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Section 2 - Acts - PRELIMINARY - Companies Act, 2013 - Section 2 - 2. In this Act, unless the context otherwise requires,- (1) "abridged prospectus" means a memorandum containing such salient features of a prospectus as may be specified by the Securities and Exchange Board by making regulations in this behalf; (2) "accounting standards" means the standards of accounting or any addendum thereto for companies or class of companies referred to in section 133; (3) "alter&quo .....

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her company has a significant influence, but which is not a subsidiary company of the company having such influence and includes a joint venture company. 4[Explanation.-For the purpose of this clause,- (a) the expression "significant influence" means control of at least twenty per cent. of total voting power, or control of or participation in business decisions under an agreement; (b) the expression "joint venture" means a joint arrangement whereby the parties that have joint .....

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as defined in clause (c) of section 5 of the Banking Regulation Act, 1949 (10 of 1949); (10) "Board of Directors" or "Board", in relation to a company, means the collective body of the directors of the company; (11) "body corporate" or "corporation" includes a company incorporated outside India, but does not include- (i) a co-operative society registered under any law relating to co-operative societies; and (ii) any other body corporate (not being a compa .....

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; (ii) all sales and purchases of goods and services by the company; (iii) the assets and liabilities of the company; and (iv) the items of cost as may be prescribed under section 148 in the case of a company which belongs to any class of companies specified under that section; (14) "branch office", in relation to a company, means any establishment described as such by the company; (15) "called-up capital" means such part of the capital, which has been called for payment; (16 .....

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ny, who has been designated as such by it; (19) "Chief Financial Officer" means a person appointed as the Chief Financial Officer of a company; (20) "company" means a company incorporated under this Act or under any previous company law; (21) "company limited by guarantee" means a company having the liability of its members limited by the memorandum to such amount as the members may respectively undertake to contribute to the assets of the company in the event of it .....

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s defined in clause (c) of sub-section (1) of section 2 of the Company Secretaries Act, 1980 (56 of 1980) who is appointed by a company to perform the functions of a company secretary under this Act; (25) "company secretary in practice" means a company secretary who is deemed to be in practice under sub-section (2) of section 2 of the Company Secretaries Act, 1980 (56 of 1980); (26) "contributory" means a person liable to contribute towards the assets of the company in the ev .....

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ert, directly or indirectly, including by virtue of their shareholding or management rights or shareholders agreements or voting agreements or in any other manner; 5[(28) "Cost Accountant" means a cost accountant as defined in clause (b) of sub-section (1) of section 2 of the Cost and Works Accountants Act, 1959 (23 of 1959) and who holds a valid certificate of practice under sub-section (1) of section 6 of that Act;] (29) "court" means- (i) the High Court having jurisdiction .....

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whose registered office is situate in the district; (iii) the Court of Session having jurisdiction to try any offence under this Act or under any previous company law; (iv) the Special Court established under section 435; (v) any Metropolitan Magistrate or a Judicial Magistrate of the First Class having jurisdiction to try any offence under this Act or under any previous company law; (30) "debenture" includes debenture stock, bonds or any other instrument of a company evidencing a deb .....

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include such categories of amount as may be prescribed in consultation with the Reserve Bank of India; (32) "depository" means a depository as defined in clause (e) of sub-section (1) of section 2 of the Depositories Act, 1996 (22 of 1996); (33) "derivative" means the derivative as defined in clause (ac) of section 2 of the Securities Contracts (Regulation) Act, 1956 (42 of 1956); (34) "director" means a director appointed to the Board of a company; (35) "divid .....

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ich gives such directors, officers or employees, the benefit or right to purchase, or to subscribe for, the shares of the company at a future date at a pre-determined price; (38) "expert" includes an engineer, a valuer, a chartered accountant, a company secretary, a cost accountant and any other person who has the power or authority to issue a certificate in pursuance of any law for the time being in force; (39) "financial institution" includes a scheduled bank, and any other .....

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ny explanatory note annexed to, or forming part of, any document referred to in sub-clause (i) to sub-clause (iv): Provided that the financial statement, with respect to One Person Company, small company and dormant company, may not include the cash flow statement; (41) "financial year", in relation to any company or body corporate, means the period ending on the 31st day of March every year, and where it has been incorporated on or after the 1st day of January of a year, the period en .....

