Companies Act, 2013 Checklist

Private & ConfidentialFirm Name:Client:Audit Period:

Requirements

Conclusions:

Preparer's Signature and Date:

Audit In-charge

Signature and Date:

Signature and Date:

Checklist for compliance with the significant Sections of Companies Act, 1956/ Companies Act, 2013. as applicable relating to Audit

Companies Act Checklist

(i) I have satisfied myself that the above checklists has been properly completed except as stated below.

(ii) All matters requiring the attention of Audit Partner are set forth in Audit Disposal Notes.

Review Manager (i) I have reviewed the work done by the assistant-in-charge and have satisfied myself that the above checklist have been satisfactorily completed.

(ii) Working Papers Reviewed(iii) Agree with the conclusions above

Compliance

No Reportable Issues

Checklist for compliance with the significant Sections of Companies Act, 1956/ Companies Act, 2013. as applicable relating to Audit

(i) I have satisfied myself that the above checklists has been properly completed except as stated below.

(ii) All matters requiring the attention of Audit Partner are set forth in Audit Disposal Notes.

(i) I have reviewed the work done by the assistant-in-charge and have satisfied myself that the above

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Checklist for compliance with the significant Sections of Companies Act, 1956 / Companies Act, 2013, as applicable relating to Audit

SUBJECT/SECTION Act Reference REMARKS

Private Company

Section 2(68) 2013 Act

(a) Restricts the right to transfer its shares;

(c)Prohibits any invitation to the public to subscribe for any securities* of the Company;

Public Company


Check that the company(i) is not a Private Company;

(iii) is a Private Company which is a subsidiary of a non-private company

Holding Company and Subsidiary company

Section 2(46) - Holding company 2013 Act

2013 Act

A subsidiary company is a company in which the holding company:(i) controls the composition of the Board of directors; or

Explanation:

(c) Company includes any body corporate

Compliance(Yes/No/NA)

Check that the company has a minimum paid up capital of Rs. 1 lakh or such higher paid-up share capital as may be prescribed, and by its articles:

(b) Except in the case of a One Person Company, limits the number of its members to 200 (excluding members who are employees or ex-employees);

*Defined in Section 2(81) as securities as defined in clause (h) of section 2 of theSecurities Contracts (Regulation) Act, 1956. Section 2(81) has also been notified vide Notification dated September 12, 2013

(ii) has a minimum paid up capital of Rs. 5 lakhs or such higher paid up capital, as may be prescribed;

A holding company, in relation to one or more other companies, means a company of which such other companies are subsidiary companies

Section 2(87) Notified except for the proviso and explanation (d) - Subsidiary Company/ subsidiary

(ii)exercises or controls more than one-half of the total share capital either at its own or together with one or more of its subsidiary companies

(a) A company shall be deemed to be a subsidiary company of the holding company even if the control referred to in (i) and (ii) above is of another subsidiary company of the holding company

(b) Composition of the Company's Board of Directors shall be deemed to be controlled by another company if that other company by exercise of some power exercisable by it at its discretion, can appoint or remove all or a majority of the directors

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SUBJECT/SECTION Act Reference REMARKSCompliance(Yes/No/NA)

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Private Company being a subsidiary of Body Corporate outside India.

Section 4(7)Check that(i) Indian Company is a Private Company(ii) It is a subsidiary of body corporate incorporated outside India

The company would be deemed as subsidiary of Public Company if:

(a) The foreign body corporate, would be a public company if incorporated in India; and

Branch OfficeSection 2(14) 2013 ActCheck whether the establishment has been described as such by the CompanyAlteration of Memorandum of Association

Section 16, 17 &18 1956 ActCheck that

(a) Alteration is falling under any purpose specified in section 17(1)(a) to (g)(b) Special resolution has been passed

(a) Alteration falls under any purpose specified in section 17(1)(a) to (g)(b) Special resolution has been passed(c) Central Government has confirmed the alteration(e) The Registrar of each state issued the certificate registering the alteration

Change of Registered Office within a State

Section 17 A 1956 ActCheck that

Change of name by companySection 21 1956 Act

(b) The entire share capital of the Indian Private Company is not held by that foreign body corporate, either alone or with other foreign bodies corporate

(i) In respect of alteration to object clause :

(ii) In respect of shifting of registered office from one state to another

(f) Any extension of time for filing the Central Government order with the Registrar of Companies was sought. If so whether the documents filed within the extended period. [Section 18(4)]

Verify Form 21: Notice of the court or the company law board orderVerify Form 23: Registration of resolution(s) and agreement(s)

(i) Application has been made to the Regional Director for confirmation of shifting of registered office from the jurisdiction of one Registrar to that of another within the same State

(ii) Special resolution was passed under the proviso to sub section (2) of Section 146 in this behalf

Check whether special resolution and approval for change in name from Central Government has been obtained

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(ii) Rectification of name is governed under section 22)Registration of change of name and effect thereofSection 23 1956 ActCheck whether the details are filed with Registrar of Companies

(Note: (i)Above exclude the cases wherein there is only addition/deletion of the word "Private" consequent to conversion in accordance with the provision of the Act

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Alteration of Articles of Association

Section 31 1956 ActCheck whether

(ii) special resolution was passed to alter its articles?

Investments to be held in its own nameSection 49 1956 ActCheck whether:(i) the investments of the company are held in its own name(ii) if it is not; the company maintains a register giving details Power of Securities and Exchange Board to regulate issue and transfer of securities etc

Section 24 2013 Act

Deposit not to be invited without issuing an advertisement

Section 58A 1956 ActCheck that:(i) Board Approval was obtained for acceptance of deposits

(iii) The advertisement was issued on the authority and in the name of the board

(vii) The private company complied with the provisions of Section 3(1)(iii)(d)(viii) Deposits accepted are within the limits laid down under relevant Rules

(x) The rate of brokerage does not exceed the ceiling fixed in this regard

(i) the articles of the company were altered in accordance with any conditions contained in the Memorandum?

(iii)CG approval has been obtained, where alteration has effect of converting a public company into a private company; same has been filed with Registrar of Companies

In respect of listed companies or companies intending to be listed, except as provided in the 2013 Act, the provisions contained in Chapters III (Prospectus and Allotment of Securities), IV (Share Capital and Debentures) and Section 127 (Punishment for failure to distribute dividends), in so far as they relate to issue and transfer of securities and non-payment of dividend, check whether SEBI guidelines in this respect have been complied with?

(ii) The advertisement bears the date of approval of the text of advertisement approved by the Board of Directors

(iv) The advertisement contained particulars specified in Companies (Acceptance of Deposits) Rules, 1975

(v) A copy of the advertisement duly signed by the majority of directors was filed with the Registrar for registration before publishing the same

(vi) The advertisement was issued within 90 days after the date on which it was delivered to the Registrar.

(ix) Rate of interest on deposits does not exceed the ceiling fixed by the Government from time to time. (Currently 12.5% per annum)

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Ensure compliance of the Section by completing the Section 58A ChecklistSmall Depositors

Section 58AA 1956 ActCheck whether:

Default in acceptance or refund of deposits to be cognizable Section 58AAA 1956 ActCheck whether:

Construction of reference to offering shares or debentures to the public etc.Section 67 1956 ActCheck (i) Any offer of shares or debentures is made to the public.

Allotment of securities by companySection 39 (Notified except sub-section (4)) 2013 Act

(xi) Deposits or invest not less than 15% of the deposits maturing during the year ending on 31st March next, on or before 30th April of each year in specified securities

(i) The Company has “Small Depositor” i.e. a depositor who has deposited in a Financial Year a sum not exceeding Rs. 20,000 in a company and includes his successors, nominees and legal representatives

(ii) In case of default in repayment of deposits or part thereof or any interest thereupon to any small depositor, intimation was sent to Regional Bench of the NCLT/CLB within sixty days from the date of default and thereafter at the end of every month.

(iii) waiver of interest accrued on deposits is mentioned by company on every advertisement and application from inviting deposits thereafter

(iv) company has obtained any loan for working capital after acceptance of small deposit, if yes, same is utilised for repayment of whole or part or for payment of interest

(i) Any offence is committed connected with or arising out of acceptance of deposit u/s 58A or 58AA

Note: Such offence notwithstanding anything contained in section 621 and 624 shall be cognizable under the Code of Criminal Procedure

(ii) Such offer shall not be treated as made to the public, if the offer or invitation can properly be regarded as not being calculated to result, directly or indirectly in the shares or debentures being made available to the public.

(iii) However, if such offer or invitation is made to fifty or more persons, it would be considered as if offer has been made to public.(Applicability: Other than NBFC & Public Financial Institutions)

In case of allotment of securities offered to public for subscription, check before allotment whether:

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*Rules yet to be notifiedApplication for and Allotment of shares or debenturesSection 72 1956 ActCheck that:

(iv) Allotment was made within 120 days from the date of opening of issueVerify Form 2: Return of AllotmentSecurities to be dealt with in stock exchangesSection 40 (Notified except sub-section (6)) 2013 ActCheck whether:(i) application is made to the recognised stock exchange for permission

Return of allotment

Section 75 1956 Act

(i) the amount disclosed in the prospectus as minimum amount has been subscribed; and the sums payable on application for the amount so stated have been paid to and received by the company by cheque or other instrument

(ii) the amount payable on application on every security being not less than 5% (or such other percent as may be specified by SEBI) of the nominal amount has been received

(iii) If the minimum amount has not been subscribed and sum payable on application not received wihtin 30 days from the date of issue of prospectus (or such other period as may be specified by SEBI), whether the amount received has been returned within such time and manner as prescribed?*

(i) If the company is listed / proposed to be listed, allotment is made only after the Company receives a minimum subscription of 90% of total amount.

