INTERNAL AUDITOR: SEC.

138

1. Every Listed Company

2. Every Unlisted Company having –
i) Paid up Capital of Rs.50 Crore or more
ii) Turnover of Rs.200 Crore or more
iii) Outstanding Loans or borrowings from Banks/ Financial
Institution exceeding Rs.100 Crore or more
iv) Outstanding deposits exceeding Rs.25 Crore or more
3. Every Private Company having –
i) Turnover of Rs.200 Crore or more
ii) Outstanding Loans or borrowings from Banks/ Financial
Institution exceeding Rs.100 Crore or more

CORPORATE SOCIAL RESPONSIBILITY COMMITTEE: SEC.135

Every Company having –  Committee contains 3 or

1. Net worth of Rs.500 Crore or more more directors → out of
which at least one
2. Turnover of Rs.1000 Crore or more
independent director
3. Net Profit of Rs.5 Crore or more

AUDIT COMMITTEE: SEC.177

1. Every Listed Company

2. All Public Company having –
i) Paid up Capital of Rs.10 Crore Composition:
 Minimum – 3 members
or more
 All are Non-Executive
ii) Turnover of Rs.100 Crore or Director
more  Majority – Independent
iii) Aggregate of outstanding Loans Director (ID)
 Chairman should be ID
or borrowings or debentures or
deposits exceeding Rs.50 Crore or more

WOMEN DIRECTOR: SEC.149 (1)

Women & Independent

1. Every Listed Company
Director
2. All Public Company having –
i) Paid up Capital of Rs.100  Vacancy will be filled
Crore or more within –Next AGM or 3
months from vacant,
ii) Turnover of Rs.300 Crore whichever is later.
or more

1
INDEPENDENT DIRECTOR: SEC.149 (4)

1. Every Listed Public Company must have 1/3 of Independent

Director.
2. Following companies at least have 2 Independent Directors –
Public Company having –
i) Paid up Capital of Rs.10 Crore or more
ii) Turnover of Rs.100 Crore or more
iii) Aggregate of outstanding Loans or borrowings or
debentures or deposits exceeding Rs.50 Crore or more

VIGIL MECHANISM: SEC.177 (9)

1. Every Listed Company

2. Such Other Companies, which –
i) Accepts deposits from Public
ii) Borrowed money from Banks/Financial Institutions exceeding
of Rs.50 Crore or more

NOMINATION AND REMUNERATION COMMITTEE: SEC.178

All Public Company having –

Composition:
1. Paid up Capital of Rs.10 Crore or  3 or more Non-
more Executive Director
2. Turnover of Rs.100 Crore or more  Out of 1/2 should be
an Independent
3. Aggregate of outstanding Loans or
Director
borrowings or debentures or deposits
exceeding Rs.50 Crore or more

Mandatory apply for XBRL Reporting

1. All Public Listed Companies in India Exemption:

and its subsidiaries  Banking Company
 Insurance Company
2. All companies having paid up capital
 Power Sector Company
of Rs.5 Crores or more  NBFC
3. All companies having turnover of
Rs.300 Crore or more

Key Managerial Personnel:  MD / CEO / Manager in their

absence a WTD
SEC.203
 CS (every company must
have whole time CS if paid
Appointment of KMP – Rule 8 up capital is Rs.5 Crore or
1. Every Listed Company more)
 Chief Financial Officer
2
 2. Public Company having paid up Capital of Rs.10 Crore or more
SMALL COMPANY: SEC.2(85) – Amendment on Sep’22

1. Paid up Capital – not exceeding Rs.4 crore (OR) such higher amount
as may be prescribed which shall not exceed Rs.10 crores
2. Turnover as per P&L A/c – does not exceed Rs.40 crores (OR) such
higher amount as may be prescribed which shall not exceed Rs.100
crores

SMALL SHAREHOLDERS DIRECTOR:  Small shareholders mean,

shareholders having nominal
value is not more than
A Listed Company have elected a small Rs.20,000/-
shareholders director, may upon a notice of  He shall not be liable to retire
not less than – by rotation
 Shall not exceed a period of 3
1. 1000 small shareholders, or consecutive years
2. 1/10 of total number of such  Not eligible for re-
shareholders. appointment

SHAREHOLDERS RELATIONSHIP COMMITTEE:

 BOD will form this committee, where a company having more

than 1000 shareholders, Debenture holders and any other
security holders at any time during the financial year.
 It consists of a Chairperson shall be Non-executive Directors and
such other members as may be decided by the board.

