Discuss about the remedies available to a debenture holder when his/her debentures are in jeopardy

If the company fails to pay interest or principal on the due date or fails to comply with any of the terms and conditions under which the debenture was issued, the debenture holder can adopt any of the following remedial measures:

1. He may file a suit for the recovery of money by sale of the assets which were charged for the payment of the money.

2. He may file an application for the appointment of a receiver by the court.

3. He may himself appoint a receiver if the terms of the debenture entitled him to do so.

4. The trustees may sell the properties charged, if such a Power is given to them under the terms of the debenture.

5. He may apply to the court for the foreclosure of the company's right to redeem the properties charged for the Payment of the money.

6. He may present Petition for the winding up of the company.

Read More

What are the liabilities of contributories as present and past members in case of winding-up of a company

Section 235 of Companies Act states that

 
1. In the event of a company being wound up, every present and past member shall be liable to contribute to the assets of the company to an amount sufficient for payment of its debts and liabilities and the costs, charges and expenses of the winding up, and for the adjustment of the rights of the contributories among themselves, with the qualifications following, that is to say:-

i. A past member shall not be liable to contribute if he has ceased to be a member for one year or upwards before the commencement of the winding up;

ii. A past member shall not be liable to contribute in respect of any debt or liability of the company contracted after he ceased to be a member;

iii. A past member shall not be liable to contribute unless it appears to the Court that the existing members are unable to satisfy the contributions required to be made by them in pursuance of this Act;

iv. In the case of a company limited by shares, no contribution shall be required from any member exceeding the amount, if any, unpaid on the shares in respect to which he is liable as a present or past member;

v. In the case of a company limited by guarantee, no contribution shall be required from any member exceeding the amount undertaken to be contributed by him to the assets of the company in the event of its being wound up;

vi. Nothing in this Act shall invalidate any provision contained in any policy of insurance or other contract whereby the liability of individual members on the policy or contract is restricted or whereby the funds of the company are alone made liable in respect of the policy or contract;

vii. A sum due to any member of a company in his character of a member, by way of dividends, profits or otherwise, shall not be deemed to be a debt of the company payable to that member in a case of competition between himself and any other creditor who is not a member of the company.

2. In the winding up of a company limited by guarantee which has a share capital, every member thereof shall be liable to pay the following amounts namely:

(a) The amount undertaken to be contributed by him to the assets of the company in the event of its being wound up; and

(b) An amount to the extent of any sums unpaid on any shares held by him.

Read More

What remedies are available to an applicant who has been induced to buy shares of a company by a material mis-representation of facts in a prospectus?

Remedies available to the shareholders for untrue statement in the prospectus:

In case of untrue and misleading information furnished in the prospectus its promoters and directors will be held liable. The shareholders may claim to refund the value of shares allotted and the Shareholders may claim demurrage for any losses incurred for such misstatement furnished in the prospectus. But they cannot retain the Ave and claim the demurrage simultaneously.

Read More

State the provisions of the Companies Act, 1994 as to appointment, terms and remuneration of Managing Directors

The managing director is a director who is “entrusted with any substantial power of Management”
 

The appointment of managing director:

The appointment of a managing director or of a whole time director can be made by any of the methods:

1. An agreement with the company
2. A clause in a memorandum or articles of the company
3. A resolution passed by a company in its general meeting
4. Resolution of the board of director
 

No company shall, after the commencement of this Act, appoint or employ any individual as its managing director for a term exceeding five years at a time.

Power and duties of a managing director:

 
The power and duties of a managing director are specified in

1. the agreement with the company by which he is appointed

2. in the memorandum or articles of the company

3. in a resolution passed by the company in general meeting

4.a resolution by its board of director

Read More

Who can inspect mendatory documents and books and take copies thereof of a company?

The books of account and other books and papers of every company shall be open to inspection during business hours by the registrar or by such other Government officer as may be authorized by theGovernment in this behalf-

1. It shall be the duty of every director or other officer of the company to produce to the person making inspection.

2. It shall also be the duty of every director and other officer of the company to give to the inspection person all assistance in connection with the inspection, which the company may be reasonable, expected to give.