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ner as may be prescribed, allow any period as its financial year, whether or not that period is a year: Provided further that any application pending before the Tribunal as on the date of commencement of the Companies (Amendment) Act, 2019, shall be disposed of by the Tribunal in accordance with the provisions applicable to it before such commencement.] 26[Provided also that] a company or body corporate, existing on the commencement of this Act, shall, within a period of tw .....

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vailable for distribution as dividend: Provided that- (i) any amount representing unrealised gains, notional gains or revaluation of assets, whether shown as a reserve or otherwise, or (ii) any change in carrying amount of an asset or of a liability recognized in equity, including surplus in profit and loss account on measurement of the asset or the liability at fair value, shall not be treated as free reserves; (44) "Global Depository Receipt" means any instrument in the form of a dep .....

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such a Government company; (46) "holding company", in relation to one or more other companies, means a company of which such companies are subsidiary companies; 8[Explanation.-For the purposes of this clause, the expression "company" includes any body corporate;] (47) "independent director" means an independent director referred to in sub-section (5) of section 149; (48) "Indian Depository Receipt" means any instrument in the form of a depository receipt .....

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10[***] 11[(v) such other officer, not more than one level below the directors who is in whole-time employment, designated as key managerial personnel by the Board; and (vi) such other officer as may be prescribed;] (52) "listed company" means a company which has any of its securities listed on any recognised stock exchange; (53) "manager" means an individual who, subject to the superintendence, control and direction of the Board of Directors, has the management of the whole, .....

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ncludes a director occupying the position of managing director, by whatever name called. Explanation.-For the purposes of this clause, 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 a .....

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i) every person holding shares of the company and whose name is entered as a beneficial owner in the records of a depository; (56) "memorandum" means the memorandum of association of a company as originally framed or as altered from time to time in pursuance of any previous company law or of this Act; (57) "net worth" means the aggregate value of the paid-up share capital and all reserves created out of the profits 12[, securities premium account and debit or credit balance o .....

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irector, manager or key managerial personnel 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; (60) "officer who is in default", for the purpose of any provision in this Act which enacts that an officer of the company who is in default shall be liable to any penalty or punishment by way of imprisonment, fine or otherwise, means any of the following officers of a company, namely:- (i) .....

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accounts or records, authorises, actively participates in, knowingly permits, or knowingly fails to take active steps to prevent, any default; (v) any person in accordance with whose advice, directions or instructions the Board of Directors of the company is accustomed to act, other than a person who gives advice to the Board in a professional capacity; (vi) every director, in respect of a contravention of any of the provisions of this Act, who is aware of such contravention by virtue of the rec .....

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company which has only one person as a member; (63) "ordinary or special resolution" means an ordinary resolution, or as the case may be, special resolution referred to in section 114; (64) "paid-up share capital" or "share capital paid-up" means such aggregate amount of money credited as paid-up as is equivalent to the amount received as paid-up in respect of shares issued and also includes any amount credited as paid-up in respect of shares of the company, but do .....

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ct, 1882 (6 of 1882); (iv) the Indian Companies Act, 1913 (7 of 1913); (v) the Registration of Transferred Companies Ordinance, 1942 (Ord. 54 of 1942); (vi) the Companies Act, 1956 (1 of 1956); and (vii) any law corresponding to any of the aforesaid Acts or the Ordinances and in force- (A) 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 (B) in the State .....

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, 1961 (Sikkim Act 8 of 1961); (68) "private company" means a company having a minimum paid-up share capital 1[***] as may be prescribed, and which by its articles,- (i) restricts the right to transfer its shares; (ii) except in case of One Person Company, limits the number of its members to two hundred: Provided that where two or more persons hold one or more shares in a company jointly, they shall, for the purposes of this clause, be treated as a single member: Provided further that- .....

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the company in the annual return referred to in section 92; or (b) who has control over the affairs of the company, directly or indirectly whether as a shareholder, director or otherwise; or (c) in accordance with whose advice, directions or instructions the Board of Directors of the company is accustomed to act: Provided that nothing in sub-clause (c) shall apply to a person who is acting merely in a professional capacity; (70) "prospectus" means any document described or issued as a .....

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ny, not being a private company, shall be deemed to be public company for the purposes of this Act even where such subsidiary company continues to be a private company in its articles ; (72) "public financial institution" means- (i) the Life Insurance Corporation of India, established under section 3 of the Life Insurance Corporation Act, 1956 (31 of 1956); (ii) the Infrastructure Development Finance Company Limited, referred to in clause (vi) of sub-section (1) of section 4A of the Co .....

