CMA Inter Company Law & Ethics Lecture Review

Practice vocabulary flashcards covering CMA Inter Company Law and Business Ethics constants, including share capital, meeting protocols, director requirements, and ethical principles.

Share Certificate

A document issued by a company pursuant to a Board resolution that must bear a distinctive number for every share; it is not considered a negotiable instrument.

Unlisted Company (Duplicate Share Certificate)

Duplicate share certificates for an unlisted company must be issued within a period of either $3$, months or $45$ days depending on the specific syllabus regulations cited.

Bonus Shares

Shares issued by capitalising free reserves, the securities premium account, or the capital redemption reserve account.

Securities Premium Account

An account used for writing off preliminary expenses, issuing bonus shares, or the buy-back of shares.

Sweat Equity Shares

Shares issued to employees or directors that are typically locked in for a period of $3$ years ($2$ years in older regulations) from the date of allotment.

Significant Influence

The control of at least $20\%$ of the total share capital of a company.

Form MGT-7

The specific form used by companies to prepare and file their Annual Return under Section $92$ of the Companies Act.

Form INC-11

The form number assigned to the Certificate of Incorporation issued by the Registrar of Companies.

Associate Company

A company in which another company has significant influence, represented by control of at least $20\%$ of total share capital.

Investment Company

A company whose principal business is the acquisition of shares, debentures, or other securities.

Small Shareholder

A shareholder holding shares with a total nominal value of no more than $\text{Rs. 20,000}$.

Memorandum of Association (MOA)

The document defining the objects and scope of activities of a company and its relationship with outsiders.

Articles of Association (AOA)

The document containing the rules and regulations for the internal management and conduct of a company.

Ultra Vires

A legal term meaning "beyond (their) power," referring to acts performed outside the scope of a company's legal authority.

Quorum (Public Company)

The minimum number of members personally present required for a meeting; for a public company with more than $5000$ members, the quorum is $30$ members.

Instrument of Proxy

An authorization document that must be deposited with the company at least $48$ hours before the commencement of a meeting.

Independent Director

A director appointed for a term of up to $5$ years ($3$ years for small shareholders' directors) who cannot hold office for more than $2$ consecutive terms.

Managing Director

A director entrusted with substantial powers of management, who must be at least $21$ years of age.

Woman Director

A mandatory appointment for listed companies and certain public companies, specifically those with a paid-up share capital of at_least $\text{Rs. 500 crore}$ or more.

Key Managerial Personnel (KMP)

Under Section $2(51)$, this includes the Managing Director, Whole-time Director, Company Secretary, and Chief Financial Officer.

Vigil Mechanism

A system required for listed companies to allow directors and employees to report genuine concerns.

Separate Legal Entity

The legal doctrine that treats a company as a distinct person from its members, allowing it to sue and be sued in its own name.

Section 8 Company

A company formed for charitable or social purposes that is prohibited from paying dividends to its members.

Pre-incorporation Contracts

Contracts entered into by promoters before the official incorporation of a company, which are generally not binding on the company.

Doctrine of Indoor Management

A legal principle that protects outsiders when dealing with a company by assuming internal procedures have been followed.

Ethics

A set of moral principles and standards that guide a person's behavior and determine acceptable conduct in business.

Meta-ethics

A branch of ethics that deals specifically with the nature of moral judgment.

Lord Nolan

The individual who set out the Seven Principles of Public Life (integrity, objectivity, accountability, etc.) for the first time in $1995$.

Objectivity

A principle of public life where holders of public office take decisions impartially, fairly, and on merit using the best evidence without bias.

Emotional Intelligence

The ability to understand and manage emotions, comprising self-awareness, self-regulation, empathy, social awareness, and relationship management.

Value Chain

A strategic framework for the analysis of competitive advantage promoted by Michael Porter.

Red Herring Prospectus

A prospectus that does not include complete particulars regarding the price or quantum of the securities being offered.