1. Short title, commencement and extent.
1) This Act may be called the Companies Act, 1956.
2) It shall come into force on such date2* as the Central Government may, by notification in the Official Gazette, appoint. 3[(3) It extends to the whole of India: 4 * * * * *] 5[Provided 6* * * that it shall apply to the State of Nagaland subject to such modifications, if any, as the Central Government may, by notification in the Official Gazette, specify.]
2. Definitions.
In this Act, unless the context otherwise requires –
1) "alter" and "alteration" shall include the making of additions and omissions;
2) "articles" means the articles of association of a company as originally framed or as altered from time to time in pursuance of any previous companies law or of this Act, including, so far as they apply to the company, the regulations contained, as the case may be, in Table B in the Schedule annexed to Act No. 19 of 1857 or in Table A in the First Schedule annexed to the Indian Companies Act, 1882, (6 of 1882.) or in Table A in the First
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1. This Act has been extended to Goa, Daman and Diu by Regulation 12 of 1962 (with modifications), s. 3 and Sch.: to Dadra and Nagar Haveli by Regulation 6 of 1963, s. 2 and Sch. I and to Pondicherry by Regulation 7 of 1963, s. 3 and Sch.1.The provisions of this Act shall apply to Goa, Daman and Diu, subject to the exceptions, modifications and adaptations contained in the Schedule to G.S.R. 615, dated the 24th April, 1965 (Gazette of India, Pt. II, Sec. 3(i), p. 670). Amended in its application to Goa, Daman and Diu by Reg. 11 of 1963, s. 9.
2. 1st April, 1956, vide Notification No. S.R.O. 612, dated 8-3- 1956, Gazette of India, Extraordinary, 1956, Pt. II, Sec. 3, p. 473.
3. Subs. by Act 62 of 1956 s. 2 and Sch., for sub-section (3) (w.e.f. 1-11-1956).
4. Proviso omitted by Act 25 of 1968, s. 2 and Sch. (w.e.f. 15-8-1968).
5. Ins. by Act 31 of 1965, s. 2 (w.e.f. 15-10-1965).
6. The word "further" omitted by Act 25 of 1968, s. 2 and Sch. (w.e.f. 15-8-1968). Schedule annexed to the Indian Companies Act, 1913, or in Table A in Schedule I annexed to this Act;
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3) "associate", in relation to a managing agent, means any of the following, and no others –
(a) where the managing agent is an individual; any partner or relative of such individual; any firm in which such individual, partner or relative is a partner; any private company of which such individual or any such partner, relative or firm is the managing agent or secretaries and treasurers or a director or the manager; and any body corporate at any general meeting of which not less than one-third of the total voting power in regard to any matter may be exercised or controlled by any one or more of the following, namely, such individual, partner or partners, relative or relatives, firm or firms; and private company or companies;
(b) where the managing agent is a firm: any member of such firm; any partner or relative of any such member; and any other firm in which any such member, partner or relative is a partner; any private company of which the firm first mentioned, or any such member, partner, relative or other firm is the managing agent, or secretaries and treasurers, or a director, or the manager; and any body corporate at any general meeting of which not less than one-third of the total voting power in regard to any matter may be exercised or controlled by any one or more of the following, namely, the firm first mentioned, any such member or members, partner or partners, relative or relatives, other firm or firms and private company or companies;
(c) where the managing agent is a body corporate:
(i) any subsidiary orholding company of such body corporate; the managing agent or secretaries and treasurers, or a director, the manager or an officer of. the body corporate or of any subsidiary or holding company thereof ; any partner or relative of any such director or manager; any firm in which such director, manager, partner or relative, is a partner;1 * * *
(ii) any other body corporate at any general meeting of which not less than one-third of the total voting power in regard to any matter may be exercised or controlled by any one or more of the following, namely, the body corporate and the companies and other persons specified in paragraph (i) above; and 2[(iii)any subsidiary of the other body corporate referred to in paragraph (ii) above: Provided that where the body corporate is the managing agent of the other body corporate referred to in paragraph (ii) above, a subsidiary of such other body corporate shall not be an associate in relation to the managing agent aforesaid ; and]
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1. The "and" omitted by Act 65 of 1960, s. 2.
