CA-Inter Law Summarized Flashcards

A complete set of 550 practice vocabulary flashcards covering the entire CA-Inter Law syllabus based on the summarized teacher notes.

Companies Act, 2013 Enactment Date

The Act received the assent of the Hon’ble President of India on 29th August 2013.

Notification in Official Gazette

The Act was notified in the Official Gazette on 30th August 2013.

Structure of the Companies Act, 2013

The Act consists of $29$ Chapters, $470$ Sections, and $7$ Schedules.

Company (Section 2(20))

An incorporated association which is an artificial person, having a separate legal entity, with perpetual succession, and a common seal (optional).

Extent of the Companies Act, 2013

The Act extends to the whole of India, including Jammu & Kashmir.

Abridged Prospectus (Section 2(1))

A memorandum containing such salient features of a prospectus as may be specified by SEBI by making regulations.

Accounting Standards (Section 2(2))

Standards or any addendum thereto for companies or class of companies referred to under Section 133.

Section 133

Central Government to prescribe Accounting Standards as recommended by ICAI in consultation with NFRA.

Alter or Alteration (Section 2(3))

Includes the making of additions, omissions, and substitutions.

Articles (Section 2(5))

Articles of association of a company as originally framed or as altered from time to time or applied in pursuance of any previous company law or this Act.

Associate Company (Section 2(6))

A company in which another company has a significant influence but which is not a subsidiary and includes a joint venture.

Significant Influence

Control of at least $20\%$ of total voting power, or control of or participation in business decisions under an agreement.

Joint Venture

A joint arrangement whereby the parties that have joint control have rights to the net assets of the arrangement.

Fiduciary

A person who holds a legal or ethical relationship of trust with one or more parties, typically taking care of money or assets for another.

Auditing Standards (Section 2(7))

Standards of auditing or any addendum thereto for companies or class of companies referred to under Section 143(10).

Authorised Capital (Section 2(8))

The maximum amount of share capital of the company as authorised by the memorandum.

Board of Directors (Section 2(10))

The collective body of the directors of the company.

Body Corporate (Section 2(11))

Includes a company incorporated outside India but excludes co-operative societies and any other body corporate notified by CG.

Book and Paper (Section 2(12))

Includes books of accounts, deeds, vouchers, writings, documents, minutes, and registers maintained on paper or in electronic form.

Books of Account (Section 2(13))

Includes records of money received/expended, sales/purchases of goods and services, assets/liabilities, and items of cost under Section 148.

Branch Office (Section 2(14))

Any establishment described as such by the company.

Called-up Capital (Section 2(15))

Such part of the capital which has been called for payment.

Charge (Section 2(16))

An interest or lien created on the property or assets of a company or its undertakings as security, including a mortgage.

Chartered Accountant (Section 2(17))

Defined under the CA Act, 1949, and holds a valid certificate of practice under section 6(1).

Chief Executive Officer (Section 2(18))

An officer of a company designated as such by it.

Chief Financial Officer (Section 2(19))

A person appointed as the Chief Financial Officer of a company.

Company Limited by Guarantee (Section 2(21))

Company where member liability is limited by memorandum to the amount they undertake to contribute to assets in the event of winding up.

Company Limited by Shares (Section 2(22))

Company where member liability is limited by memorandum to the amount, if any, unpaid on the shares held by them.

Contributory (Section 2(26))

A person liable to contribute to the assets of the company in the event of its being wound up.

Control (Section 2(27))

Right to appoint majority of directors or control management/policy decisions, exercisable individually or in concert.

Debenture (Section 2(30))

Includes debenture stock, bonds, or any other instrument evidencing a debt, whether constituting a charge or not.

Director (Section 2(34))

A director appointed to the Board of a company.

Dividend (Section 2(35))

Includes any interim dividend.

Document (Section 2(36))

Includes summons, notice, requisition, order, declaration, form, and register maintained on paper or electronic form.

Employees Stock Option (Section 2(37))

Option given to directors/officers/employees to purchase or subscribe for company shares at a future date at a pre-determined price.

Expert (Section 2(38))

Includes an engineer, a valuer, a CA, a CS, a cost accountant, and any other person with authority to issue a certificate.

Financial Statement (Section 2(40))

Includes balance sheet, profit and loss account, cash flow statement, statement of changes in equity, and explanatory notes.

Small Company Cash Flow Statement Exemption

OPC, small company, dormant company, and private startup company may not include a cash flow statement in their FS.

Financial Year (Section 2(41))

Period ending on 31st March every year; if incorporated on or after 1st January, the period ends on 31st March of the following year.

Free Reserves (Section 2(43))

Reserves available for distribution as dividend as per the latest audited balance sheet, excluding unrealised/notional gains.

Global Depository Receipt (Section 2(44))

Instrument in the form of a depository receipt created by a foreign depository outside India and authorised by an Indian company.

Government Company (Section 2(45))

Company in which not less than $51\%$ of paid-up share capital is held by CG, SG, or both, including their subsidiaries.

Holding Company (Section 2(46))

In relation to one or more other companies, it means a company of which such companies are subsidiary companies.

Issued Capital (Section 2(50))

The capital the company issues from time to time for subscription.

Key Managerial Personnel (Section 2(51))

Includes CEO, MD, manager, CS, WTD, CFO, and other officers not more than one level below directors.

Listed Company (Section 2(52))

A company which has any of its securities listed on any recognised stock exchange.

Rule 2A Listed Company Exclusions

Public companies with unlisted equity but listed non-convertible debt/preference shares on private placement, and certain foreign-listed public companies.

Manager (Section 2(53))

Individual who, subject to Board direction, has management of whole or substantially whole affairs of the company.