(ii) If a prospectus was issued, no allotment was made until the beginning of the 5th day after the date on which the prospectus was first so issued or such later time as specified in the prospectus

(iii) Where a public notice was given u/s 62, no allotment was made until the beginning of the 5th day after such public notice

(ii) prospectus states that application is made, and disclosesthe names of the stock exchanges in which the securities shall be dealt with

(iii) Whether monies received from public on application for subscription to the securities have been kept in a separate bank account in a schedule bank and have been utilised only for:

(a) adjustment against allotment of securities where the securities have been permitted to be dealt with in the stock exchange(s) specified in the prospectus

(b) repayment of monies within the time specified by SEBI, received from applicants in pursuance of the propsectus, where the company is unable to allot securities

(iv) Whether any condition purporting to require or bind any applicant for securities to waive compliance with any of the requirements of this section has been treated as void

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Check whether:(i) Return of allotment filed with the Registrar of Companies.(a) In case of bonus shares stating the number and nominal amount of shares and names, addresses and occupation of allottees together with a copy of the resolution authorising the issue.

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(ii) The Return is not required if it is reissue of forfeited shares for non payment of calls

Verify Form 2: Return of AllotmentPower to pay certain commission etc.

Section 76 1956 ActCheck whether:(i) such payment authorised by Articles of Association

Section 77 1956 ActCheck that:

(a) a banking company lending money in its course of business

(b) In the case of shares allotted otherwise than in cash together with the verified and stamped copies of the contracts constituting the title of the allottees together with contract of sale or contract of service or other consideration in respect of which allotment was made and a return stating the number and nominal amount of shares, the paid-up value to be deemed and the consideration for which they are allotted.

(c) In the case of shares issued at discount, together with a copy of resolution authorising the issue, a copy of the CLB / NCLT’s order sanctioning the issue and the order of the Central Govt. permitting the issue at a discount higher than 10 per cent.

(ii) Rate does not exceed the rate authorised by the Articles of Association or 5%/2.5% of the price at which shares/debentures respectively issued whichever is less

(iii) Statement of amount or rate (per cent) of the commission paid or agreed to be paid for underwriting share/ debenture where such shares/debentures are not offered to the public, has been filed;

(iv) copy of contract for the payment of underwriting commission has been filed with Registrar of Companies

(v) The payment of commission and number of shares/debentures agreed to be subscribed were disclosed in the prospectus/statement in lieu of prospectus, as the case may be

Restrictions on purchase by company, or loans by company for purchase, of its own or its holding company's shares

(i) The company is limited by shares or guarantee and has a share capital and the buy-back is due to reduction of capital

(ii) The reduction of capital is effected and sanctioned according to Sections 100 to 104 (reduction of share capital) or Section 402 (Application for relief under oppression or mismanagement)

(iii) No loan, guarantee, security or financial assistance has been given by a public company (and/or a private company which is a subsidiary of a public company) in connection with the purchase or subscription for any shares in a company or its holding company except for

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(b) a company alloting money to trustees for any scheme and/or for the benefit of its employees (either directly or indirectly through trust) for purchase or subscription of fully paid up shares in its or its holding company

(c) a loan given by a company to its employee (other than directors or manager) to purchase its purchases for themselves as beneficial ownership, provided the loan does not exceed six months' salary/wages as at that time

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Power of Company to purchase its own securities

Section 77A 1956 ActWhere there has been a buy-back of shares during the year under review:(i) Check that the buy-back of shares by the Company was out of :

a) Its free reserves orb) Securities Premium Account or

a) The buy-back was authorised by its articles

Check the following aspects of Buyback:The Buy-back cannot: a) be executed 365 days from the date of the preceding offer of the buy backb) in any year, exceed 25% of its total paid up equity capital

d) be executed on partly paid up shares

(a) full and complete disclosure of material facts(b) the necessity for buy back(c) class of security intended for buy back(d) Amount to be invested for buy back(e) Time limit for completion of buy back

(v) Check whether the buy back was :(a) from existing shareholders on proportionate basis(b) From the open market

c) Proceeds of any shares/specified securities, which do not belong to the same kind as the buy-back

(ii) Where the buy-back is more than 10% of the total paid up equity capital and free reserves of the company check whether:

b) A special resolution was passed in company's general meeting authorising buy-back

c) the ratio of all debts owed cannot be more than twice the capital and free reserves post buyback (unless the CG prescribes otherwise)

e) If buyback is of a listed company, then such buyback is in accordance with prescribed SEBI(Buy-Back of Securities) regulations, 1998

f) For companies not covered above, whether such buyback is in accordance with guidelines prescribed by Private Ltd Co & Unlisted Public Ltd Co(Buyback of Securities) Rules, 1999

(iii) Check that an explanatory statement is annexed to the notice of the meeting where the special resolution for buy-back is to be proposed giving

(iv) Check whether the buyback has been completed within 12 months from the date of passing the resolution

(c) From odd lots i.e. smaller than the market lot size as specified by the Stock Exchange

(d) by purchasing securities issued to employees pursuant to stock option or sweat equity

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(a) bonus issue(b) Discharge of subsisting obligations eg. Warrants(c) Stock option/sweat equity schemes(d) conversion of preference shares or debentures into equity shares

(xii) Whether the Notes to Accounts have disclosed the particulars of the buy-back?

Transfer of certain sums to Capital Redemption Reserve AccountSection 69 2013 Act

Prohibition for buy-back in certain circumstancesSection 70 2013 Act

a) through any subsidiary company including its own subsidiary companies; orb) through any investment company or group of investment companies; or

Application of premium received on issue of sharesSection 78 1956 ActCheck that the share premium account is applied for (i) Issue of bonus shares

(vi) Check if the Managing Director and another director have signed an affidavit that the Company's affairs were sound enough to meet its liabilities and remain solvent upto a period of one year from the date of the declaration adopted by the Board

(vii) Check if the securities so purchased were extinguished and physically destroyed within seven days of completion of the buyback

(viii) Check that the Company has not made any further issue/allotment of the same kind of shares within six months of the buyback other than-

(ix) Check whether the Company has maintained a Register for detailing the securities bought back, with consideration paid, date of cancellation, date of extinguishing, date of physical destruction and other particulars

(x) Check whether the relevant forms have been filed with the Registrar and in case of listed companies, with SEBI

(xi) If the Company is listed, whether notifications to the stock exchanges prior and post buy-back was provided?

(i) In case of a buy-back of shares using the Company's reserves during the year under review, check whether a sum equal to the nominal value of shares has been transferred to Capital Redemption Reserve Account

(ii) Check whether the details of such transfer have been disclosed in the Balance Sheet

Ensure that the company has not directly or indirectly purchased its own shares or other specified securities:

c) if a default, by the company, in repayment of deposit or interest payable thereon, redemption of debentures or preference shares or payment of dividend to any shareholder or repayment of any term loan or interest payable thereon to any financial institution or bank, is subsisting.

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(ii) Writing off preliminary expense

Power to issue shares at discountSection 79 1956 ActCheck whether:(i) shares are of the same class which are already issued(ii) resolution at GM passed(iii) Central government approval sought, in circumstances specified in this section(iv) issue of shares at discount is authorised by a resolution in a general meeting

Issue of Sweat Equity SharesSection 79A 1956 Act

(i) the issue is authorised by a special resolution passed in a GM

Power to issue redeemable preference sharesSection 80 1956 ActCheck that:(i) Articles of Association provides for issuance of redeemable preference share

(iii) in writing off the expenses of, or the commission paid or discount allowed on, any issue of shares or debentures of the company; or

(iv) in providing for the premium payable on the redemption of any redeemable preference shares or of any debentures of the company.

(v) resolution specifies the percentage of discount (should not exceed 10%-approval of CG required in case exceed)

(vi) The advertisement was issued within 90 days after the date on which it was delivered to the Registrar.

Where the company (including its foreign subsidiary) is issuing sweat equity shares of a class of shares already issued, check whether:

(ii) the resolution specifies the number of shares, current market price, consideration, class/classes of directors/employees to whom the shares are being issued

(iii) at least one year has elapsed since the date of entitlement of Commencement of business

(iv) for listed companies, that such issue is in accordance to SEBI Guidelines [SEBI (Employees Stock Option Scheme & Employees Stock Purchase Scheme) Guidelines, 1999]

(v) for non-listed companies, that such issue is in accordance with prescribed guidelines[Unlisted Companies (Issue of Sweat Equity Shares) Rules, 2003]

Note: Sweat equity shares are defined in Section 2(88) of the 2013 Act (notified section) as equity shares issued to employee(s) and/or directors at a discount or for consideration other than cash for providing know-how or making available intellectual property rights or value addition, by whatever name called.

(ii) redemption is in accordance with the requirements of (a) to (d) of sub-section 80(1) as given below:

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(b) shares shall not be redeemed unless they are fully paid

Further Issue of CapitalSection 81 1956 Act

(a) redemption should be made out of profits of the company, which is otherwise available for dividend or out of proceeds of fresh issue made for the purpose of redemption

(c ) premium payable on redemption is provided out of the profits or out of the security premium

(d) where redemption is out of profits, a sum equal to the nominal amount of the shares redeemed should be transferred to a reserve fund to be called the capital redemption reserve

Check that at the time of issue of shares by the public company (where issue is not due to options attached to debentures or loans raised by the Company):

(i) The company has completed 2 years after formation or one year from its first share allotment after its formation, whichever is earlier

(ii) These further shares were offered to the equity share holders of the company(as on the date of the offer) in proportion to the capital paid up on those shares as at that date (or as close as possible)

(iii) The offer was made by a notice specifying the number of shares offered and specifying a time limit of a minimum of 15 days from the date of offer for acceptance; failing which the shares were deemed to be declined

(iv) Check that, in accordance with the Articles of Association, the above offer would be deemed to include a right for the person to renounce the shares offered to him in favour of any other person only once and the notice referred to above contains a statement of this right

(v) On expiry of the time limit or on intimation of refusal of offer, the Board can dispose of the shares in a manner beneficial to the Company

(vi) Check if the company has passed a special resolution in its general meeting to issue further shares to any person

(vii) Check that, where such resolution has not been passed, the resolution has been voted on by show of hands or poll by members or their proxies in a majority and the Board has applied to Central Government and obtained Central Government approval