POLITICAL CONTRIBUTION: SEC.182

 A company may contribute directly or indirectly to any political

party
 Govt. company and a company which has in existence is less than 3
years not allowed to contribute
 There is no limit on the amount of contribution
 Resolution should be passed at meeting of the BOD’s
 It shall be disclosed the amount in the P & L A/c
 Contravention:
o Company – Fine which may extend 5 times of the amount
o Officer –
 imprisonment which may extend 6 months, and
 fine may extend 5 times of the amount

3
Ceiling Limit of Auditor: 20 companies

 Public Companies
 Private Companies having paid up capital more than Rs.100 Crores
or more (except OPC, Dormant Company & Private companies
having paid up capital less than Rs.100 crores)

Non Applicability of CARO 2016

1. Banking Companies
2. Insurance Companies
3. Company registered under Sec.8 of the Act
4. OPC
5. Small Companies
6. Following types of Private companies: -
i) not holding or subsidiary company of a public company
ii) paid up capital, reserve and surplus not exceed Rs.1 crore
iii) total borrowing not exceeding Rs.1 crore
iv) total revenue not exceeding Rs.10 crores

Companies Act, 2013

The Companies Act, 2013 consisting of 29 Chapters, 470 Sections and 7

Schedules as against 658 Sections under 13 Parts and 15 schedules in the
Companies Act, 1956.

The Companies Act, 2013 is administered by the Central Government

through the Ministry of Corporate Affairs (MCA) and the Offices of
Registrar of Companies, Official Liquidators, Public Trustee, Director of
Inspection, National Company Law Tribunal (NCLT), National Company
Law Appellate Tribunal (NCLAT), etc.

Activities which may be included by companies in their Corporate

Social Responsibility (CSR) Policies: Activities relating to:

1) eradicating extreme hunger and poverty;

2) promotion of education;
3) promoting gender equality and empowering women; old age
homes, day care centers
4) reducing child mortality and improving maternal health;
5) combating human immunodeficiency virus, acquired immune
deficiency syndrome, malaria and other diseases;

4
 6) ensuring environmental sustainability; animal welfare, agro
industry
7) employment enhancing vocational skills; Training
8) Protection of national heritage, art and culture
9) contribution to the Prime Minister’s National Relief Fund or any
other fund set up by the Central Government or the State
Governments for socio-economic development and relief and
funds for the welfare of the Scheduled Castes, the Scheduled
Tribes, other backward classes, minorities and women; and
10) such other matters as may be prescribed.

Functions of CSR Committee:

1) formulate and recommend the CSR Policy to the Board

2) amount of expenditure to be incurred for the CSR activities
3) monitor the CSR Policy from time to time

CSR Expenses:

The Board of every company refers in this Section, shall ensure that
Company spends, in every financial year, at least 2% of the average net
profits of the company made during the three immediately preceding
financial years, in pursuance of its CSR Policy.

Benefits of CSR Programme:

1) It increases the employee engagement

2) It improves the bottom-line financials
3) It supports local and global communities
4) It increases investment opportunities
5) It increases the customer retention and loyalty
6) CSR improves employee branding

Objectives of Competition Act, 2002

1) to prevent practices having adverse effect on competition.

