have:
(a) a minimum number of three directors in the case of a public company, two directors in the case of a private company, and one director in the case of a One Person Company; and
(b) a maximum of fifteen directors:
Provided that a company may appoint more than fifteen directors after passing a special resolution.
- Requirement of minimum number of Independent Directors (149 (4), (5)),
- Independent Director as defined in the definition of Independent Director (149 (6)),
- Declaration (regarding circumstances/change in circumstance which may affect his status) by Independent Director (149(7)),
- Applicability of Schedule IV to the Company and Independent Director (149(8)),
- Entitlements to Independent Director (149(9))
- Tenure of Independent Director (149(10) & (11)
- Liability of Independent Director (149(12)(i))
- Inapplicability of Section 152 (6) & (7) to Independent Directors (149(13)
As the provisions relating to appointment of Independent Director are not applicable to Section 8 Company, accordingly, the said proviso is also not applicable.
In respect of the said section, a circular no. 38/2014 dated 14.10.2014 has also been issued by MCA in which it has been clarified that in respect of cases pertaining to director appointment under Section 160 of Companies Act, 2013, the Board of directors of a section 8 company shall decide as to whether the deposit made by or on behalf of the person failing to secure more than twenty-five percent of the valid votes is to be forfeited or refunded.
Provided that the maximum number of public companies in which a person can be appointed as a director shall not exceed ten.
Explanation I: For reckoning the limit of public companies in which a person can be appointed as director, directorship in private companies that are either holding or subsidiary company of a public company shall be included.
Explanation 2: for reckoning the limit of directorships of twenty companies, the directorships in a dormant company shall not be included.”
A person appointed as Director in 20 Companies can still be appointed as a Director in Section 8 Company.
Section 173: “Every company shall hold the first meeting of the Board of Directors within thirty days of the date of its incorporation and thereafter hold a minimum number of four meetings of its Board of Directors every year in such a manner that not more than one hundred and twenty days shall intervene between two consecutive meetings of the Board.”
(a) For the words “one-third of its total strength or two directors, whichever is higher” the words “either eight members or twenty-five per cent of its total strength whichever is less” shall be substituted.
(b) The following proviso shall be inserted, namely:
“Provided that the quorum shall not be less than 2 members”.
Quorum requirement in respect of Board Meetings of Section 8 Companies has been changed as 8 directors or 25% of total strength whichever is less, subject to minimum of 2 directors.
Majority of Independent Directors are not required for Audit Committee of Section 8 Company.
(d) to borrow monies;
(e) to invest the funds of the company;
(f) to grant loans or give guarantee or provide security in respect of loans;
(a) with a body corporate in which such director or such director in association with any other director, holds more than two per cent shareholding of that body corporate, or is a promoter, manager, Chief Executive Officer of that body corporate;
(b) with a firm or other entity in which, such director is a partner, owner or member, as the case may be,
shall disclose the nature of his concern or interest at the meeting of the Board in which the contract or arrangement is discussed and shall not participate in such meeting”
The Director of a Section 8 company, being an interested director, whether directly or indirectly, is required to disclose his interest in a transaction, arrangement or contract and abstain from participating in the relevant Board meeting if the value of such transaction exceeds Rs. 1 Lakh.
Provided that nothing contained in this sub section shall apply to a company in which twenty-six per cent or more of the paid-up share capital is held by the Central Government or one or more State Governments or both, in respect of loans provided by such company for funding Industrial Research and Development projects in furtherance of its objects as stated in its memorandum of association.
Loan on lower interest rate can be given if twenty-six per cent or more of the paid-up share capital is held by the Central Government or one or more State Governments or both and if loans provided by such company for funding Industrial Research and Development projects in furtherance of its objects as stated in its memorandum of association.