2. Ins. by s. 2, ibid.
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(d) where the managing agent is a private company or a body corporate having not more than fifty members: in addition to the persons mentioned in sub clause (c), any member of the private company or body corporate;
Explanation.-If one person is an associate in relation to another within the meaning of this clause, the latter shall also be deemed to be an associate in relation to the former within its meaning;
4) "associate", in relation to any secretaries and treasurers, means any of the following, and no others –
(a) where the secretaries and treasurers are a firm: any member of such firm; any partner or relative of any such member; and any other firm in which any such member, partner or relative is a partner any private company of which the firm first-mentioned, or any such member, partner, relative or other firm is the managing agent, or secretaries and treasurers, or a director, or the manager ; and any body corporate at any general meeting of which not less than one-third of the total voting power in regard to any matter may be exercised or controlled by any one or more of the following, namely, the firm first-mentioned, any such member or members, partner or partners, relative or relatives, other firm or firms, and private company or companies;
(b) where the secretaries and treasurers are a body corporate –
(i) any subsidiary or holding company of such body corporate; the managing agent or secretaries and treasurers, or a director, the manager or an officer of the body corporate or of any subsidiary or holding company thereof ; any partner or relative of any such director or manager; any firm in which such director or manager, partner or relative, is a partner; 1 * * *
(ii) any other body corporate at any general meeting of which not less than one-third of the total voting power in regard to any matter may be exercised or controlled by any one or more of the following, namely, the body corporate and the companies and other persons specified in paragraph (i) above; and 2 [ (iii) any subsidiary of the other body corporate referred to in paragraph (ii) above: Provided that where the body corporate is the secretaries and treasurers of the other body corporate referred to in paragraph (ii) above, a subsidiary of such other body corporate shall not be an associate in relation to the secretaries and treasurers aforesaid; and]
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1. The word "and" omitted by Act 65 of 1960, s. 2.
2. Ins. by s. 2, ibid.
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(c) where the secretaries and treasurers are a private company or a body corporate having not more than fifty members: in addition to the persons mentioned in sub-clause (b), any member of the private company or body corporate;
Explanation.-If one person is an associate in relation to another within the meaning of this clause, the latter shall also be deemed to be an associate in relation to the former within its meaning;
5) "banking company" has the same meaning as in the Banking Companies Act, 1949 (10 of 1949);
6) "Board of directors" or "Board", in relation to a company, means the Board of directors of the company;
7) "body corporate" or "corporation” includes a company incorporated outside India but 1[does not include –
(a) a corporation sole;
(b) a co-operative society registered under any law relating to co-operative societies; and
(c) any other body corporate (not being a company as defined in this Act) which the Central Government may, by notification in the Official Gazette, specify in this behalf;
8) "book and paper " and " book or paper " include accounts, deeds , 2 [vouchers,] writings, and documents;
3[(9) "branch office" in relation to a company means –
(a) any establishment described as a branch by the company ; or
(b) any establishment carrying on either the same or substantially the same activity as that carried on by the head office of the company ; or
(c) any establishment engaged in any production, processing or manufacture, but does not include any establishment specified in any order made by the Central Government under section 8;]
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1. Subs. by Act 65 of 1960, s. 2, for "does not include a corporation sole".