(viii)Where the further issue of capital is consequent to exercise of debenture/loan options for conversion or subscription, check whether Central Government approval has been obtained or if it is in conformity with Government Rules

(ix) Check for Central Government's directions, if any, for such conversion with regard to the financial position of the company, terms of issue of loans/debentures, rate of interest, the capital, loan liabilities, reserves, profits during the preceding 5 years and current market price of the shares

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New issue of share capital to be only of two kindsSection 86 1956 ActCheck that:Share capital of a company limited by shares is only of two kinds:

- With voting rights - With differential rights as to dividend, voting or otherwise2. Preference share capitalCalls on shares of same classto be made on uniform basis.Section 49 2013 ActCheck whether:(i) any calls were made during the year

Power of company to accept unpaid share capital, although not called upSection 50 2013 ActCheck whether:

Payment of dividend in proportion to amount paid-upSection 51 2013 Act

Power of limited company to alter its share capital

Section 94 1956 ActCheck that alteration, if authorised by its articles, had been made by:(i) increase of its share capital by issuing new shares(ii) consolidating/dividing all/any of its share capital into shares of larger denomination

(iii) conversion of shares into stock or vice versa

(x) Check whether, on receipt of the above directives, the company has communicated its non acceptance within 30 days(or such time as allowed by the Court) of such receipt

1. Equity shares

(ii) calls made on uniform basis on all shares falling under that class (referred to as 'same class')

(iii) calls made by resolution passed at the board meeting [Section 292(1)(a) of the 1956 Act; corresponding section 179 (3)(a)of the 2013 Act] Note: For the purpose of thie section, shares of the same nominal value on which different amounts have been paid up shall not be deemed to fall under the same class.

(i) AOA authorises the acceptance of whole or part of the amount unpaid on shares held by the members, even if no part of that amount has been called up

(ii) The member is not entitled to any voting rights in respect of the amount paid by him as set out in (i) above, until that amont has been called up

Check that the company is authorised by its Articles, to pay dividends in proportion to the amount paid up on each share

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(vi) the powers conferred above were exercised by the company in its General Meeting

Notice to Registrar of Increase in share capital or the number of members


Reduction of share capitalSection 100 -104 1956 ActCheck whether (i) Company has reduced its share capital- If so authorised by Articles of Association

(ii) Special resolution was passed for reduction(iii) Tribunal has confirmed the reduction of capital

Alteration of rights of holders of special classes of sharesSection 106 1956 ActCheck whether

Debenture Trust Deed

Section 117A 1956 ActCheck whether:

(ii) Copy of such deed is available for inspection by any member or debenture holders.

(iv) sub-division of its shares into shares of smaller denomination than fixed by the MOA

(v) cancel the shares not taken by any person at the date of passing of resolution and diminishing the amount of the shares so cancelled

Check whether notice of increase of share capital (where company has share capital) and the number of members (where company is not limited by shares) has been filed with the Registrar

(iv) Minutes as approved by the Tribunal and the order of tribunal are filed with Registrar of Companies

(i) Special resolution is passed in a separate meeting of the holders of the class of shares whose rights are getting altered

(ii) The memorandum or articles of the company or the terms of issue of that class of shares provide for such variation.

(i) Trust Deed securing issue of debentures has been formed within such time and in such form as prescribed. Note: The contents of the Trust Deed are governed by SEBI (Debenture Trustees) Regulations, 1993 & time limit for creation of security for debenture issue is specified in SEBI (DIP) Guidelines, 2000 & check for compliance with Guidelines for Issue of Debt Instruments (Chapter X of SEBI Guidelines, 2000)

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Appointment of debenture trustees and duties of debenture trustees

Section 117B 1956 ActCheck whether:(i) The Company has appointed one or more debenture trustees for such debentures.

Liability of a company to create security and debenture redemption reserve

Section 117C 1956 ActCheck whether:

Particulars of charges and registration thereofSection 125(1) 1956 ActCheck whether :(i) The charge created is registerable u/s 125(4)

Verify Form 10: Particulars for registration of charges for DebentureRegistration of charges on properties acquired subject to charge

Section 127(1) 1956 ActCheck whether:

(ii) Subsequently, Company has issued a prospectus or a letter of offer to the public for subscription of its debentures.

(iii) Company has stated the Debenture Trustee(s) consent of such appointment on the face of the prospectus or the letter of offer

(iv) The terms and duties of debenture trustees are in accordance with SEBI (Debenture Trustees) Rules, 1993 and SEBI (Debenture Trustees) Regulation, 1993 & for compliance with SEBI's Guidelines for Issue of Debt Instruments

(i) Company has issued any debentures after commencement of Companies (Amendment) Act, 2000 (i.e. 13-12-2000)

(ii) It has created Debenture Redemption Reserve, to which adequate amount is credited out of the profits of the Company until such debentures are redeemed (as is specified by Central Government).

(iii) Amount credited to Debenture Redemption Reserve can be utilised only for redemption of such debentures.

(iv) In case of a listed company, check whether the Guidelines for Issue of Debt securities (issued by SEBI) have been complied with

(ii) Check the particulars of charges together with the instrument, if any, creating or evidencing the charge is filed with Registrar of Companies

Verify Form 8: Particulars for creation or modification of charges (other than those related to debentures

(i) Where the company has acquired a property subject to a charge falling u/s 125(4), the company has registered such charge

(ii) Check the particulars of charges together with a certified copy of the instrument creating a charge in respect of the acquired property subject to charge.

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Section 128 1956 ActCheck whether:

Particulars in case of commission etc. on debentures


Particulars in case of series of debentures entitling holders pari passu and registration thereof

(i) Any charge registrable u/s 125 (4) has been created to secure a series of debentures

(ii) Check the particulars of the total amount secured by the whole series, date of resolutions authorising the issue of the series, date of debenture trust deed, general description of the properly charged, names of trustees for debenture holders are filed with Registrar together with copy of deed containing charge.

(i) Any commission, discount or allowance has been paid or made either directly or indirectly to any person for subscribing or procuring or agreeing to subscribe or procure any debenture

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Modification of charges


Instrument creating charge to be kept at the registered officeSection 136 1956 ActCheck whether :

Satisfaction of charge

Section 138(1) 1956 ActCheck whether:(i) company has made payment or satisfied in full any registered charge.Verify Form 17: Particulars for satisfaction of chargesRectification by Central Government of register of charges


(ii) If so, petition made to Central GovernmentRestriction on commencement of business

Section 149(1)&(2) 1956 ActCheck whether:Where the company with share capital has issued a prospectus:

Where the company with share capital has not issued prospectus :(i) Directors have paid application and allotment money in cash

(i) Any terms or conditions or the extent of operations of any charge registered u/s 125 are or is modified . If so check whether such particulars of modification is filed with Registrar of Companies

(i) A copy of instrument creating or modifying charge/s, a copy of debentures of the series, if any, required to be registered, has been kept at the registered office.

(i) Company has made any delay/omission /misstatement in filing particulars of charge created/modified, or issue of debentures of a series or intimation of satisfaction of charge to Registrar

(i) It has allotted shares of an amount equal to the minimum subscription after filing prospectus with Registrar of Companies

(ii) Application and allotment money from the directors on the shares taken or contracted to be taken by them has been collected

(iii) Stock exchange permission obtained (where shares are proposed to be listed) and the application money does not become refundable

(iv) Certificate of commencement of business has been obtained from Registrar of Companies

(ii) Statement in lieu of prospectus (Schedule III of the Companies Act, 1956) has been filed with Registrar of Companies

(iii) No shares have been allotted for three days after filing of the statement in lieu of prospectus

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(iv) Certificate of commencement of business obtained from Registrar of Companies

Restriction on commencement of business

Section 149(2A) 1956 ActCheck whether:

(ii) If so, special resolution passed at the general meeting

Note: This section does not apply to a private limited companyAnnual Return to be made by a company having a share capital

Section 159 1956 ActCheck whether:(i) Company has filed the Annual Return in prescribed form in time

Further provisions regarding annual return and certificate to be annexed

Section 161 1956 ActCheck whether:(i) Annual return is duly signed by director and secretary

(iv)Certificate signed by signatories to the return is enclosed stating:

(v) Check whether declaration has been made by a director or secretary (or where no secretary has been appointed, a secretary in whole time practice) stating that provisions of section 149(1)(a), (b)& (c) (regarding commencement of business) has been issued

(vi) Check whether declaration has been made by a director or secretary (or where no secretary has been appointed, a secretary in whole-time practice) stating that provisions of section 149(2)(b) (regarding commencement of business) have been complied with

(i) Company had commenced any business not falling under “main objects” or "other objects” clause of the memorandum and not germane to the business carried on

(iii) If resolution was proposed as special but passed only by a simple majority, whether approval obtained from the Central Government(Section 149(2B))

(ii) Where the Annual General Meeting has not been held by the latest date, check whether a statement specifying the reasons therefore have also been filed along with the Annual Return

(ii) If there is no secretary, Return duly signed by 2 directors including managing director, if any

(iii) In case of a listed company, whether Annual Return is also signed by secretary in whole-time practice

(a) that the facts in the return are as on the date of the Annual General Meeting, correct and complete

(b) That all share/debenture transfers and issue of certificates have been appropriately maintained in the register

(c) In the case of a private company no invitation was given to the public to subscribe to its shares/debentures and

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Place of keeping and inspection of registers and returns

Section 163 1956 Act

Check whether:

(ii) If kept else where check whether:(a) Authorised by a special resolution(b) resolution filed with the registrar within 30 days

Statutory report

Section 165(1) 1956 ActIn the case of a public Company, check whether:

Annual General MeetingSection 166 1956 ActCheck that:

Quorum for meetings of membersSection 103 2013 ActUnless the AOA provides for a larger number:

(d) Where the number of members in the annual return exceeds 50, disclosure that the excess consists of persons who are in employment / former employees who became members and continuing to be members after leaving employment

(i) Register of Members / Debenture-holders, Index of Members / Debenture-holders and Annual Return are kept at registered office