2) to promote and sustain competition in markets.
3) to protect the interests of consumers.
4) to ensure freedom of trade carried on by other participants in
markets in India

Overall Maximum Managerial Remuneration: Sec.197

Directors including MD, WTD &

11% Net Profits
Manager
One MD, WTD & Manager 5% Net Profits

5
 More than one MD, WTD &
10% Net Profits
Manager
1% Net Profits if there is a MD /
Directors who are neither MD nor WTD
WTD 3% Net Profits if there is NO MD /
WTD

Managerial Remuneration in case No Profit or Inadequate Profit:

Limit of yearly
Limit of yearly remuneration
remuneration payable
Where the effective payable shall not exceed (in
capital is:
shall not exceed (in
Rs.) in case of a managerial
Rs.) in case of other
person
director
Negative or less than 5
60 Lakhs 12 Lakhs
Crores
5 crores and above but
84 Lakhs 17 Lakhs
less than 100 Crores
100 Crores and above
120 Lakhs 24 Lakhs
but less than 250 Crores
24 Lakhs plus 0.01%
120 Lakhs plus 0.01% of
of the effective
250 Crores and above the effective capital in
capital in excess of
excess of 250 Crores
250 Crores

Section 450 in The Companies Act, 2013

Punishment where no specific penalty or punishment is provided.
—
If a company or any officer of a company or any other person contravenes
any of the provisions of this Act or the rules made thereunder, or any
condition, limitation or restriction subject to which any approval, sanction,
consent, confirmation, recognition, direction or exemption in relation to
any matter has been accorded, given or granted, and for which no penalty
or punishment is provided elsewhere in this Act, the company and every
officer of the company who is in default or such other person shall be
punishable with fine which may extend to ten thousand rupees, and
where the contravention is continuing one, with a further fine which may
extend to one thousand rupees for every day after the first during which
the contravention continues.

 Fine – may extend to Rs.10,000/-

 The Contravention is Continuing one further fine may extend
Rs.1,000/- for every day.

6
Directorships – Section 165 of Companies Act, 2013

A person appointed as a director will perform all the duties and functions
of a director as per the provisions of the Companies Act, 2013 (“Act”). A
person is appointed as a director for the Board of a company. However,
Section 165 of the Act states the provisions relating to the number of
directorships a person can hold at a given time.

Number of Directorships of a Director

Section 165(1) of the Act states that a person can hold the office of
director simultaneously in 20 companies. The number of 20 companies
includes the office of alternate directorship. A person cannot be a director
in more than 20 companies at a given time. However, the maximum
number of public companies in which a person can be a director
simultaneously is 10. An individual cannot be appointed as a director in
more than 10 public companies at a given time.

For calculating the number of public companies, the directorship in private

companies that are either holding or subsidiary of a public company is
included. However, the directorship in a dormant company is not included
in calculating the limit of directorships of 20 companies.

The purpose of prescribing the number of the office of directorship is that

the person who is appointed as a director can give proper and sufficient
time to a company. The Act prohibits a person from holding the office of a
director in more than 20 companies to provide quality time to the
companies in which he is a director and discharge his functions as a
director in an efficient manner.

Reduction in the Number of Directorships

Section 165(2) of the Act provides a reduction in the number of

directorships held by a person. A company can specify any number less
than 20 in which the directors of their company can act as directors in
other companies. The members of a company can specify a smaller
number of the office of directorship for its directors by passing a special
resolution.

For Ex – ABC is appointed as a director in XYZ company. XYZ company

has passed a special resolution stating that XYZ company’s directors can
hold the office of directorship in 10 companies. Then, ABC can be a
director in only 10 companies simultaneously and not beyond it. Though
the Act provides that a person can hold a director’s office in 20
companies, ABC can be a director in only 10 companies due to the
resolution passed by XYZ reducing the number to 10. If he holds the office
of director in more than 10, it will amount to the contravention of the Act.

7
Directorship Before the Commencement of the Companies Act,
2013

Section 165(3) and 165(4) of the Act is a transitional provision that

provides a time limit to the directors to comply with the provisions of the
Companies Act, 2013. Before the commencement of this Act, the number
of directorships followed by a director was according to the Companies
Act, 1956. The Companies Act, 1956, did not include private companies
and unlimited companies in the number of directorships held by a person.
But the Companies Act, 2013 includes private companies and unlimited
companies under the limit of 20 companies.