2. Ins. by Act 31 of 1965, s. 3 (w.e.f. 15-10-1965),
3. Subs. by Act 65 of 1960, s. 2, for cl. (9),
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10) "company" means a company as defined in section 3;
1[(10A) "Company Law Board" means the Board of Company Law Administration constituted under section 10E;]
2[(11) "the Court" means –
(a) with respect to any matter relating to a company other than any offence against this Act), the Court having jurisdiction under this Act with respect to that matter relating to that company, as provided in section 10;
(b) with respect to any offence against this Act, the Court of a Magistrate of the First Class or, as the case may be, a Presidency Magistrate, having jurisdiction to try such offence;]
12) "debenture" includes debenture stock, bonds and any other securities of a company, whether constituting a charge on the assets of the company or not;
13) "director" includes any person occupying the position of director, by whatever name called;
14) "District Court" means the principal Civil Court of original jurisdiction in a district, but does not include a High Court in the exercise of its ordinary original civil jurisdiction;
15) "document" includes summons, notice, requisition, order, other legal process, and registers, whether issued, sent or kept in pursuance of this or any other Act or otherwise;
16) "existing company" means an existing company as defined in section 3;
17) "financial year" means, in relation to any body corporate, the period in respect of which any profit and loss account of the body corporate laid before it in annual general meeting is made up, whether that period is a year or not:
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1. Ins. by Act 53 of 1963, s. 2 (w.e.f. 1-1-1964).
2. Subs. by Act 65 of 1960, s. 2, for cl. (11).
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Provided that, in relation to an insurance company, "financial year" shall mean the calendar year referred to in sub-section (1) of section 11 of the Insurance Act, 1938 (4 of 1938);
18) "Government company" means a Government company within the meaning of section 617;
19) "holding company" means a holding company within the meaning of section 4;
21) "insurance company" means a company which carries on the business of insurance either solely or in conjunction with any other business or businesses;
22) "issued generally" means, in relation to a prospectus, issued to persons irrespective of their being existing members or debenture holders of the body corporate to which the prospectus relates;
23) "limited company" means a company limited by shares or by guarantee:
24) "manager" means an individual (not being the managing agent) who, subject to the superintendence, control and direction of the Board of directors, has the management of the whole, or substantially the whole, of the affairs of a company, and includes a director or any other person occupying the position of a manager, by whatever name called, and whether under a contract of service or not;
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1. Omitted by Act 30 of 1984, s.52 (w.e.f. 1.8.1984).
2. Cl. (20) omitted by Act 62 of 1956, s. 2 and Sch. (w.e.f. 1-11-1956).
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25) "managing agent" means any individual, firm or body entitled, subject to the provisions of this Act, to the management of the whole, or substantially the whole, of the affairs of a company by virtue of an agreement with the company, or by virtue of its memorandum or articles of association, and includes any individual, firm or body corporate occupying the position of a managing agent, by whatever name called.
1[Explanation I.-For the purposes of this Act, references to "managing agent" shall be construed as references to any individual, firm, or body corporate who, or which, was, at any time before the 3rd day of April, 1970, the managing agent of any company.
Explanation II.-For the removal of doubts, it is hereby declared that notwithstanding anything contained in section 6 of the Companies (Amendment) Act, 1969, (17 of 1969.) this clause shall remain, and shall be deemed always to have remained, in force;]
26) "managing director" means a director who, by virtue of an agreement with the company or of a resolution passed by the company in general meeting or by its Board of directors or, by virtue of its memorandum or articles of association, is entrusted with 2[substantial powers of management] which would not otherwise be exercisable by him, and includes a director occupying the position of a managing director, by whatever name called:
3[Provided that the power to do administrative acts of a routine nature when so authorised by the Board such as the power to affix the common seal of the company to any document or to draw and endorse any cheque on the account of the company in any bank or to draw and endorse any negotiable instrument or to sign any certificate of share or to direct registration of transfer of any share, shall not be deemed to be included within substantial powers of management:
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1. Ins. by Act 41 of 1974, s. 2 (w.e.f. 1-2-1975).