(iii) registers etc. are preserved or destroyed according to Companies (Preservation and Disposal of Records) Rules, 1966

(v) inspection was facilitated as prescribed and copies sent on requisition within ten days

(i) The statutory meeting was held after one month and within 6 months from the date the company was entitled to commence business

(ii) The Statutory Report relating to shares allotted by the Company, receipt of Cash on such Shares, and receipts and payments of the Company have been certified by the Auditor

(iii) The delay in holding the statutory meeting by shorter notice was condoned unanimously by members entitled to attend and vote at the meeting if the report was sent less than 21 days before the meeting

The company holds an annual general meeting, with not more than fifteen months elapsing between one such general meeting and the next

Note: In case of the company's first annual general meeting, it can be held within a period of 18 months from the date of its incorporation

Public company:- 5 members, personally present if the number of members as on the date of the meeting is not more than 1000;- 15 members, personally present if the number of members as on the date of the meeting is more than 1000 but upto 5000- 30 members, personally present if the number of members as on the date of the meeting exceeds 5000

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Private company - 2 members, personally present

If within half an hour the quorum was not present, check whether:

Chairman of the meeting of membersSection 104 2013 Act

Check whether:(i) provisions of Articles of Association followed

On becoming beneficial owner of shares in the company

Section 187-C 1956 Act

Minutes of proceedings of general body and other meetings


(b)Each meeting's proceedings entered in Register within 30 days of meeting

(i) it was cancelled, if the meeting convened upon the requisitionists under section 100 (Calling of extraordinary general meeting) of the 2013 Act which has been notified.

(ii) it was adjourned in any other case for next week to the same day, time and place or as determined by the Board - proviso to be included

If no quorum was present at the adjourned meeting within half an hour, check if the meeting was held with the members present

Note:In case of an adjourned meeting or of a change of day, time or place ofmeeting under (ii) above, check whether the company has given not less than three days notice to the members either individually or by publishing an advertisement in the newspapers (one in English and one in vernacular language) which is in circulation at the place where the registered office of the company is situated.

(ii) chairman was elected from among the members personally present on a show of hands

If a poll was demanded, on the election of chairman whether it was taken forthwith by the chairman elected on a show of hands

Where the company has received a declaration in Form I and/ or Form II from person whose name is entered in the register of members as the holder of shares in that company but does not have beneficial interest in such share, and person having a beneficial interest in shares, check whether:(i) the fact was noted in the register of members (ii) e-Form 22B was filed by the company within 30 days of the date of receipt of declaration

(a) Minutes books are properly maintained for Board, its committee and general meetings

(c) Pages are consecutively numbered and each page initialed or signed and the last page of the record of proceedings was dated and signed by:

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(d) minutes of proceedings were not attached or pasted in the minutes book

(e) minutes contained a fair and correct summary of the proceedings(f) cuttings/alterations were duly authenticated (g) appointments of officers, if any, made at any meeting had been recorded

In case of a board meeting check whether:(a) names of directors present mentioned(b) leave of absence granted was recorded(c) names of directors dissenting from or not concurring in the resolution were recorded


Restriction on appointment of firm or body to office or place of profit under a company


Dividend to be paid only out of profits

1956 ActCheck whether

i) in case of general meeting by the chairman of same meeting within 30 days of the meeting and in the event of his death/ inability by a director authorised by the board for this purpose

ii) in case of board meeting/its committee meeting, by the chairman of the same meeting or succeeding board meeting

Overall maximum managerial remuneration and managerial remuneration in case of absence or inadequacy of profits

(i) overall managerial remuneration was within the limits of 11% of net profits of the company as per sections 349, 350,and 351, exclusive of fees payable to directors for attending Board meetings

(ii) In case of companies having no or inadequate profits, check whether managerial remuneration is paid in accordance with Section II of Schedule XIII. If not, whether CG's approval obtained

Note: Section 2(78) of the 2013 Act (notified section) defines remuneration as any money or its equivalent given or passed to any person for services rendered by him and includes perquisites as defined under the Income-tax Act, 1961;

Also refer Section 309Also refer Section 310Also refer Section 311

Check that no firm or body corporate was appointed or employed in any office or place of profit under the company except as trustee for the debentures holder for a maximum period of five years at a time

Section 205

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(iii) Conditions governing transfer of higher percentage complied with.(iv) Board resolution recommending dividend was passed (v) Register of members was closed in accordance with Section 154(vi) Dividend declared only in Annual General Meeting

(xi) The Board of Directors may declare interim dividend.

Unpaid dividend

Section 205A 1956 ActCheck whether:

Establishment of Investor Education and Protection FundSection 205C 1956 ActCheck that:

(i) Dividend is declared out of profits arrived after providing for depreciation u/s 205(2). (ii) Approval obtained from Central Government, if Dividend is declared without providing depreciation

(iii) The minimum prescribed amount had been transferred in reserves according to the Companies (Transfer of profits to reserves) Rules, 1975, before declaring any dividend (Section 205(2A))

(vii) Dividend warrants dispatched within 30 days to the shareholders or to their order (as described in proviso to Section 207)

(viii) In case of listed company, intimation of dividend declaration sent to stock exchanges

(ix) Compliance with FEMA and FEM (Transfer or Issue of Security by a person resident outside India) Regulations, 2000 in case of dividend/interest paid to Non residents

(x) Compliance with SEBI Guidelines in case of issue of bonus shares, in case of a listed company

(xii) The amount of dividend including interim dividend was deposited in a separate bank account within 5 days of such declaration

(xiii) the amount of dividend including interim dividend so deposited under sub-section (1A) is used for payment of interim dividend:

(xiv) whether provisions contained in sections 205, 205A, 205C, 206, 206A and 207 as far as may be applicable to interim dividend have been complied with.

(i) Unpaid/Unclaimed dividend had been transferred to 'Unpaid dividend Account' to be opened with a scheduled bank within 7 days from the expiry of 30 days from the date of declaration of dividend

(ii) The amount of unclaimed/ unpaid dividend for a period of 7 years from the date of transfer to Unpaid Dividend Account had been transferred to Investor Education and Protection Fund

(iii) If dividend has been declared out of reserves due to inadequacy of profits, whether the Companies (Declaration of Dividend out of Reserves) Rules, 1975, had been complied with, alternatively whether the approval of the Central Government has been obtained before such declaration

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(a) Amounts in the unpaid dividend accounts of companies

(c) Matured deposits with companies;(d) Matured debentures with companies;(e) The interest accrued on the amounts referred to in above four clausesPunishment for failure to distribute dividends within 30 days

Section 127 2013 ActCheck whether:Dividend warrants are posted within 30 days from the date of declaration.Books of account to be kept by company

Section 209(1) 1956 ActCheck whether:(i) Books of account kept at the registered office

Annual accounts and balance sheetSection 210 1956 Act

Form and contents of balance sheet and profit and loss account.Section 211

(i) The following has been credited to the Fund, after they have remained unclaimed or unpaid for a period of seven years from the date they become due for payment:

(b) Application moneys received by companies for allotment of any securities and due for refund;

(ii) If not, whether board resolution passed and notice of the address of the place where books are kept has been made to Registrar within 7 days of decision

(iii) Ensure that the books of account are maintained on accrual basis and according to the double entry system of accounting

(iv) Books of account maintained in good order for a period of 8 years(immediately preceding the previous year) together with their vouchers, invoice and connected records.

Note: Under the 2013 Act, the term 'Books of account' has been defined in Section 2(13) which is yet to notified

Check whether (i) the profit and loss account presented in the annual general meeting is not more than 6 months old

(ii) In the case of first annual general meeting the Profit and loss account the time limit is 9 months

(iii) the period to which the accounts relate should not exceed 15 months which may be extended further by 3 months with ROC permission

1956 Act except for Section 211(3C) - Refer note

Check whether (i) the profit and loss account(PL) and balance sheet(BS) are set out in the format given in (Revised) Schedule VI or near to it (ii) The PL & BS comply with Accounting Standards notified by Central Government (Refer Companies (Accounting Standards) Rules 2006

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Balance sheet of holding company to include certain particulars as to its subsidiaries:


Financial year of holding company and subsidiarySection 213 1956 Act

Board’s Report


(ii) The Board’s report was attached to the Balance Sheet

Note: Section 133 of the 2013 Act (notified section, corresponding to Section 211(3C) of the 1956 Act), states that the Central Government may prescribe the Accounting Standards. However, General Circular No. 15/2013 dated September 13, 2013 clarifies that till the Standards of Accounting or any addendum thereto are prescribed by Central Government in consulation and recommendation of the National Financial Reporting Authority, the existing Accounting Standards notified under the Companies Ac! 1956 shall continue to apply.

Note: Section 2(40) of the 2013 Act (notified section) sets out the definition of financial statements to include—(i) a balance sheet as at the end of the financial year;(ii) a profit and loss account, or in the case of a company carrying on anyactivity not for profit, an income and expenditure account for the financial year;(iii) cash flow statement for the financial year;(iv) a statement of changes in equity, if applicable; and(v) any explanatory note annexed to, or forming part of, any documentreferred to in sub-clause (i) to sub-clause (iv):Provided that the financial statement, with respect to One Person Company,small company and dormant company, may not include the cash flow statement;

Check whether (i) the particulars referred in 212 (i) (a-g) of each subsidiary is attached to the Balance sheet of holding company (ii) Central Government permission obtained for not furnishing the particulars referred in (i) above

If the financial year of the holding company and its subsidiary are not the same, check whether a board resolution was passed for :

(a) making an application to the Central Government under this section, for extension of financial year and to laying of relevant accounts at annual general meeting, holding of annual general meeting and filing of annual return; or

(b) complying with any instructions received from the Central Government for the above.

(i) The Board resolution was passed authorizing chairman or other directors to sign the report on behalf of the Board.