3. Where an inspection of the books of account and other books and papers of the company has been made under this section the inspecting person shall make a report to the Government.

Read More

What documents, registers and books are maintained in a company’s registered office?

Books:

Statutory Books: The companies Act requires every company to keep the following books:

a) Register of members:

1. Name & address & occupation
2. Respective shares,
3. Date of registration as member,
4. Date at which any person ceased to be a member

b) Register of Directors:

1. In case of individual director- name, address, nationality, occupation & particulars of directorship,
2. In case of a corporation- corporate name, principal office and name, address & nationality of each of its directors,
3. In case of a firm- name, address & nationality of each partner and the date on which each became a partner.

c) Register of qualifying share of directors,
d) Register of debenture holders,
e) Register of mortgages and enter there in specific description,
f) Minutes of meetings,
g) Register of contracts,
h) Books of accounts:
i) Statement of receipts & payments,
j) Statement of sales & purchases,
k) Statement of assets &liabilities,
l) Cost records, if applicable.

Statistical books: (Sec. 36)

1. Share application & allotment,
2. Addition of shareholder,
3. Share transfer,
4. Dividend,
5. Interest on dividend.

Read More

Discuss the requirements of law relating to filing of accounts of companies operating in Bangladesh but incorporated outside Bangladesh

(1) Every foreign company shall, in every calendar year-

(a) make out a balance sheet and profit and loss account or in the case of a company not trading for profit, and income and expenditure account it the company is handling company, group accounts in such form and consigning such particulars and including such documents, and under the provision of this Act it would, if it had been accompany within the meaning of this Act, have been required to make out and lay before the company in general meeting; and

(b) Deliver three copies of those documents to the Registrar: Provided that the Government may by notification in the official Gazette direct that in the case of a foraging company or class of foreign Combines the requirements of clause (a) shall not apply, or shall apply subject to such exceptions and modification as many be specified in the notification.

(2) If any such document as is mentioned in sub-section (1) is not written in Penal or English language, there shall be annexed to it a certified translating thereof.

Read More

What are the procedures for reduction of share capital and how the same is confirmed?

Reduction of share capital
 

The power to reduce capital must be given by the articles. If no such power, the articles may be changed by a special resolution. According to section 59, the share capital may be reduced by:

a) reducing or extinguishing the liability of members for uncalled share capital; or
b) writing off lost share capital; or
c) paying off share capital which is in excess of the wants of the company; or
d) All these are to be done only by way approve by the court.
 

Procedure for Reduction of Share Capital
 

Reduction of capital is possible only by passing a special resolution and confirmation by the court. The court would inquire into the objections, if any, raised by the creditors. In this respect the court settles the list of creditors entitled to object and issues public notices (sec. 62). On hearing the objections, the court may confirm the reduction on such terms and conditions as it may dam fit (sec. 64).

Read More

State the circumstances in which a company may be wound up by the Court.

Section 241 states the following circumstances under which a company may be wound up by the Court:

i. lf the company has by special resolution resolved that the company be wound up by the Court; or
ii. lf default is made in filing the statutory report or in holding the statutory meeting; or
iii. lf the company does not commence its business within a year from its incorporation, or suspends its business for a whole year; or
iv. lf the number of members is reduced, in the case of a private company below two, or, in the case of any other company, below seven; or
v. lf the company is unable to pay its debts; or
vi. If the Court is of opinion that it is just and equitable that the company should be wound up.

Read More

Name the mortgages and charges required to be registered compulsorily with the Registrar of Joint Stock Companies. What is the effect of non-registration of such mortgages and charges?

The mortgages and charges those are required to be registered compulsorily with the Registrar of Joint Stock Companies:

a) a mortgage or charge for the purpose of securing any issue of debentures; or
b) a mortgage or charge on uncalled share capital of the company, or
c) a mortgage or charge on any immovable property wherever situated or any interest therein, or
d) a mortgage or charge on any book debts or the company, or
e) a mortgage or charge, not being a pledge on any moveable property of the company except stock-in- trade.
 

Due to non-registration of above mentioned mortgages and charges to be considered void and when a mortgage or charge becomes void, the money secured thereby shall immediately become payable.

Read More