2. Subs. by Act 65 of 1960, s. 2, for "any powers of management".
3. Ins. by s. 2, ibid.
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Provided further that a managing director of a company shall exercise his powers subject to the superintendence, control and direction of its Board of directors;]
27) "member", in relation to a company, does not include a bearer of a share-warrant of the company issued in pursuance of section 114;
28) "memorandum" means the memorandum of association of a company as originally framed or as altered from time to time in pursuance of any previous companies law or of this Act;
29) "modify" and "modification" shall include the making of additions and omissions;
1[(30) "officer" includes any director, managing agent, secretaries and treasurers, manager or secretary, 2[or any person in accordance with whose directions or instructions the Board of directors or any one or more of the directors is or are accustomed to act,] and also includes –
(a) where the managing agent, 3[or the secretaries and treasures] is or are a firm, any partner in the firm;
(b) where the managing agent or the secretaries and treasurers is or are a body corporate, any director or manager of the body corporate; but save in sections, 477, 478, 539, 543, 545, 621, 625 and 633 does not include an auditor;]
31) "officer who is in default", in relation to any provision referred to in section 5, has the meaning specified in that section;
32) "paid-up capital" or "capital paid up" includes capital credited as paid up;
33) "prescribed" means, as respects the provisions of this Act relating to the winding up of companies except sub-section (5) of section 503, 5[sub-section (3) of section 550, section 552 and sub-section (3) of section 555], prescribed by rules made by the Supreme Court in consultation with High Courts, and as respects the other provisions of this Act including sub-section (5) of section 503,1[sub-section (3) of section 550, section 552 and sub-section (3) of section 555], prescribed by rules made by the Central Government;
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1. Subs. by Act 65 of 1960, s. 2, for cl. (30).
2. Ins. by Act 31 of 1965, s. 3 (w.e.f. 15-10-1965).
3 . Subs. by Act 41of 1974, s. 2, for "the secretaries and treasurers or the secretary" (w.e.f. 1-8-1975).
4. Sub-clause (c) omitted by s. 2, ibid. (w.e.f. 1-8-1975).
5 Subs. by Act 65 of 1960, s. 2, for "sub-section (1) of section 549 and subsection (3) of section 550".
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34) "previous companies law" means any of the laws specified in clause (ii) of sub-section (1) of section 3;
35) "private company" means a private company as defined in section 3;
36) "prospectus" means 2[any document described or issued as a prospectus and includes any] notice, circular, advertisement or other document 3[inviting deposits from the public or] inviting offers from the public for the subscription or purchase of any shares in, or debentures of, a body corporate;
37) "public company" means a public company as defined in section 3;
38) "public holiday" means a public holiday within the meaning of the Negotiable Instruments Act, 1881 (26 of 1881.) :
Provided that no day declared by the Central Government to be a public holiday shall be deemed to be such a holiday, in relation to any meeting, unless the declaration was notified before the issue of the notice convening such meeting;
39) "recognized stock exchange" means, in relation to any provision of this Act in which it occurs, a stock exchange, whether in or outside India, which is notified by the Central Government in the Official Gazette as a recognized stock exchange for the purposes of that provision;
40) "Registrar" means a Registrar, or an Additional, a Joint, a Deputy or an Assistant Registrar, having the duty of registering companies under this Act;
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1. Subs. by Act 65 of 1960. s. 2, for "sub-section (1) of section 549 and subsection (3) of section 550".
2. Subs. by s. 2, ibid., for "any prospectus".
3. Ins. by Act 41 of 1974, s. 2 (w.e.f. 1-2-1975).
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41) "relative" means, with reference to any person, any one who is related to such person in any of the ways specified in section 6, and no others;
42) "Schedule" means a Schedule annexed to this Act;
43) "Scheduled Bank" has the same meaning as in the Reserve Bank of India Act, 1934 (2 of 1934);
44) "secretaries and treasurers" means any firm or body corporate (not being the managing agent) which, subject to the superintendence, control and direction of the Board of directors, has the management of the whole, or substantially the whole, of the affairs of a company; and includes any firm or body corporate occupying the position of secretaries and treasurers, by whatever name called, and whether under a contract of service or not.
1[Explanation I.-For the purposes of this Act, references to "secretaries and treasurers" shall be construed as references to any firm or body corporate which was, at any time before the 3rd day of April, 1970, secretaries and treasurers of any company.
Explanation II.-For the removal of doubts, it is hereby declared that notwithstanding anything contained in section 6 of the Companies (Amendment) Act, 1969 (17 of 1969), this clause shall remain, and shall be deemed always to have remained, in force;]
4[(45) "secretary" means a Company Secretary within the meaning of clause (c) of sub-section (1) of section 2 of the Company Secretaries Act, 1980 (56 of 1980), and includes any other individual possessing the prescribed qualifications and appointed to perform the duties which may be performed by a secretary under this Act and any other ministerial or administrative duties;]
5[(45A) "secretary in whole-time practice" means a secretary who shall be deemed to be in practice within the meaning of sub-section (2) of section 2 of the Company Secretaries Act, 1980 (56 of 1980) and who is not in fulltime employment;]
6[(46A) "Securities and Exchange Board of India" means the Securities and Exchange Board of India established under section 3 of the Securities and Exchange Board of India Act, 1992 (15 of 1992)]
46) "share" means share in the share capital of a company, and includes stock except where a distinction between stock and shares is expressed or implied;
47) "subsidiary company" or "subsidiary" means a subsidiary company within the meaning of section 4;
48) "total voting power", in regard to any matter relating to a body corporate, means the total number of votes which may be cast in regard to that matter on a poll at a meeting of such body, if all the members thereof and all other persons, if any, having a right to vote on that matter are present at the meeting, and cast their votes;
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1. Ins. by Act 41 of 1974, s. 2 (w.e.f. 1-2-1975).
2. Subs. by Act 65 of 1960, s. 2, for el. (45).
3. 41 of 1974, s. 2, for certain words (w.e.f. 1-2-1975).
4. Subs. by Act 31 of 1988, s. 2 (w.e.f. --------------).
5. Subs by s.2 ibid (w.e.f. 15.6.1988).
6. Ins. by Act 22 of 1996, s.31 and Sch. (w.e.f. 20.9.1995).
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49) "trading corporation" means a trading corporation within the meaning of entries 43 and 44 in List I in the Seventh Schedule to the Constitution;
50) "variation" shall, include abrogation; and "vary" shall include abrogate. 2[(2A.) Words and expressions used and not defined in this Act but defined in the Depositories Act, 1996 (22 of 1996), shall have the same meanings respectively assigned to them in that Act.]
3. Definitions of "Company", "Existing Company", "Private Company" and "Public Company"
(1) In this Act, unless the context otherwise requires, the expressions "company", "existing company", "private company" and "public company" shall, subject to the provisions of subsection (2), have the meanings specified below –
i) "company" means a company formed and registered under this Act or an existing company as defined in clause (ii);
ii) "existing company" means a company formed and registered under any of the previous companies laws specified below –
(a) Any Act or Acts relating to companies in force before the Indian Companies Act, 1866 (10 of 1866.)and repealed by that Act;
(b) The Indian Companies Act, 1866 (10 of 1866);
(c) The Indian Companies Act, 1882 (6 of 1882);
(d) The Indian Companies Act, 1913 (7 of 1913);
(e) The Registration of Transferred Companies Ordinance, 1942 ( 54 of 1942); and
2[(f) Any law corresponding to any of the Acts or the Ordinance aforesaid and in force –
(1) in the merged territories or in a Part B State (other than the State of Jammu and Kashmir), or any part thereof, before the extension thereto of the Indian Companies Act, 1913 (7 of 1913); or
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1. Cl. (49A) omitted by Act 17 of 1967, s. 4 and Sch. (w.e.f. 1-7-1967).
2. Ins. by Act 22 of 1996, s. 31 and Sch. (w.e.f. 20.9.1995).
3 Subs. by Act 62 of 1956, s. 2 and Sch., for cl. (f) (w.e.f. 1- 11-1956).
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(2) in the State of Jammu and Kashmir, or any part thereof, before the commencement of the Jammu and Kashmir (Extension of Laws) Act, 1956 (62 of 1956). 1[in so far as banking, insurance and financial corporations are concerned, and before the commencement of the Central Laws (Extension to Jammu and Kashmir) Act, 1968 (25 of 1968) in so far as other corporations are concerned];]
iii) "private company" means a company which, by its articles –
(a) restricts the right to transfer its shares, if any;
(b) limits the number of its members to fifty not including –
(i) persons who are in the employment of the company, and
(ii) persons who, having been formerly in the employment of the company, were members of the company while in that employment and have continued to be members after the employment ceased; and
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