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(v) Directors Responsibility Statement u/s 217(2AA)

Appointment and remuneration of auditors


(vi) intimation of the appointment was sent to the auditors within 7 days thereof

(iii) The report contained the specified particulars, viz., the state of affairs of the company, proposed transfer to reserves, proposed dividends, material changes etc. affecting the financial position, particulars of conservation of energy, technology absorption, foreign exchange earning and outgo

(iv) Statement u/s 217(2A) giving the prescribed particulars under the Act and the Companies (Particulars of Employees) Rules, 1975.

(vi) Fullest explanation on every qualification was given in the Board’s Report, if the auditor’s report was a qualified report

(vii) Where applicable, the report specifies the reasons for failure, if any, to complete the buy-back of Shares within time

In case of listed companies ensure compliance with SEBI Listing Agreement, complete the Corporate Governance Checklist

(i) person appointed as auditor is a Chartered Accountant within the meaning of the Chartered Accountant's Act, 1949 and was not subject to any disqualification as described in Sec 226

(ii) auditors were appointed at the AGM of the company and the remuneration was fixed, or, the manner in which it should be fixed, was determined

(iii) in the case of first auditors, they were appointed by the Board within one month of registration of the company and the remuneration was fixed

(iv) certificate as to limits of audit u/s 224(1B) [a person in full time employment elsewhere or a person/firm who/which at the date of appointment/reappointment holds appointment as auditor of the specified number of companies or more]was obtained from the auditors

Note: (a) In an audit firm, the 'specified number of companies' are the number of companies specified for every partner of the firm who is not in full time employment elsewhere

(b) Where the firm's partner is also a partner of any other firm of auditors, the number of companies in aggregate in relation to the partner shall not exceed the specified number

(c) Where any partner of an auditors' firm also holding office, in individual capacity, as auditor of one or more companies, the number of companies taken into account on his behalf shall not exceed the aggregate.

(d) Section 224(1B) does not apply to a private company with effect from 13.12.2000. However, please refer to ICAI guidelines with respect to the same

(v) if no auditor was appointed in the annual general meeting a notice thereof was sent to the Regional Director in time (section 224A)

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Provisions as to resolutions for appointing or removing auditorsSection 225 1956 ActCheck whether:

(ii) The company has sent a copy of the notice to the retiring auditor on its receipt

Note:

Qualifications an disqualifications of auditorsSection 226 1956 ActNone of the following persons are qualified to be appointed as an auditor of a company:

(ii) a body corporate(iii) an officer or employee of the company

(vi) a person holding any security of that company

(vii) Within 30 days of intimation of appointment, the auditor has informed the Registrar his acceptance/refusal to accept such appointment

(viii) Check that the auditors' appointment/ reappointment was through a special resolution in a company where: 25% or more of subscribed share capital is held singly or in combination with (a) a public Financial institution /Government Company/Central Govt/any State Govt(b)any financial or other institution established by a state/Provincial act where the State Govt holds 51% or more of the capital (c) nationalised bank or insurance company carrying on general insurance business

(i) Special notice is given for a resolution appointing an auditor other than the retiring auditor or to provide that for non reappointment of the retiring auditor.

(iii) Where the retiring auditor has made representation in writing to the company and requests notification to its members, this fact and a copy of the representation should been sent to the members of the company

(iv) where such representation was received too late to be sent to the company's members, whether it was read out at the meeting

(ii) and (iii) apply to removal of first auditors appointed under 224(5) or any auditor appointed under 224(7).

(i) A person who is not a Chartered Accountant within the meaning of the Chartered Accountants Act, 1949

(iv) a person who is a partner or who is in the employment of an officer or employee of the company

(v) a person who is indebted to the company for an amount exceeding Rs.1000 or who has given any guarantee or provided any security in connection with the indebtness of any third person to the company for an amount exceeding Rs.1000

(vii) a person if disqualified as per (ii) to (v) above for any company, will also be disqualified for appointment as auditor of any other body corporate which is that company's subsidiary or holding company or a subsidiary of that company's holding company

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Powers and duties of AuditorsSection 227 1956 ActCheck that Auditors’ Report also states:

Audit of cost accounts in certain casesSection 233B 1956 ActCheck whether:

(ii) Any order from Central Government issued to get a cost audit conducted

(iii) Board resolution appointing the qualified person as cost auditor(iv) Approval of the Central Government to appoint such person

Note: References to officer or employee shall be construed as not including references to an auditor

a) Whether he has obtained all the information and explanations which to the best of his knowledge and belief were necessary for the purposes of his audit;

b) Whether, in his opinion, proper books of account as required by law have been kept by the company so far as appears from his examination of those books, and proper returns adequate for the purposes of his audit have been received from branches not visited by him;

(bb) Whether the report on the accounts of any branch office audited under section 228 by a person other than the company's auditor has been forwarded to him as required by clause (c) of sub-section (3) of that section and how he has dealt with the same in preparing the auditor's report;

c) Whether the company's balance sheet and profit and loss account dealt with by the report are in agreement with the books of account and returns;

d) Whether, in his opinion, the profit and loss account and balance sheet comply with the accounting standards referred to in sub-section (3C) of section 211

e) In thick type or in italics the observations or comments of the auditors which have any adverse effect on the functioning of the company;

f) Whether any director is disqualified from being appointed as director under clause (g) of sub-section (1) of section 274

g) Whether the cess payable u/s 441A has been paid, if not, disclose the amount not so paid. (Applicable when Central Government pronounces the rules in this respect)- Date yet to be notified for this sub-section

Note: The ICAI Announcement dated January 23, 2012 clarified the concern on auditor’s reporting responsibilities on cess under section 441A of the Companies Act,1956 pursuant to clause 4(ix)(a) of CARO,2003, the Council was of the view that the statuary auditor’s report need not contain any comment on section 227(3)(g) of the Companies Act,1956.

(i) the company was required to maintain cost records u/s 209(1)(d) read with Cost Accounting Record Rules

(v) Within 30 days of receipt of a copy of the cost audit report, full information and explanations' were submitted to the Central Government, on every reservation and qualification contained in such report

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Only individuals to be DirectorsSection 253 1956 Act

Appointment of directors and proportion of those who are to retire by rotation

Section 255 1956 ActIn case of public company or its subsidiary check whether:

(ii) such 2/3rd directors have been appointed at the annual general meetingAscertainment of directors retiring by rotation and filling of vacanciesSection 256 1956 Act

Appointment of additional director, alternate director and nominee directors

Section 161 [Except sub-section (2)] 2013 ActCheck whether:

(i) the appointment was made by the Board(ii) the maximum strength fixed by the Board was not exceeded by appointment

Check that:


Section 161 [Except sub-section (2)] 2013 Act

(vi) copy or part of the report was circulated to the members along with the notice of annual general meeting, if required by the Central Government

Check that no individual (who has not been allotted a Director Identification Number u/s 266 B) has been appointed or re-appointed as director of the company

(i) the provisions of the articles require all the directors to retire at the annual general meeting or not less than 2/3rd of the total strength of the board was liable to retirement by rotation at such annual general meeting

Check whether the total number of directors liable to retire by rotation was calculated in the specified manner, and 1/3rd of such directors retired

(i) the AOA authorises the Board to appoint any person, other than a person who failed to get appointed as a director in a general meeting, as an additional director

(iii) the additional director holds office upto the date of next AGM, or the last date on which the AGM should have been held, whichever is earlier

(i) AOA or a resolution of the company passed in general meeting provide for the appointment of alternate directors

(ii) Resolution for appointment of alternate director to act for the original director passed during his absence for a period not less than 3 months from the state in which the meeting of the Board are ordinary held

(iii) In the case of a public company, if the office of any director appointed appointed by the company in general meeting is vacated before the term of the office expires in the normal course, the resulting casual vacancy may be filled by the Board of Directors at a meeting of the Board

Note: The person apponted under (iii) above, holds office only upto the date upto which the director in whose place hs is appointed would have held office if it had not been vacated.

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(i) The consent of the candidate for directorship u/s 257 was duly filed with the company

Director Identification NumberSection 266A 1956 Act

Allotment of Director Identification NumberSection 266B 1956 Act

Prohibition to obtain more than one Director Identification NumberSection 266C 1956 Act

Section 266D 1956 Act

Obligation of company to inform Director Identification Number to RegistrarSection 266E 1956 Act

Obligation to indicate Director Identification NumberSection 266F 1956 Act

Appointment/reappointment of managing or whole time director

Consent of candidate for directorship to be filed with the company and consent to act as a director to be filed with the Registrar

Check whether in a public company or a private company which is a subsidiary of public:

(ii) A director other than those specified has filed his consent to act as the director within 30 days of his appointment

Check whether:(i) any individual intending to be appointed/ already appointed before the commencement of this act has applied to the CG in appropriate form (including e-form) with fee for DIN allotment

(ii) Where a director has been appointed before the commencement of this Act, check that the application to CG for DIN as above is made within 60 days of commencement of the Amended Act

Note: Where an applicant has applied for DIN, he may be appointed and can hold office as a director till he has been allotted with DIN

Check that the DIN allotment has been received within one month from the application submission to CG

Check that the Director has only one DIN and he has intimated the companies in which he holds directorships

Obligation of director to intimate Director Identification Number to concerned company or companies

Check whether the existing director(s) has intimated his DIN to company(ies) in which he is a Director within one month of his DIN receipt from CG

Check whether the company has furnished the DINs of all its directors to the Registrar(or any other officer specified by the CG) in the prescribed form and manner within one week of receipt of such DIN intimation from its Directors

Check that the DIN is quoted by any person or company in all returns/ correspondences relating to the directors

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Section 269 and Schedule XIII 1956 ActCheck whether:

(ii) Board/General meeting resolution passed.

Disqualification of directorsSection 274 1956 Act

Check that the directors did not suffer from any of the following disqualification’s

(b) he is an undischarged insolvent(c ) he has applied to be adjudicated as an insolvent and his application is pending

(i) In case of public company or subsidiary of the public company having a paid up capital of Rs.5 crores or more, Managing Director / Wholetime director / Manager is to be appointed

(iii) Where the condition stipulated in Schedule XIII have been complied with, if not, whether the approval of the Central Government obtained for appointment/re-appointment of managing / whole-time director

(iv) the requirements of section 316 complied with if the managing director was also the managing director of another company.