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t no institution shall be so notified unless- (A) it has been established or constituted by or under any Central or State Act; 14[other than this Act or the previous company law] or (B) not less than fifty-one per cent of the paid-up share capital is held or controlled by the Central Government or by any State Government or Governments or partly by the Central Government and partly by one or more State Governments; (73) "recognised stock exchange" means a recognised stock exchange as d .....

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", with reference to a company, means- (i) a director or his relative; (ii) a key managerial personnel or his relative; (iii) a firm, in which a director, manager or his relative is a partner; (iv) a private company in which a director or manager 23[or his relative] is a member or director; (v) a public company in which a director or manager is a director 24[and holds] along with his relatives, more than two per cent of its paid-up share capital; (vi) any body corporate whose Board of Direc .....

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sidiary of a holding company to which it is also a subsidiary; or (C) an investing company or the venturer of the company; Explanation.-For the purpose of this clause, the investing company or the venturer of a company means a body corporate whose investment in the company would result in the company becoming an associate company of the body corporate.] (ix) such other person as may be prescribed; (77) "relative", with reference to any person, means any one who is related to another, i .....

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d in clause (e) of section 2 of the Reserve Bank of India Act, 1934 (2 of 1934); (81) "securities" means the securities as defined in clause (h) of section 2 of the Securities Contracts (Regulation) Act, 1956 (42 of 1956); (82) "Securities and Exchange Board" 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); (83) "Serious Fraud Investigation Office" means the office refe .....

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r such higher amount as may be prescribed which shall not be more than 18[one hundred crore rupees]: Provided that nothing in this clause shall apply to- (A) a holding company or a subsidiary company; (B) a company registered under section 8; or (C) a company or body corporate governed by any special Act; (86) "subscribed capital" means such part of the capital which is for the time being subscribed by the members of a company; (87) "subsidiary company" or "subsidiary&qu .....

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on.-For the purposes of this clause,- (a) a company shall be deemed to be a subsidiary company of the holding company even if the control referred to in sub-clause (i) or sub-clause (ii) is of another subsidiary company of the holding company; (b) the composition of a company's Board of Directors shall be deemed to be controlled by another company if that other company by exercise of some power exercisable by it at its discretion can appoint or remove all or a majority of the directors; (c) .....

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power", in relation to any matter, means the total number of votes which may be cast in regard to that matter on a poll at a meeting of a company if all the members thereof or their proxies having a right to vote on that matter are present at the meeting and cast their votes; (90) "Tribunal" means the National Company Law Tribunal constituted under section 408; 20[(91) "turnover" means the gross amount of revenue recognised in the profit and loss account from the sale, s .....

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winding up under this Act or liquidation under the Insolvency and Bankruptcy Code, 2016, as applicable.] (95) words and expressions used and not defined in this Act but defined in the Securities Contracts (Regulation) Act, 1956 (42 of 1956) or the Securities and Exchange Board of India Act, 1992 (15 of 1992) or the Depositories Act, 1996 (22 of 1996) shall have the meanings respectively assigned to them in those Acts. ******************** Notes:- 1. Omitted vide THE COMPANIES (AMENDMENT) Act, 20 .....

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read as, "Explanation.-For the purposes of this clause, "significant influence" means control of at least twenty per cent of total share capital, or of business decisions under an agreement;" 5. Substituted vide The Companies (Amendment) Act, 2017 Dated 03-01-2018 w.e.f. 09 February, 2018 before it was read as, "(28) "cost accountant" means a cost accountant as defined in clause (b) of sub-section (1) of section 2 of the Cost and Works Accountants A .....

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ed director" means a director who is in any way, whether by himself or through any of his relatives or firm, body corporate or other association of individuals in which he or any of his relatives is a partner, director or a member, interested in a contract or arrangement, or proposed contract or arrangement, entered into or to be entered into by or on behalf of a company;" 10. Omitted vide The Companies (Amendment) Act, 2017 Dated 03-01-2018 w.e.f. 09 February, 2018 before i .....

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018 14. Inserted vide The Companies (Amendment) Act, 2017 Dated 03-01-2018 w.e.f. 09 February, 2018 15. Substituted vide The Companies (Amendment) Act, 2017 Dated 03-01-2018 w.e.f. 09 February, 2018 before it was read as, "(viii) any company which is- (A) a holding, subsidiary or an associate company of such company; or (B) a subsidiary of a holding company to which it is also a subsidiary;" 16. Substituted vide The Companies (Amen .....

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