COMPILATION OF FAQS COMPANY LAW / LLP SERIES 4

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COMPILATION OF FAQS COMPANY LAW / LLP SERIES 4 Concept by Below is a compilation of selective questions asked by different persons on www.expertspanel.

Complied by Priyanka Wadhwa 5 th October 2018 Below is the List of top 5 Experts who have answered most Queries in this category as on the date of this Compilation S. No.

1 COMPILATION OF FAQS COMPANY LAW / LLP SERIES 4 Concept by Below is a compilation of selective questions asked by different persons on and answered by various Experts empanelled thereon. The same is being shared as a knowledge sharing process for the benefit of all. Complied by Priyanka Wadhwa 5 th October 2018 Below is the List of top 5 Experts who have answered most Queries in this category as on the date of this Compilation S. No. Name 1, Delhi 2 Prakhar Bansal, Bilaspur, Chhattisgarh 3 CS. Sukhwinder Singh, Delhi 4 CS. Deep Vaghela, Gujarat 5 D. K. Bholusaria, Delhi S. Query asked No. by 4.1 Abhishek Daga, CA, Secund erabad, Telangana, India 4.2 CA P. Bansal Question Are the forms for formation of llp active? As in can we incorporate llp right now? Some of my clients were directors in some companies and even some closed there companies 5-6 years back and they are not directors in any company since last more than 5-6 years. but they have DIN. Answered by CA Prakhar Bansal, CA, Bilaspur Answer Forms for incorporation are available... but DPIN / DIN not available Even those persons holding DIN who are not a director in any company at present are required to file DIR 3 KYC. If they do not file there DIN will be deactivated, and in future when and if they wish to become director in any company they will be required to file DIR 3 KYC with a fees of Rs 5000/- What is the status of the DIR - 3 filing - please guide?

2 4.3 Hitesh Lachhwani, CS in Job, Ahmedabad 4.4 G D Singla & CO, CA in Practice, Ludhiana Can any shareholder execute the POA of his rights in favour of other shareholder or any other person? Can bank take private ltd company property as mortage for loan to director proprietory firm He may.. but that would be mutual understanding between the two... company would not be bound by it No its restricted u/s 185.however if the private company satisfies all conditions of the private company exemption notification (as amended from time to time)... then it could give.. otherwise not. 4.5 CA Shankar Dutt, CA in Practice, Delhi One of my clients company name is reflecting in form No STK-5 (Public Notice No- ROC- DEL/248/STK- 5/2018/2912) Date: Please see that all compliance are upto date. Company should write a letter stating its stance too The notice clearly says - Any person objecting to the proposed removal/striking off of name of the companies from the Register of companies may send his/her objection to the office address mentioned hereabove within thirty days from the date of publication of this notice. Now 30 days are already over. So, should i do something

3 4.6 Shikha Singh, CA, Delhi (Actually the client is not interested in the company)? Or the company is automatically closed. A company has discounted its bills receivable with banks. Now, how it should be disclosed in financial statement? There are two alternatives: 1. Both Loans & Debtors may be disclosed in balance sheet at its gross value. 2. Loans may be netted off with debtors and liability may be shown as contingent in notes to account. Which accounting treatment is correct? Views searched is as under:- 1. (i) The various authorities have described that discounting of bills as a loan purely from the point of view of the prevailing banking practice. This is clear from the reason advanced while amending Section 293 of the Companies Act, 1956, in 1960 (Ramaiya, A Guide to Companies Act, 1980, p. 636). It is not necessary that a good banking practice is also a sound accounting practice. (ii) The argument that as soon as a demand bill or a usance bill before acceptance is discounted, the drawer becomes liable to the banker for the amount, is not correct. The legal position regarding bills of exchange is that the liability of the drawee arises only when he accepts the bill. However, in the above mentioned case, it is implied that the drawee will accept the bill and honour it. Therefore, on the consideration of substance over form, the bills discounted with a bank whether accepted or not can not be treated as loans. Is there any guidance of ICAI on this matter or any other legal support? According to Eric. L. Kohler (A Dictionary for Accountants, Fourth Edition, p. 107) a contingent liability is an obligation, relating to a past transaction or other event or condition, that may arise in consequence of a future event now deemed possible but not probable. The bills discounted with a bank represent a contingent liability since their dishonour by the drawee, though possible is not considered probable, because in such cases there is an implied or written prior agreement under which the buyer

4 (the drawee) agrees to make the payment through a bank. (iii) The argument that if bills (including usance bills before acceptance) discounted are not treated as a liability, the balance sheet will fail to give a true and fair view of the state of affairs is also not correct because they are shown as contingent liabilities by way of footnote to the balance sheet. Thus the nature of the liability is clearly brought to the notice of the user of the financial statements. 2. In view of the above, the opinion that a bill not accepted by the drawee and discounted with a bank should be shown as a contingent liability because the liability of the drawer of the bill has not been determined on the date of the balance sheet unless the bill has been dishonoured by that date. 3. The practice of disclosing the gross amount of sundry debtors on the assets side and the amount of monies received from the banks against bills on the liabilities side is also prevalent. This practice is also permissible if proper disclosure of the nature of the transaction has been made. 4.7 Shikha Singh, CA, Delhi In case of holding subsidiary relation, the shares of subsidiary is Yes.. it would be applicable held by holding company and holding company s shares ultimately held by individuals. whether in this case also,

5 shareholders of subsidiary company needs to declare the beneficial interest in BEN-1? 4.8 Sanjay Bajaj, CA, Bangalore 4.9 Parvesh Kumar, CA, India Bonus share issue by a unlisted public company in demat form. Approved by directors first and then shareholders approved in general meeting. What is the time limit for allotment of bonus shares? Pls give section number reference also? In a private limited company, can we have the shorter notice for AGM say less than 21 days as mentioned. PAS 3 has to be within 30 days of allotment, which would be done at General meeting. No specific dates provided to my knowledge for issue of bonus shares.. it should be as members decided Now AGM can be held on Sunday. Also it can be held with shorter duration of notice if 95% of shareholders agree as per s. 101 (as amended) 1) Upto which date the balance sheet must be signed if we have to keep the AGM on 29th CA Subhash bhaskar, New delhi 2) Also can we have AGM on sunday as 30th is sunday this time. One of the director of private ltd. company incurs pre-incorporation If board agrees.. it can be.. btr take amount and then reimburse

6 expenses like CA fee etc. Can this amount can be adjusted against the share capital subscribed by him in MOA or he has to pay the full subscribed amount through cheque?

COMPILATION OF FAQS COMPANY LAW / LLP SERIES 1

COMPILATION OF FAQS COMPANY LAW / LLP SERIES 1 Below is a compilation of selective questions asked by different persons on www.expertspanel.in and answered by various Experts empanelled thereon. The same