(v) A notice under section 640B was published as specified in section 640B(2)(b) and attached with the application, if Central Government approval required.

(vi) If the government had not approved the appointment, ensure that managing director etc. vacated his office immediately

Note: Section 2(94) of the 2013 Act (notified section) states that a whole-time director includes a director in the whole-time employment of the company

(Please refer to Guidance Note on Section 227(3)(e) and (f) of the Companies Act, 1956 [Revised])

(a) he has been found to be of unsound mind by a Court of competent jurisdiction and the finding is in force

(d) he has been convicted by a Court of any offence involving moral turpitude and sentenced in respect thereof to imprisonment for not less than six months, and a period of five years has not elapsed from the date of expiry of the sentence

(e) he has not paid any call in respect of shares of the company held by him, whether alone or jointly with others, and six months have elapsed from the last day fixed for the payment of the call

(f) an order disqualifying him for appointment as director has been passed by a Court in pursuance of section 203 and is in force, unless the leave of the Court has been obtained for his appointment in pursuance of that section

(g) such person is already a director of a public company which — (A) has not filed the annual accounts and annual returns for any continuous three financial years commencing on and after the first day of April, 1999; or (B) has failed to repay its deposit or interest thereon on due date or redeem its debentures on due date or pay dividend and such failure continues for one year or more

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No person to be a director of more than 15 companies.Section 275 1956 Act

Removal of DirectorsSection 284 1956 ActCheck that

Board to meet at least once in every three calendar months.Section 285 1956 Act

Quorum for meetings of board of directorsSection 287 1956 Act

General powers of the Board1956 Act

Check that:

Certain powers to be exercised by board only at the meeting1956 Act

Note: Where he has been convicted, a period of 5 years should have elapsed from the date of expiry of the sentence.

Note: Provided that a person shall not be eligible to be appointed as a director of any other public company for a period of five years from the date on which such public company, in which he is a director failed to file annual accounts and annual returns under sub-clause (a) or has failed to repay its deposit or interest or redeem its debentures on due date or pay dividend referred to in clause (B)

Check whether any of the directors of the company were holding directorships in more than 15 companies. (excluding the companies mentioned in section 278)

a ordinary resolution is passed by the company to remove a director before the expiry of his period of office

Check whether a meeting of Board of Directors was held at least once in every 3 months and at least 4 such meetings were held in every year

[In case of a listed company, the gap between 2 consecutive meetings should not be more than 4 months (Refer SEBI Listing Agreement, Clause 49)]

Check whether the number of directors present for every board meeting was 1/3rd of its total strength or two directors, whichever is higher

Section 291

(i) Board did not act or do any thing which was required to be done by the company in general meeting [Refer Section 293 dealing with restrictions on powers of the Board]

(ii) while exercising general powers, the board had followed the provisions of the Companies Act or any other act, or the MOA or AOA of the company or any other regulations duly made by the company in general meeting

Section 292Check whether the following powers were exercised only by means of resolution passed at the meeting of the board:

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Audit Committee:Section 292A 1956 ActIf the paid up share capital of a public company exceeds Rs. 5 Crores check whether:

(i) the Company has constituted an Audit Committee

(v) The annual report of the company discloses the composition of the Audit Committee.

Restrictions on powers of board

(i) to make calls on shareholders for unpaid money on shares,(ii) to authorise buy-back of shares referred to in clause (b) of sub-section (2) of Section 77A, (iii) to issue debentures (iv)to borrow moneys otherwise than on debentures (v) to invest the funds of the company(vi) to make loans

Note: Where board resolutions regarding delegation of powers mentioned in (iv), (v) and (vi) have been made, the total amount has to be specified in each case

(ii) the number of directors are not less than three directors, or such number of other directors as the Board may determine, of which two-thirds shall be directors, other than managing or whole-time directors.

(iii) Every Audit Committee to act in accordance with terms of reference to be specified in writing by the Board.

(iv) The members of the Audit Committee have elected a chairman from amongst themselves.

(vi) The auditors, the internal auditor, if any, and the director-in-charge of finance attend and participate at meetings of the Audit Committee but have not voted on resolutions made at the meetings

(vii) The Audit Committee has discussions with the auditors periodically about internal control systems, the scope of audit including the observations of the auditors and review the half-yearly and annual financial statements before submission to the Board and also ensure compliance of internal control systems.

(viii) The Audit Committee has authority to investigate into any matter in relation to the terms of its reference and have full access to information contained in the records of the company and external professional advice, if necessary.

(ix) The recommendations of the Audit Committee on any matter relating to financial management including the audit report, have been considered by the Board.

(x) If the Board did not accept the recommendations of the Audit Committee, the reasons therefor have been recorded and communicated to the shareholders.

(xi) The chairman of the Audit Committee has attended the Company's AGMs to provide any clarification on matters relating to audit.

In case of listed companies ensure compliance with SEBI guidelines by filling up the Corporate Governance Checklist

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Company to contribute to bona fide and charitable funds etcSection 181 2013 Act

Obtain the copy of the special resolution passed in the general meeting of the company and check that the Board has not taken decisions with respect to the following clauses, except with the consent of the company in the general meeting:

(a) sell/lease/otherwise dispose of the whole or substantially the whole of the company's undertaking(s)*

* Note: The explanation to the Section states that:(i) “undertaking” shall mean an undertaking in which the investment ofthe company exceeds twenty per cent. of its net worth as per the audited balancesheet of the preceding financial year or an undertaking which generates twentyper cent. of the total income of the company during the previous financial year;(ii) the expression “substantially the whole of the undertaking” in anyfinancial year shall mean twenty per cent. or more of the value of the undertakingas per the audited balance sheet of the preceding financial year;

(b) invest, otherwise in trust securities, compensation received by the company as a result of any merger or amalgamation

(c) borrow moneys exceeding the aggregate of the paid up capital of the company and its free reserves, apart from temporary loans obtained from the company's bankers in the ordinary course of business

(d) remit or give time for the repayment of a debt from a director (other than an advance by a banking company to its director in the course of business)

Every special reolution passed by the company in general meeting in case of (c) above, shall specify the total amount upto which monies may be borrowed by the Board of Directors

Note: Net worth, per Section 2(57) of the 2013 Act (notified section), means the aggregate value of the paid-up share capital and all reserves created out of the profits and securities premium account, after deducting the aggregate value of the accumulated losses, deferred expenditure and miscellaneous expenditure not written off, as per the audited balance sheet, but does not include reserves created out of revaluation of assets, write-back of depreciation and amalgamation;

Note: Free reserves has been defined in Section 2(43) of 2013 Act (notified section) to mean such reserves which, as per the latest audited balance sheet of a company, are available for distribution as dividend, excluding(i) any amount representing unrealised gains, notional gains or revaluation of assets, whether shown as a reserve or otherwise, or(ii) any change in carrying amount of an asset or of a liability recognised in equity, including surplus in profit and loss account on measurement of the asset or the liability at fair value.

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Prohibitions and restrictions regarding political contributionsSection 182 2013 ActCheck whether:

(iii) Board resolution was passed

Contribution to any National Defence FundSection 183 2013 ActCheck whether:(i) Board resolution/general meeting resolution passed to this effect

Appointment of sole selling agents to require approval of company in a general meeting

Where the Board has contributed to bonafide charitable and other funds, check whether prior permission of the company in general meeting has ben obtained for contribution in case any cmount the aggregate of which in any financial year, exceeds 5% of the average net profits for the three immediately preceding financial years

(i) the company is not a Government company and has been in existence for 3 financial years or more

(ii) the aggregate of the amount contributed in the financial year does not exceed seven and a half per cent of its average net profits during the three immediately preceding financial years

(iv) political contributions were disclosed in the Profit and Loss account with particulars of the total amount contributed and the name of the party to which such amount was contributed

Notes: 1. For the purposes of this section, political party means a political party registered under Section 29A of the Representation of the People Act, 1951

2. MCA had issued General Circular No. 19/2013 dated December 10, 2013 which clarifies that:(i) Companies contributing any amount or amounts to an .Electoral TrustCompany' for contributing to a political party or parties are not required tomake disclosures required under section 182(3) of Companies Act 2013. It willsuffice if the Accounts of the company disclose the amount released to anElectoral Trust Company. (ii) Companies contributing any amount or amounts directly to a political party or pafties will be required to make the disclosures laid down in section 192(3) ofthe Companies Act, 2013. (iii) Electoral trust companies will be required to disclose all amounts received bythem from other companies/sources in their Books of Accounts and alsodisclose the amount or amounts contributed by them to a political party orparties as required by section 182(3) of Companies Act, 2013.

(ii) the total amount of contribution had been disclosed in the profit and loss account of the financial year to which the amount related

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Section 294 A 1956 ActCheck whether:

Section 294AA 1956 ActCheck whether:

Loans to directors etc. Section 185 2013 ActCheck whether:

(ii) Any loans etc. were provided in contravention of the provisions of this section

(i) Company has appointed a sole selling agent for any area for a term exceeding five years at a time in contravention of the Act

(ii) resolution is passed at first general meeting,approving the appointment of sole selling agent in case same is made by Board of Directors.

Prohibition of payment of compensation to sole selling agents for loss of office in certain cases

Company has paid any compensation to sole selling agent for loss of his office in contravention to the requirements of sub-section 1 (a)-(e)

Power of Central Government to prohibit the appointment of sole selling agents in certain cases

(i) Sole selling agent is being appointment for sale of such goods and services as restricted by Central Government

(ii) Previous approval has been take from Central Government for appointment of an individual, firm or body corporate, who or which has substantial interest in the company.

(iii) Special resolution has been passed and CG approval has been taken for appointment of sole selling agent in case company is having share capital of rupees fifty lakhs or more.