Managing Director (Section 2(54))

Director entrusted with substantial powers of management by articles, agreement, or resolution.

Member (Section 2(55))

Includes subscribers to MoA, persons who agree in writing to become members, and beneficial owners in depository records.

Memorandum (Section 2(56))

Memorandum of association of a company as originally framed or altered from time to time.

Net Worth (Section 2(57))

Aggregate value of paid-up share capital plus reserves (from profits), securities premium, and P&L balance, minus losses and deferred expenses.

Officer (Section 2(59))

Includes any director, manager, KMP, or person whose directions the Board is accustomed to act upon.

Officer in Default (Section 2(60))

Officers liable to penalty including WTD, KMP, specific directors, or anyone else charged by the Board with statutory responsibilities.

One Person Company (Section 2(62))

A company which has only one person as a member.

Paid-up Share Capital (Section 2(64))

Aggregate amount of money credited as paid-up in respect of shares issued.

Postal Ballot (Section 2(65))

Voting by post or through any electronic mode.

Prescribed (Section 2(66))

Prescribed by rules made under the Act.

Private Company (Section 2(68))

Restricts share transfer, limits members to $200$, and prohibits public invitations to subscribe for securities.

Promoter (Section 2(69))

Person named in prospectus, identified in annual return, or who has control over affairs or advises the Board.

Public Company (Section 2(71))

Company that is not a private company and has such minimum paid-up capital as prescribed; subsidiaries of public companies are deemed public.

Registrar (Section 2(75))

Includes Registrar, Additional, Joint, Deputy, or Assistant Registrar having the duty of registering companies.

Related Party (Section 2(76))

Includes directors, KMP, their relatives, firms/private companies where they are members/directors, and holding/subsidiary companies.

Relative (Section 2(77))

Includes members of a HUF, husband and wife, and various prescribed relations (father, mother, son, daughter, brother, sister).

Remuneration (Section 2(78))

Money or equivalent given for services rendered, including perquisites under the Income Tax Act.

Share (Section 2(84))

A share in the share capital of a company and includes stock.

Small Company (Section 2(85))

Non-public company with PUSC \le $Rs.\,4\,crores$ and Turnover \le $Rs.\,40\,crores$ per latest amendment.

Small Company Eligibility Exclusions

Holding companies, subsidiaries, Section 8 companies, and companies governed by Special Acts cannot be Small Companies.

Subscribed Capital (Section 2(86))

Part of the capital which is for the time being subscribed by the members.

Subsidiary Company (Section 2(87))

Company in which the holding company controls Board composition or exercises > $1/2$ of total voting power.

Sweat Equity Shares (Section 2(88))

Equity shares issued to directors/employees at a discount or for non-cash consideration for know-how or IPRs.

Total Voting Power (Section 2(89))

Total number of votes which may be cast on a poll at a meeting if all members or their proxies are present.

Tribunal (Section 2(90))

National Company Law Tribunal (NCLT) constituted under Section 408.

Turnover (Section 2(91))

Gross amount of revenue recognised in P&L from sale, supply, or distribution of goods or services rendered.

Unlimited Company (Section 2(92))

A company not having any limit on the liability of its members.

Voting Right (Section 2(93))

Right of a member to vote in any meeting or by means of postal ballot.

INC-03

Consent of nominee while formation of OPC.

INC-11

Certificate of Incorporation issued on registration of company.

INC-20A

Declaration by director that every subscriber has paid the due amount.

INC-32

SPICe+ Form used to incorporate a company.

INC-33

e-Memorandum of Association furnished at incorporation.

INC-34

e-Articles of Association furnished at incorporation.

Mode of Forming Public Company

Requires $7$ or more persons subscribing to a memorandum.

Mode of Forming Private Company

Requires $2$ or more persons subscribing to a memorandum.

Section 3A Status

If member count falls below $7$ (public) or $2$ (private) for > $6\,months$, members are severally liable for company debts.

Nominee for OPC

A natural person, Indian citizen, and resident/otherwise who shall become the member in case of the subscriber's death.

Resident in India for OPC/LLP

A person who has stayed in India for \ge $120\,days$ during the immediately preceding financial year.

OPC Limitation

A natural person cannot be a member or nominee of > $1$ OPC at any point of time.

OPC Activities Prohibition

Cannot carry out Non-Banking Financial Investment activities, including investment in securities.

Ultra Vires Doctrine

Acts beyond the objects stated in the MoA are void and cannot be ratified, as established in the Ashbury Railway case.

Constructive Notice Doctrine

Presumption that every person contracting with a company has read the public documents (MoA/AoA) and understands them.

Indoor Management Doctrine

Protects outsiders by allowing them to assume that internal procedures (e.g., proper meetings/resolutions) were followed.

Royal British Bank v. Turquand

The core case establishing the Doctrine of Indoor Management.

Exceptions to Indoor Management

Actual knowledge of irregularity, negligence, forgery, or acts outside the company's powers (Ultra Vires).

Section 4 MoA Clauses

Name Clause, Registered Office State, Objects Clause, Liability Clause, Capital Clause, and Nominee Clause (for OPC).

Section 8 Company Objects

Promoting commerce, art, science, sports, education, research, social welfare, religion, charity, protection of environment.

Section 8 Dividend Prohibition

Prohibits the payment of any dividend to its members; profits must be applied to objects.

Revocation of Section 8 License

CG may revoke license if company contravenes requirements or acts fraudulently/violative of objects.

Section 8 Amalgamation Limitation

Can only amalgamate with another Section 8 company having similar objects.

Section 10 Effect of Registration

MoA and AoA once registered bind the company and members like a signed covenant.