company management ppt
TRANSCRIPT
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Company Management
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Subjects to be covered
BOARD OF DIRECTORS
MANAGING DIRECTOR
AUDITORS
COMPANY SECRETARY
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Board of Directors
Definition:“any person occupying the position of a director by whatever name called.” u/s 2(13)
Only individuals to be directors u/s 253
Legal position of directors
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Appointment1. Appointment of First directors u/s254
2. Appointment at General Meeting u/s255
3. Appointment by Third Parties4. Appointment by Central government
us/408
5. Appointment by the Board: As an additional director u/s 260 To fill a casual vacancy u/s 262 As an alternate director u/s 313
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RIGHTS:
Attend the meetings
Participate in the management
To receive remuneration
DIRECTORS:
Minimum number of directors
Maximum number of directors
Increase or decrease in number
Number of directorships
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Duties
General duties: Duty of good faith Duty of care Duty not to delegate
Statutory Duties: Not to issue irredeemable
preference shares redeemable after 10 years
Disclose interest Attend Board Meetings Convene General
Meetings Prepare report
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Powers
General powers of board
Exercised only at Board Meetings
Requiring consent of Central Government
Requiring unanimous voting
Restrictions on powers
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Remuneration:
Director: 1% of Net Profits 3% of Net Profits if
no MD
Managing Director: 5% of Net Profits 10% in case of 2 MDs
* Maximum remuneration should not exceed 11% of Net Profit
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End to Directorship
Disqualification Removal Retirement Vacation from office Resignation
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Removal
Removal by shareholders Removal by central government Removal by law board
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Definition: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 the virtue of its memorandum or articles of association , is entrusted with substantial powers of management which would not otherwise be exercisable by him.
MANAGING DIRECTOR OR WHOLETIME DIRECTOR u/s 2(26)
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A managing director may be appointed in any of the following ways :
by agreement with the company; by a resolution passed by the company
in general meeting; by a resolution passed by the Board of
Directors; by memorandum of associations; by articles of association.
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Appointment of managing director or whole-time director: u/s 269, 268 & 317
On and from 5.06.1988, every public company, or a private company which is a subsidiary of a public company, having paid-up share capital of rupees five crores or more, shall have a managing or whole-time director.
No appointment of a person as a managing or whole-time director in a public company or a private company which is a subsidiary of a public company shall be made except with the approval of the Central Government unless such appointment is made in accordance with the conditions specified in Parts 1 & 2 (subject to provision of Part 3) of Schedule 13 & a return in the prescribed form is filled within ninety days from the date of such appointment.
Every application seeking approval to the appointment of a managing or whole-time director or a manager shall be made to the Central Government within a period of ninety days from the date of such appointment.
Company Law Board.
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Appointment Number of companies in which one person may be appointed managing director: u/s 316 A person can be appointed as a managing director or
manager of one or more company in the following cases:
• such appointment or employment is approved by a resolution passed at a meeting of the Board with the consent of all the directors present at the meeting;
• specific notice of a meeting and resolution to be moved thereat regarding the appointment of a managing director of more than one company has been given to all the directors then in India.
• The Central Government may, by order, permit any person to be appointed as a managing director of more than two companies, if the Central Government is satisfied that it is necessary that the companies should, for their proper working, function as a single unit and have a common managing director.
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Powers of managing director or whole-time director:
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.
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Disqualification of a managing director u/s 267
No company shall appoint or employ or continue the appointment of any person as a managing or whole-time director who:
• is an undischarged insolvent, or has at any time been adjudged an insolent;
• suspends or has at any time suspended payment to his creditors, or makes, or has at any time made a composition with them; or
• is or has at any time been convicted by Court of an offence involving moral turpitude.
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Who are auditors
Types of auditors
Qualifications of auditors – (S- 226)
Auditors
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Appointment of auditors
1st Auditor u/s 224(5)
Subsequent auditors u/s 223(1)
Through special resolution
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Who can not be appointed as auditors
A body corporate An officer or employee of the company A person who is the partner of the
company A person who is in debt to the copmay
exceeding to Rs. 1000/- or who has given guarantee or provided any security
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Removal of auditors
By passing a resolution in General meeting
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Rights of auditors
To call for information & explanation To access books of accounts To attend meetings and to receive notices Inspection of articles other than books of
accounts
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Duties of auditors
To scrutinize Loans & advances Entries Investment Expenses
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Company Secretary
Definition –“Secretary means a company secretary within the meaning of clause (c) of sub-section (1) of section 2 of the Company Secretaries Act, 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.”
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Qualifications
Statutory QualificationsUnder two categories : Companies having a paid-up share capital of
Rs. 2 crores or more For other companies
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Qualifications Contd…
Other qualifications : Sound general education Proficiency in language Wide knowledge Knowledge of company law Knowledge of other laws Knowledge of office organization and methods Knowledge of economics, banking and finance Good personality
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Appointment of company secretary
Compulsory appointment of a company secretary u/s 383A
Engaging Company Secretary in whole-time practice by Companies Act 2000.
What is the procedure of appointment?
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Position of Company Secretary
Recognized as a responsible officer of the company under rule 2(b) of the Company Rules.
Carries out the policy decisions of Board but for routine day-to-day affairs, the secretary has the authority to carry out the work.
Acts as a link between the company and the outside world.
Enjoys a unique position in the management but does not have managerial powers.
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Duties of Secretary
General Duties Statutory Duties Duties under Income-tax Act Under the Indian Stamp Act Under other acts
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Rights of company secretary
Right to control and supervise the working of his department.
Right to sign a document or proceeding. Right to be indemnified by the company
for any loss suffered by him. Right to receive remuneration.
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Dismissal of a company secretary
May be removed from his office by a resolution of Board of Directors.
Can be dismissed without giving him a notice in the following cases – For willful disobedience For misconduct or moral turpitude For negligence For incompetence or permanent disability
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THANK YOU