A person holding the office of a director in more than 20 companies before

the commencement of this Act shall follow the limits prescribed under this
Act within one year. Any director holding the office of directorship in more
than 20 companies shall choose the 20 companies he wants to continue
as a director within one year from the commencement of this Act.

After choosing to hold the office of a director in 20 companies, he shall

resign from the office of director in the other remaining companies. The
resignation made by a director in the remaining companies shall be
effective immediately on the despatch of his resignation to the respective
companies. A director shall intimate his choice of 20 companies to the
registrar and the companies in which he held the office of directorship
before the commencement of this Act.

Section 165(5) of the Act provides that a person shall not act as a director
in more than 20 companies after dispatching his resignation to the
remaining companies or after one year from the commencement of this
Act, whichever is earlier.

Penalty for Non-compliance of Section 165

Section 165(6) of the Act provides a penalty for a person who holds the
office of a director in contravention of this Act. If a person accepts an
appointment as a director in more than 20 companies, then he will be
liable to a penalty of Rs.2,000 for each day during which the violation
continues subject to a maximum of Rs.2 lakh. This penalty provision
was included in the Act from 21.12.2020 to prevent persons from holding
the office of directors in more than 20 companies.

8
 Repeated Questions:

1. Actuarial Valuation/Report (Section 13)

2. Lock-in specified securities held by Promoters
3. STR (Suspicious Transaction Reports)
4. Objectives of the Competition Act, 2002
5. Difference between Mediation and Conciliation
6. Benefits of Listing
7. Objectives of MOU System
8. Strategy to tackle black money
9. Types of Listing
10. Advantages of the Family Businesses over Non-Family Businesses
11. Disadvantages of the family business over non-family business
12. Activities not considered as CSR Activities
13. Applicability of Insolvency and Bankruptcy Code 2016
14. Persons who are not entitled to initiate insolvency resolution process
15. Differential Pricing
16. Records of Policies and Claims (Section 14)
17. Current Account Transaction (Section 2j)
18. Inquiry by Registrar - Section 206(4)
19. Functions of winding up Committee
20. Duties of Interim Resolution Professionals
21. Auditor not to render certain services (Sec 144)

Repeated Questions:

Actuarial Valuation/Report (Section 13)

At least once a year, every insurer carrying on life insurance business

shall cause an investigation of the life insurance business carried on by
him including a valuation of his liabilities in respect thereto and shall
cause an abstract of the report of such actuary to made in accordance
with the regulations.

The Authority may, having regard to any particular insurer, allow him to
have the investigation made as at a date not later than two years from
the date as at which the previous investigation was made. If the
investigation is made annually by any insurer, the statement need not be
appended every year but shall be appended at least once in every three
years.

Lock-in specified securities held by Promoters

In a public issue, the equity shares and convertible debentures held by

promoters are locked-in for the period stipulated below:

i. minimum promoters’ contribution is locked-in for a period of 3 years

from the date of commencement of commercial production or date
of allotment in the public issue, whichever is later.

9
 ii. promoters’ holding in excess of minimum promoters’ contribution is
locked-in for a period of 1 year. However, excess promoters’
contribution in a further public offer are not subject to lock-in.

STR (Suspicious Transaction Reports)

According to the Prevention of Money laundering Act, 2002 every banking

company require to furnish the details of suspicious transactions whether
or not made in cash. Suspicious transaction means a transaction whether
or not made in cash which, to a person acting in good faith:

i. Gives rise to a reasonable ground of suspicion that it may involve

the proceeds or crime, or
ii. Appears to be made in circumstances of unusual or unjustified
complexity. or
iii. Appears to have no economic rationale or bonafide purpose.

Objectives of the Competition Act, 2002

The Competition Act, 2002 has the following objectives:

i. to prevent practices having adverse effect on competition.

ii. to promote and sustain competition in markets.
iii. to protect the interests of consumers.
iv. to ensure freedom of trade carried on by other participants in
markets in India and for matters connected therewith or incidental
thereto.

The objectives of the Act are achieved through the Competition

Commission of India (CCI) which has been established by the Central
Government with effect from 14th October, 2003.

Difference between Mediation and Conciliation

‘Mediation’ is a way of settling disputes by a third party who helps both

sides to come to an agreement, which each considers acceptable.
Mediation can be ‘evaluative’ or ‘facilitative’. ‘Conciliation’, is a procedure
like mediation but the third party, the conciliator, takes a more
interventionist role in bringing the two parties together and in suggesting
possible solutions to help achieve a settlement.

The main difference is the ‘conciliator’ can make proposals for settlement,
‘formulate’ or ‘reformulate’ the terms of a possible settlement while a
‘mediator’ would not do so but would merely facilitate a settlement
between the parties.

Benefits of Listing

10
The following benefits are available when securities are listed by a
company in the stock exchange:

i. public image of the company is enhanced.

ii. the liquidity of the security is ensured making it easy to buy and sell
the securities in the stock exchange.
iii. tax concessions are made available both to the investors and the
companies.
iv. listing procedure compels company management to disclose
important information to the investors enabling them to make
crucial decisions with regard to holding or disposing of such
securities.
v. Shares of listed companies command better credibility as they could
be offered as security for loans from Banks and FIs.

Objectives of MOU System

The specific objectives of the MoU system are to:

i. Improve the performance of CPSEs though increased management

autonomy.
ii. Remove the haziness in goals and objectives.
iii. Evaluate management performance through objective criteria; and
iv. Provide incentives for better future performance.

Strategy to tackle black money

The Committee has identified following strategy to tackle black money:

i. Preventing generation of black money.

ii. Discouraging use of black money.
iii. Effective detection of black money.
iv. Effective investigation & adjudication.
v. Other steps.

Types of Listing

Listing of securities falls under 5 groups:

i. Initial listing: If the shares or securities are to be listed for the first
time by a company on a stock exchange is called initial listing.

ii. Listing for Public Issue: When a company whose shares are listed
on a stock exchange comes out with a public issue of securities, it
has to list such issue with the stock exchange.

11
 iii. Listing for Rights Issue: When companies whose securities are
listed on the stock exchange issue further securities to existing
share holders on rights basis, it has to list such rights issues on the
concerned stock exchange.

iv. Listing of Bonus Shares: Companies issuing shares as a result of

capitalization of profits through bonus issue shall list such issues
also on the concerned stock exchange.

v. Listing for merger or amalgamation: When new shares are

issued by an amalgamated company to the share holders of the
amalgamating company, such shares are also required to be listed
on the concerned stock exchange.

Advantages of the Family Businesses over Non-Family Businesses

i. Commitment, Passion and Dedication: It is believed that owners

tend to take better care of their businesses as they have greater
personal stakes involved. Family businesses are more appreciative of
their talent.

ii. Agile decision-making abilities: Not having responsibilities

towards any shareholders gives the Indian family businesses greater
flexibility in terms of making decisions faster, improving the speed
with which they launch new initiatives, change operations, evaluate
new business opportunities, etc.

iii. Deep industry insight: Family businesses gain significant

experience and expertise as they typically work in one industry for
longer durations. This gives them the added advantage of
understanding and appreciating the challenges faced in that industry
much better than any non-family businesses.

iv. Mutual trust: Family businesses thrive on mutual trust and believe
in maintaining long-term relationships by providing a conducive,
supportive and trusting work environment.

Disadvantages of the family business over non-family business

i. Staff recruitment: External talent can be reluctant to join the

family businesses as they would not enjoy the same freedom that
the other businesses offer.

ii. Raising funds for growth: Access to capital is required to grow

and evolve. However, it is difficult to raise the required funds for the
family businesses than non-family businesses.

iii. Family conflicts: Conflict among the family members is the major
setback for the family businesses.

12
iv. Ownership vs Management: Separating the ownership from the
management and reaching a consensus on the roles of family
members in the business are two important issues for the family
businesses to address.

Activities not considered as CSR Activities

The Companies (CSR Policy) Rules, 2014 provides for some activities
which are not considered as CSR activities:

i. The CSR projects or programs or activities undertaken outside India.

ii. the CSR projects or programs or activities that benefit only the
employees of the company and their families.

iii. Contribution of any amount directly or indirectly to any political

party under section 182 of the Act.

iv. Expenses incurred by companies for the fulfillment of any

Act/Statute of regulations (such as Labour Laws, Land Acquisition
Act etc.) would not count as CSR expenditure under the Companies
Act.