(i) The loan (including loan represented by a book debt) advanced/ guarantee given/ security provided falls under the exemption given in the proviso to this section (Refer note below)

Note: 1. Exemptions are in respect of:

(a) loan given to a managing/ whole-time director: (i) as part of the conditions of service extended by the company to all its employees; or (ii) pursuant to any scheme approved by the members by a special resolution

(b) a company which, in the ordinary course of its business, provides loans or gives guarantees or securities for the due repayment of any loan, on which interest is charged at a rate not less than the bank rate declared by the Reserve Bank of India

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Board's sanction to be required for certain contracts in which directors are interested

1956 ActCheck whether:(i) Exempting provisions contained in subsection 2 were applicableNote: Exemptions under subsection (2) are in respect of:

2. The the expression “to any other person in whom director is interested” means—(a) any director of the lending company, or of a company which is its holding company or any partner or relative of any such director;(b) any firm in which any such director or relative is a partner;(c) any private company of which any such director is a director or member;(d) any body corporate at a general meeting of which not less than twentyfiveper cent. of the total voting power may be exercised or controlled by any such director, or by two or more such directors, together; or(e) any body corporate, the Board of directors, managing director or manager, whereof is accustomed to act in accordance with the directions or instructions of the Board, or of any director or directors, of the lending company.

3. MCA General Circular 03/2014 dated February 14, 2014:In order to maintain harmony wifh regard to the applicability of Seclion 372A of theCompanies Act, 1956, till the same is repeoled ond Section 185 of the Companies Act, 2013 is notified, any guarantee given or security provided by a holding company in respect of loans made by a bank or financial institution to its subsidiary company, exemption as provided in clause (d) of sub-section (8) of Section 372A of the Companies Act, 1956 shall be applicable till Section 186 of the Companies Act, 2013 is notified. This clarification will, however, be applicable to cases where loans so obtained are exclusively utilised by the subsidiary for its principal business activities.

Section 297

(a) purchase/sale of goods or materials from/to the company by any director, relative, firm, partner or private company for cash at prevailing market prices

(b) any contract(s) between the company and any director/relative/firm/partner or private company for sale/purchase or supply of any goods/materials or services in which either the company or director/relative/firm/partner or private company, regularly trades or does business, providing the value of such contracts does not exceed Rs. 5000/- in aggregate in any year

(c) in the case of a banking or insurance company, any transaction in the ordinary course of company's business with any director/relative/firm/partner or private company

(d) Where such contract exceeding Rs.5000 had to be undertaken in emergency and was done without the Board's consent, the Board can give its consent subsequently within three months from the date of contract

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(iv) the particulars of the contract were entered in register of contracts etc. u/s 301

Disclosure of interest by directors1956 Act

Check whether:

(ii) general notice of disclosure had been duly renewed

(iv) notice duly given for changes in directorship/membership etc. by the directorsVerify Form 24AA: Notice by the interested Director

(ii) If not, consent of the board obtained by resolution passed at the board meeting for entering into the contracts in which directors are interested

(iii) Previous approval of the Central Government obtained, if the paid-up share capital of the company is not less than Rs.1 crore

Note: 1. Related party has been defined in Section 2(76) of 2013 Act (notified section) with reference to a company, to mean—(i) a director or his relative;(ii) a key managerial personnel or his relative;(iii) a firm, in which a director, manager or his relative is a partner;(iv) a private company in which a director or manager is a member ordirector;(v) a public company in which a director or manager is a director or holdsalong with his relatives, more than two per cent. of its paid-up share capital;(vi) any body corporate whose Board of Directors, managing director ormanager is accustomed to act in accordance with the advice, directions orinstructions of a director or manager;(vii) any person on whose advice, directions or instructions a director ormanager is accustomed to act:Provided that nothing in sub-clauses (vi) and (vii) shall apply to the advice,directions or instructions given in a professional capacity;(viii) any company which is—(A) a holding, subsidiary or an associate company of such company; or(B) a subsidiary of a holding company to which it is also a subsidiary;(ix) such other person as may be prescribed

2. Relative per Section 2(77) of 2013 Act (notified section) , with reference to any person, means any one who is related to another, if—(i) they are members of a Hindu Undivided Family;(ii) they are husband and wife; or(iii) one person is related to the other in such manner as may be prescribed;

Section 299

(i) The disclosure were duly made by any director who is directly or indirectly interested or concerned in a contract or arrangement

(iii) particulars of interest entered in the register of contracts, etc. in accordance with the provisions of sec. 301

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Interested director not to participate or vote in board's proceedings.1956 Act

Note: The exemption provisions contained in sub section (2) are as follows:

Register of contracts, companies and firms in which directors are interested.1956 Act

Check that:(i) the particulars of Form 24AA are duly entered in the register of contracts

Note: The exemption contained in sub section (3A) are for the following:

Section 300Check whether the exemption provisions contained in the sub- section (2) were applicable, if not, check that:

(i) no director took part in any discussion , or voted on any contract or agreement in which he was interested nor his presence was counted for the purpose of forming a quorum at the time of any such discussion or vote.

(a) a private company which is not a subsidiary or a holding company of a public company

(b) a private company which is a subsidiary of a public company - for any contract/ arrangement between the private company and its holding company

(c) any indemnity contract against loss which the director(s) may suffer due to their giving surety for the company

(d) any contract or arrangement to be / entered into with a public company or private company which is a subsidiary of the public company in which the director is a member holding less than 2% of the paid up share capital or he holds only enough shares to qualify him as a director

(e) a public company or a private company which is a subsidiary of a public company for which CG has notified that this subsection shall not apply/apply with modification

Note: Section 2(49) of the 2013 Act (notified section) defines interested director to mean a director who is in any way, whether by himself or through any of his relatives or firm, body corporate or other association of individuals in which he or any of his relatives is a partner, director or a member, interested in a contract or arrangement, or proposed contract or arrangement, entered into or to be entered into by or on behalf of a company;

Section 301

(ii) the relevant particulars of all contracts or arrangements to which section 297 or section 299 applies are entered in the register

(iii) the register duly placed before the meeting of the board and duly signed by all the directors present

(a) to any contract or arrangement for the sale, purchase or supply of any goods, materials or services if the value of such goods and materials or the cost of such services does not exceed one thousand rupees in the aggregate in any year; or

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Register of directors

1956 Act

(i) The company kept the register of directors at its registered office

Duty of directors etc. to make disclosure

1956 ActCheck that:

Register of directors shareholdings

Section 307 1956 ActCheck that :

(b) to any contract or arrangement (to which section 297 or, as the case may be, section 299 applies) by a banking company for the collection of bills in the ordinary course of its business or to any transaction referred to in section 297(2)(c)

Disclosure to members of director's interest in contract appointing manager, managing director

Where a company enters into a contract for the appointment of a manager of the company, in which any director is in directly or indirectly concerned or interested or an existing contract is varied, then the requirements of this section need to be complied with

Section 303 Check whether: Note: Check whether the register of directors also includes 'deemed directors' i.e. a person in accordance with whose directions/ instructions the Board of Directors of a company is accustomed to act

(ii) The register contained the specified particulars (of all directors including deemed directors) and was up-to-date

Note: The register should contain exhaustive details including particulars of office held-about the directors-including name, surname, former name(s),parent's/ spouse's details, residential address, nationality (and of origin) business, occupation etc. In case of body corporate or its nominees, the name and regd address with its directors details. In case of firm or their nominees, name, address, partners full details.

(iii) Check that return contains the particulars specified in register of directors, managing director, manager and secretary and notification of any change among directors etc.

Section 305

(i) directors including deemed directors, managing director, manager or secretary made necessary disclosure to the company within 20 days of appointment/ relinquishment of the office relating to the another company

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(iii) Cross Check with Disclosure under Clause 49 of the Listing Agreement


Remuneration of directorsSection 309 1956 ActCheck whether:

Provision for increase in remuneration to require Government sanction


(i) Such increase in accordance with Schedule XIII(ii) If not, whether approval of Central Govt. obtained


(i) register was duly kept at the registered office and contained the specified particulars [directors' shareholdings in terms of number, description, amount of any shares/debentures in the company or its subsidiary or its holding company or in a subsidiary of the company's holding company which is held directly by him or in trust for him or if he has any right to become a holder whether on payment or not.]

(ii) The register is open to any member of the public on payment of the prescribed fee for inspection during business hours

Duty of directors and persons deemed to be directors to make disclosure of shareholdings

(i) The director/deemed director has disclosed particulars about himself in writing at a Board meeting [or, if not at Board meeting, ensure disclosure to the Board] to enable the company to comply with the provisions regarding Register of Directors etc.

(i) The payment of remuneration to directors was within the limits and in the manner provided by sections 198, 309 & 310

(ii) The remuneration so paid was in accordance with the provisions of Articles/resolutions passed in General meeting/approval of Central Govt.

