CS (Company Secretary) Company Law and Corporate Governance Syllabus

Company Law and Corporate Governance syllabus — full chapter and topic list

Expand any chapter to see its topics and sub-topics. This is the whole examinable outline for Company Law and Corporate Governance in CS (Company Secretary), not a summary of it.

1. 1

   Introduction and Incorporation of Companies

   4 topics

   • Concept and Types of Companies
     • Corporate personality and lifting the veil
     • Private, public, OPC and small companies
     • Section 8, producer and government companies
   • Promotion and Incorporation
     • Promoters and pre-incorporation contracts
     • SPICe+ incorporation process
     • Commencement of business
   • Memorandum and Articles of Association
     • Doctrine of ultra vires
     • Doctrine of constructive notice and indoor management
     • Alteration of MOA and AOA
   • Conversion and Registered Office
     • Conversion of company types
     • Registered office and change provisions
2. 2

   Share Capital and Debentures

   5 topics

   • Kinds of Share Capital
     • Equity and preference shares
     • Alteration and reduction of capital
   • Issue and Allotment of Securities
     • Prospectus, private placement and rights issue
     • Bonus issue and sweat equity
     • ESOP and buy-back of securities
   • Transfer and Transmission
     • Transfer of shares and debentures
     • Transmission and nomination
   • Debentures and Charges
     • Types of debentures and debenture trustees
     • Creation, modification and satisfaction of charges
   • Dividend Provisions
     • Declaration and payment of dividend
     • Unpaid dividend and IEPF
3. 3

   Management and Administration

   5 topics

   • Directors
     • Appointment, qualification and DIN
     • Removal, resignation and vacation of office
     • Independent and woman directors
   • Board and Committees
     • Powers and duties of the Board
     • Audit, NRC, stakeholders and CSR committees
   • Key Managerial Personnel
     • Role of Company Secretary and MD/WTD
     • Managerial remuneration
   • Meetings of Members
     • AGM and EGM provisions
     • Notice, quorum, proxy and voting
     • Resolutions and postal ballot
   • Registers, Returns and Filings
     • Statutory registers maintenance
     • Annual return and ROC filings
4. 4

   Corporate Governance Framework

   4 topics

   • Concept and Evolution
     • Principles and theories of governance
     • Committees and codes in India and globally
   • Board Effectiveness
     • Board composition and evaluation
     • Board processes and succession planning
   • Listing Obligations and Disclosure Requirements
     • SEBI LODR governance norms
     • Related party transactions disclosure
   • Corporate Social Responsibility
     • CSR applicability and committee
     • CSR policy and spending obligations
5. 5

   Compromises, Arrangements and Winding Up

   3 topics

   • Compromises and Arrangements
     • Scheme of arrangement procedure
     • Mergers and amalgamations
   • Oppression and Mismanagement
     • Class action and remedies
     • NCLT jurisdiction
   • Winding Up
     • Modes of winding up
     • Striking off and dormant companies

Company Law and Corporate Governance flashcards for CS (Company Secretary)

20 of 60 cards from the Company Law and Corporate Governance deck — real questions with worked answers.

1. Under the Companies Act, 2013, how is a "company" defined and what is its key legal characteristic?

   Section 2(20) defines a company as a company incorporated under the 2013 Act or any previous company law. Its key characteristic is separate legal personality (established in Salomon v Salomon), making it a body corporate distinct from its members, with perpetual succession, a common seal (now optional), limited liability and the capacity to sue and be sued in its own name.

2. How are companies classified on the basis of liability?

   (1) Company limited by shares - liability limited to unpaid amount on shares; (2) Company limited by guarantee - liability limited to the amount members guarantee to contribute on winding up; (3) Unlimited company - members have unlimited personal liability for the company's debts.

3. What distinguishes a private company from a public company under the Companies Act, 2013?

   A private company [Sec 2(68)] restricts share transfer, limits members to 200 (excluding employees/ex-employees), prohibits inviting the public to subscribe to securities, and needs a minimum of 2 members and 2 directors. A public company [Sec 2(71)] has no such restrictions, needs a minimum of 7 members and 3 directors, and may invite public subscription.

4. What is a One Person Company (OPC) and its key restrictions?

   An OPC [Sec 2(62)] is a private company with only one member. It must nominate a nominee who becomes member on the subscriber's death/incapacity. It cannot carry on NBFC investment activities and (earlier) had conversion thresholds; only a natural person who is an Indian citizen can form it.

5. Differentiate a holding company, subsidiary company and associate company.

   A holding company controls another (its subsidiary) via board composition control or >50% of total voting power [Sec 2(46),2(87)]. A subsidiary is the controlled company. An associate company [Sec 2(6)] is one in which another has significant influence - 20% or more of total voting power, or business decisions under an agreement - but is not a subsidiary.

6. What is a Government company and a foreign company under the Act?

   A Government company [Sec 2(45)] is one in which not less than 51% of paid-up share capital is held by the Central Government, State Government(s), or partly by both. A foreign company [Sec 2(42)] is one incorporated outside India which has a place of business in India (physical or electronic) and conducts business activity in India.

7. What is the doctrine of lifting / piercing the corporate veil?

   It is the disregarding of a company's separate legal personality to hold members/directors personally liable. Courts lift the veil in cases of fraud, improper conduct, evasion of tax or legal obligations, sham/facade companies, enemy character in wartime, or where a statute so requires.

8. What are the main stages in the formation of a company?

   (1) Promotion - conceiving the idea and taking preliminary steps; (2) Incorporation - registration with the Registrar of Companies and obtaining the Certificate of Incorporation; (3) Capital subscription (for public companies); (4) Commencement of business - filing the declaration before commencing business/exercising borrowing powers.

9. Who is a "promoter" under the Companies Act, 2013 and what is the nature of the promoter's relationship with the company?

   A promoter [Sec 2(69)] is a person named as such in the prospectus or annual return, or who controls the company's affairs directly/indirectly, or on whose advice/directions the Board acts (excluding professionals acting in their professional capacity). A promoter stands in a fiduciary relationship with the company and must disclose secret profits and any personal interest.

10. What is the effect of the Certificate of Incorporation under the Companies Act, 2013?

    It is conclusive evidence that the company is duly registered and a body corporate from the date stated. From that date the company comes into existence with a Corporate Identity Number (CIN). (Note: under the 2013 Act the certificate is no longer conclusive as to fulfilment of all formalities - the Registrar may take action and strike off if registration was obtained by fraud.)

11. What are pre-incorporation (preliminary) contracts and are they binding on the company?

    Pre-incorporation contracts are made by promoters before the company exists. The company is not bound by them since it had no legal existence and cannot ratify them. However, under the Specific Relief Act, 1963, the company can adopt/enforce such contracts if the contract was for the company's purposes and the company accepts and communicates acceptance after incorporation.

12. What is the Memorandum of Association (MoA) and what are its clauses?

    The MoA is the charter defining the company's constitution and scope of activities. Its clauses (Sec 4) are: Name clause, Registered Office (situation) clause, Objects clause, Liability clause, Capital (share capital) clause, and Subscription/Association clause; an OPC additionally has a Nominee clause.

13. What are the Articles of Association (AoA) and how do they differ from the Memorandum?

    The AoA [Sec 5] contain the regulations for the company's internal management and governance. The MoA defines the company's powers and relation with the outside world (its scope), while the AoA are subordinate to the MoA and govern internal affairs; the MoA cannot be easily altered whereas Articles can be altered by special resolution.

14. What is the doctrine of ultra vires in company law?

    Any act of the company beyond the scope of its objects clause in the MoA is ultra vires, void ab initio, and cannot be ratified even by unanimous consent of all members. It protects shareholders and creditors (laid down in Ashbury Railway Carriage v Riche). Acts within the company's powers but beyond directors' authority can, however, be ratified.

15. Explain the doctrine of constructive notice and the doctrine of indoor management.

    Constructive notice: outsiders dealing with a company are presumed to know the contents of its public documents (MoA/AoA). Indoor management (Turquand's rule): outsiders acting in good faith may assume the internal procedures of the company have been duly complied with and are not bound to enquire into internal irregularities - an exception protecting third parties.

16. What are the exceptions to the doctrine of indoor management?

    (1) Knowledge of the irregularity by the outsider; (2) Negligence/suspicion of irregularity that should prompt enquiry; (3) Forgery (a forged document is void and the rule offers no protection); (4) Acts outside the apparent authority of the officer; (5) No knowledge of the articles at all (cannot claim benefit).

17. What is an entrenchment provision in the Articles of Association?

    Under Section 5(3), articles may contain entrenchment provisions requiring more restrictive conditions/procedures (e.g., a higher majority than special resolution) for amending specified provisions. Entrenchment can be introduced on formation, or later by all members' agreement (private company) or special resolution (public company), and must be notified to the Registrar.

18. What is the procedure to alter the name clause / registered office from one state to another?

    Change of name requires a special resolution and Central Government (RoC) approval, with a fresh Certificate of Incorporation. Shifting the registered office from one state to another requires a special resolution and confirmation by the Central Government (Regional Director), since it involves alteration of the MoA's registered office clause.

19. What are the rules for the registered office of a company under Section 12?

    A company must have a registered office capable of receiving communications within 30 days of incorporation (verification in INC-22). The company's name, registered office address, CIN, telephone, email and website must be displayed/printed on business letters, billheads and official publications. Any change must be notified to the Registrar within 30 days.

20. What is the procedure for conversion of a private company into a public company?

    Pass a special resolution to alter the Articles (removing the three private-company restrictions), increase members/directors to public-company minimums (7 members, 3 directors), alter the name (delete "Private"), and file the requisite forms with the Registrar to obtain a fresh Certificate of Incorporation.

See more Company Law and Corporate Governance flashcards →

Planning Company Law and Corporate Governance for CS (Company Secretary)

Company Law and Corporate Governance (CS (Company Secretary)) FAQ