Applicability of Insolvency and Bankruptcy Code 2016

The provisions of Insolvency and Bankruptcy Code, 2016 applies to the

following, in relation to their insolvency, liquidation, voluntary liquidation
or bankruptcy, as the case may be (Section 2 of Insolvency and
Bankruptcy Code, 2016).
a) Companies incorporated under Companies Act
b) Companies governed under special Act (so far as of Insolvency and
Bankruptcy Code, 2016 is consistent with those special Acts i.e.
provisions of Special Act will prevail over of Insolvency and
Bankruptcy Code, 2016)
c) Limited Liability Partnership (LLP)
d) Other body corporates as may be notified by Central Government
e) Partnership firms and individuals.
f) Personal guarantors to corporate debtors:
g) Partnership firms and proprietorship firms; and
h) Individuals, other than persons referred to in clause (e).

Persons who are not entitled to initiate insolvency resolution

process

The Code states that a corporate debtor (which includes a corporate

applicant in respect of such corporate debtor) shall not be entitled to
make an application to initiate corporate insolvency resolution process
[Section 11 of Insolvency and Bankruptcy Code, 2016] to the person who –

13
 i. is an undischarged insolvent;

ii. is a wilful defaulter of the time of submission of resolution plan,

iii. At the time of submission of plan, has an account, or an account of a

corporate debtor under the management or control of such person
or of whom such person is a promoter, classified as non-performing
asset.

iv. has been convicted for any offence punishable with imprisonment
for two years for offences under 12th Schedule of the Code or 7
years under any law.

v. is disqualified to act as a director under the Companies Act, 2013;

vi. is prohibited by the Securities and Exchange Board of India from

trading in securities or accessing the securities markets;

vii. has been a promoter or in the management or control of a corporate

debtor in which a preferential transaction, undervalued transaction,
extortionate credit transaction or fraudulent transaction has taken
place and in respect of which an order has been made by the
Adjudicating Authority under this Code;

viii. has executed a guarantee in favour of a creditor in respect of a

corporate debtor;

ix. has been subject to any disability, corresponding to clauses (a) to

(h), under any law in a jurisdiction outside India; or

x. has a connected person not eligible under clauses (i) to (ix).

Differential Pricing

An issuer may offer equity shares and convertible securities at different

prices, subject to the following condition:

i. the retail individual investors/shareholders or employees entitled

for reservation making an application for equity shares and
convertible securities of value not more than Rs.2 lakh, may be
offered equity shares and convertible securities at a price lower
than the price at which net offer is made to other categories of
applicants provided that such difference is not more than 10% of
the price at which equity shares and convertible securities are
offered to other categories of applicants.

ii. in case of a book built issue, the price of the equity shares and
convertible securities offered to an anchor investor cannot be lower
than the price offered to other applicants.

14
iii. in case of a composite issue, the price of the equity shares and
convertible securities offered in the public issue may be different
from the price offered in rights issue and justification for such price
difference should be given in the offer document.

iv. in case the issuer opts for the alternate method of book building,
the issuer may offer specified securities to its employees at a price
lower than the floor price. However, the difference between the
floor price and the price at which equity shares and convertible
securities are offered to employees should not be more than 10% of
the floor price.

v. Face value may be less than 10 but not less than Rs.1 if the issue
price is Rs.500 or more per share. If issue price is less than Rs.500
the face value shall be Rs.10/- per share.

Records of Policies and Claims (Section 14)

Every insurer, in respect of all business transacted by him, shall maintain:

i. a record of policies, in which shall be entered, in respect of every

policy issued by the insurer, the name and address of the
policyholder, the date when the policy was effected and a record of
any transfer, assignment or nomination of which the insurer has
notice.

ii. a record of claims, every claim made together with the date of the
claim, the name and address of the claimant and the date on which
the claim was discharged, or, in the case of a claim which is
rejected, the date of rejection and the grounds thereof.

iii. a record of policies and claims may be maintained in any such form,
including electronic mode, as may be specified by the regulations
made under this Act.
iv. Every insurer shall, in respect of all business transacted by him,
endeavour to issue policies above a specified threshold in terms of
sum assured and premium in electronic form, in the manner and
form to be specified by the regulations made under this Act.

Current Account Transaction (Section 2j)

‘current account transaction’ means a transaction other than a capital

account transaction and without prejudice to the generality of the
foregoing such transaction includes:

i. payments due in connection with foreign trade, other current

business, services, and short-term banking and credit facilities in
the ordinary course of business.

15
 ii. payments due as interest on loans and as net income from
investments.
iii. remittances for living expenses of parents, spouse and children
residing abroad, and
iv. expenses in connection with foreign travel, education and medical
care of parents, spouse and children.

Inquiry by Registrar - Section 206(4)

(1) The Registrar may call on the company to furnish in writing any
information or explanation on matters specified in the order within such
time as he may specify therein and carry out such inquiry as he deems fit
after providing the company a reasonable opportunity of being heard, if
the Registrar is satisfied:

(a) on the basis of information available with or furnished to him, or

(b)on a representation made to him by any person that the business of
a company is being carried on for a fraudulent or unlawful purpose
or not in compliance with the provisions of this Act, or

(c) the grievances of investors are not being addressed.

(2) Before calling the company to furnish in writing any information or

explanations and carrying out inquiry, the Registrar has to inform the
company of the allegations made against it by a written order.

(3) The Central Government may, if it is satisfied that the circumstances

so warrant, direct the Registrar or an Inspector appointed by it for the
purpose to carry out the inquiry under this sub-section.

(4) It is further provided that where business of a company has been or is

being carried on for a fraudulent or unlawful purpose, every officer of the
company who is in default shall be punishable for fraud in the manner as
provided in section 447.

Functions of winding up Committee

Section 277(5) states that the Company Liquidator shall be the convener
of the meetings of the winding up committee which shall assist and
monitor the liquidation proceedings in following areas of liquidation
functions, namely:

i. taking over assets.

ii. examination of the statement of affairs.
iii. recovery of property, cash or any other assets of the company
including
iv. benefits derived therefrom.
v. review of audit reports and accounts of the company.

16
 vi. sale of assets.
vii. finalization of list of creditors and contributories.
viii. compromise, abandonment and settlement of claims.
ix. payment of dividends, if any. And
x. any other function, as the Tribunal may direct from time to time.

Duties of Interim Resolution Professionals

The interim resolution professional shall perform the following duties -

Section 18(1) of Insolvency and Bankruptcy Code, 2016.

i. collect all information relating to the assets, finances and operations

of the corporate debtor for determining the financial position of the
corporate debtor, including information relating to—

a. business operations for the previous two years

b. financial and operational payments for the previous two years
c. list of assets and liabilities as on the initiation date; and
d. such other matters as may be specified.

ii. receive and collate all the claims submitted by creditors

iii. constitute a committee of creditors.

iv. monitor the assets of the corporate debtor and manage its
operations until a resolution professional is appointed by the
committee of creditors.

v. file information collected with the information utility, if necessary;

and

vi. take control and custody of any asset over which the corporate
debtor has ownership rights as recorded in the balance sheet of the
corporate debtor, or with information utility or the depository of
securities or any other registry that records the ownership of assets.
(g) perform such other duties as may be specified by the Board.

Auditor not to render certain services (Section 144)

An auditor appointed under this Act shall provide to the company only
such other services as are approved by the Board of Directors or the audit
committee, as the case may be. But such services shall not include any of
the following services (whether such services are rendered directly or
indirectly to the company or its holding company or subsidiary company),
namely:

1. accounting and book keeping services.

2. internal audit.

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3. design and implementation of any financial information system.
4. actuarial services.
5. investment advisory services.
6. investment banking services.
7. rendering of outsourced financial services.
8. management services. and
9. any other kind of services as may be prescribed.

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