(iii) The computation of net profit was done in accordance with the provisions of Sections 349 and 350

(iv) No other remuneration was paid to a director in any other capacity except as permitted

(v) Approval of Central Govt. obtained for payment, if any, made in excess of specified limits

(vi) Excess payment, if any, to a director was duly refunded or Central Govt.'s permission obtained for waiver, if any

In case of a public company or a private company which is a subsidiary of a public company:

Increase in remuneration of managing director reappointment/appointment after Act to require government sanction

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Check that:(i) Increase in accordance with Schedule XIII(ii) No increase in the remuneration effected without Central Govt.'s approval

Prohibition of assignment of office by director


Check that there is no assignment of office made by any director, as it would be void

Director, etc. not to hold office or place of profit


(a) A partner or relative of such director;(b) A firm in which the director/relative of such director is a partner;(c) A private company in which such director is a director or member;(d) Any director or manager of such a private company

(a) A partner or relative of director or manager;(b) A firm in which such director or manager, or relative of either is partner;

(b) No waiver, for the recovery of such amount was done(c) Central Government permission was obtained for the waiver, if anyMember of companies of which one person may be appointed managing directorSection 316 1956 ActCheck whether:

(i) Appointment of a director of the company to a place of profit irrespective of remuneration and of the following persons [under (a) to (d)] to a place of profit carrying a remuneration of Rs. 10,000 per month in the company or its subsidiary is made only with the consent of the company by special resolution:

(ii) In case of appointment of following persons to a place of profit carrying monthly a remuneration of Rs. 50,000/- per month in the company is made only with the prior consent of the Company by special resolution and the approval of the Central Government:

(c) A private company of which a director or manager or relative of either is a director or member

(iii) special resolution was duly passed at the general meeting of the company held for the first time after the holding of such office or place of profit

(iv) if appointment was not approved the concerned person vacated his office immediately

(v) Also check if any person is continuing in office without obtaining the necessary approval / consent

(a) The remuneration received or the monetary equivalent of any perquisite of advantage enjoyed by him were refunded to the company;

(i) the company employed any person as managing director, if he was either the managing director or the manager of any other company (including a private company which is not a subsidiary of a public company)

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(iii) Specific notice of the appointment and resolution were given

Managing director not to be appointed for more than five years at a timeSection 317 1956 Act

Compensation for loss of office of managing or whole-time director or manager:Section 202 2013 ActCheck whether:


(a) from such company; or(b) from transferee of such undertaking or property or from any other personPayment to director for loss of office, etc., in connection with transfer of sharesSection 320 1956 ActCheck whether:

(a) from such company; or

(ii) If so, a unanimous resolution (for such appointment) was duly passed at a meeting of the board with consent of all the directors present at the meeting

(iv) Central Govt. approval obtained, when a person was appointed managing director of more than 2 companies

A managing director cannot be appointed or employed for a term exceeding five years at a time.

However, this section does not prohibit the reappointment, re-employment or extension of the term of office, of any person by further periods not exceeding five years on each occasion

any payment has been made by way of compensation for loss of office, or as consideration for retirement from office, or in connection with such loss or retirement to any other director in contravention of the Act.

Note: No such payment shall be made to the director in the event of thecommencement of the winding up of the company, whether before or at any time within twelve months after, the date on which he ceased to hold office, if the assets of the company on the winding up, after deducting the expenses thereof, are not sufficient to repay to the shareholders the share capital, including the premiums, if any, contributed by them.

Payment to director, etc., for loss of office, etc., in connection with transfer of undertaking or property

director of a company has received any payment, in connection with the transfer of whole or any part of any undertaking or property of the company,by way of compensation for loss of office, or as consideration for retirement from office, or in connection with such loss or retirement-

Director of a company has received any payment, in connection with the transfer to any persons of all or any of the shares ,by way of compensation for loss of office, or as consideration for retirement from office, or in connection

(b) except otherwise provided,from the transferees of the shares or from any other person

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Note: 'Transfer' resulting from(i) an offer made to the general body of shareholders;

(iv) any other offer which is conditional on acceptance to a given extentProvisions supplementary to sections 318, 319 and 320Section 321 1956 ActCheck whether:(i) any recovery being made in proceedings by virtue of section 319(2) or 320(4)

(b) any valuable consideration is given to any such directorDirectors, etc., with unlimited liability in limited companySection 322 1956 ActCheck whether:

Special resolution of limited company making liability of directors, etc., unlimitedSection 323 1956 ActCheck whether :

Determination of net profitsSection 349 1956 ActCheck whether net profits for managerial remuneration purposes:(i) was computed in accordance with the provisions of this section(ii) credits and deductions specified in this section had been duly made Ascertainment of depreciation

(ii) an offer made by or on behalf of some other body corporate with a view to the company becoming a subsidiary of such body corporate or a subsidiary of its holding company;

(iii) an offer made by or on behalf of an individual with a view to his obtaining the right to exercise, or control the exercise of, not less than one-third of the total voting power at any general meeting of the company; or

(ii) any excess or the money value of the consideration has been made, that can be deemed to have been paid by way of compensation for loss of office or as consideration for retirement from the office, or in connection with such loss or retirement in connection with transfer as mentioned in section 319/320:

(a) the price to be paid, to a director of the company whose office is to be abolished or who is to retire from office, for any shares in the company held by him is in excess of the price which could at the time have been obtained by other holders of the like shares; or

(i) Memorandum contains any clause that makes the liability of directors/any director/manager unlimited

(ii) notice in writing has been given by promoter of the company, its directors or manager, if any, and its officers to the person who proposes to be appointed as such.

special resolution has been passed; as authorised by article for altering memorandum to render unlimited liability of its directors or any director or manager

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Inter corporate loans and investments.

1956 Act

Check that:(i) Company has not directly or indirectly:

(d) Prior approval of the public financial institution is taken if required(e) Compliance with provisions of Section 58A

(ii) For Investments: [also refer Sec 49(1)], check that:(a) the investments of the company are being held in its own name

Certain companies to have secretaries

Section 383A 1956 Act

Check whether the depreciation to be deducted while calculating net profit u/s 349 shall be the amount of depreciation on the assets as shown by the books of the company at the end of the financial year at the rate specified in Schedule XIV:

Section 372A [Note: Clause 32 of the Listing Agreement requires disclosure of the related parties and associates in accordance with AS-18 and investments made by loanee in the shares of the Company]

a. Made any loan to any other body corporate;b. Given any guarantee or provided security, in connection with a loan made by any other person to, or to any other person by, any body corporate; and

c. Acquired, by way of subscription, purchase or otherwise the securities of any other body corporate

Exceeding 60% of its paid-up share capital and free reserves or 100% of its free reserves, whichever is more

Note: Where the aggregate of the loans and investments so far made, the amounts for which guarantee or security so far provided to or in all other bodies corporate, along with the investment, loan or guarantee or security proposed to be made or given by the Board, exceeds the aforesaid limits, no investment or loan shall be made or guarantee shall be given or provided unless previously authorised by a special resolution passed in a general meeting;

(a) Notice of the resolution to be moved at the meeting of the board had been given to each director along with the notice of meeting

(b) Resolution passed by the consent of all the directors present, except those who were not entitled to vote

(c) Notice of general meeting is given with the proposed special resolution and explanatory statement

(f) Prescribed register has been maintained at the registered office and particulars entered in the register within 7 days

(g) Check that the rate of interest charged for a loan to a body corporate is not made at a rate of interest lower than the prevailing bank rate [Rate prescribed under Section 49 of the Reserve Bank of India Act, 1934)

(b) that a register of investments is maintained also giving particulars of investment under lien

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Check that:

Firm or body corporate not to be appointed managerSection 384 1956 ActCheck that:A firm, body corporate or association has not been appointed as a managerCertain persons not to be appointed managersSection 385 1956 ActCheck whether:

Number of companies of which a person may be appointed manager.Section 386 1956 ActCheck whether:

(ii) If yes, number of companies should not exceed one

Remuneration of a managerSection 387 1956 ActCheck whether:

(ii) Net profit computed in manner laid down in 349 & 350

Contracts by agents of company is undisclosed principalSection 416 1956 ActCheck whether:

(i) Where the Company has paid-up share capital of Rs.5 crores or more, it has appointed a member of the Institute of Company Secretaries of India as whole-time company secretary

(ii) Where the paid up capital is less than Rs.5 crores but more than Rs.2 crore, check that a certificate from the practicing company secretary in the prescribed form is obtained and filed with ROC within the prescribed period by attaching the same with the Director’s Report u/s217 (MCA notification: Companies (Appointment and Qualifications of Secretary) Amendment Rules, 2009-These rules have come into force from the 15th day of March, 2009)

any person disqualified to be appointed as manager under sub-section 1[a]-[c] has been appointed as manager

(i) a person appointed as manager or managing director is a manager or managing director in any other company

(iii) such appointment or employment is made or approved by a resolution passed at the meeting of the Board.

(i) manager has received remuneration subject to section 198 either by way of a monthly payment or by way of specified percentage

(iii) Approval of Central Government taken in case remuneration exceeds aggregate 5% of the net profit

Note: The relevant provisions as applicable to with regard to remuneration payable to Managing Director are equally applicable

(i) company is an undisclosed principal in a contract entered into by manager or other agent.

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Employees' securities to be deposited in Post Office Savings Bank or Scheduled Bank


Provisions applicable to provident fund of employees

Section 418-420 1956 Act


Documents of any alterations made to be delivered to the Registrar

Section 593 1956 ActWhere any alteration is made in

Check whether, ROC is informed

(ii) memorandum has been submitted by the person to company & copies have been sent out to directors

(i) money or security deposited with the company by its employees in pursuance of contracts of service was deposited within 15 days in a post office saving bank account or in a special account with the State bank of India or any other scheduled bank

(ii) no portion of such money or securities was utilised by the company except for the purposes agreed into the contracts of service

(i) Check account with the State Bank of India or any other scheduled bank for deposit within 15 days

(ii) If a trust has been created for this purpose, whether the contributions of the employees and contribution of the company paid to the trustees within 15 days from the date of collection.

Documents etc. to be delivered to the Registrar by companies carrying on business in India

the documents specified were duly certified and filed with ROC within specified time line-30 days

(a) MOA, AOA or the charter(b) the registered or principal office(c) the directors or secretaries (d) the name and the address of any person authorised to accept services or documents on behalf of the foreign company

(e) principal place of business in India

Verify Form 49: Return of alteration in the charter, statute or memorandum and articles of association, address of the registered or principal office and directors and secretary of a foreign company

Verify Form 52: Notice of (A) alteration in names and addresses of persons resident in India authorized to accept service on behalf of a foreign company (B) alteration in the address of principal place of business in India of a foreign company (C) list of places of business established by a foreign company (D) cessation to have a place of business in India

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Accounts of foreign companies


Office where documents to be delivered


(i) Balance Sheet and Profit and Loss account in such form, containing such particulars and including or having annexed or attached thereto such documents as required under the Act for any Company

(ii) a copy of Balance Sheet and Profit and Loss Account and other documents required by the provisions of the act to be annexed or attached thereto by other companies (being in English or with certified translation in English )

Check whether ROC at New Delhi as well as of the state where place of business is situated is informed: