PART I BUSINESS LAWS & COMPANY LAW

Transcription

1 Contents About the author I-5 Preface to fourth edition I-7 Syllabus I-19 CA - Intermediate (IPC) Nov Examinations I-23 CA - Intermediate (IPC) May 2015 Examinations I-27 CA - Intermediate (IPC) Nov Examinations I-29 CA - Intermediate (IPC) May 2014 Examinations I-33 PART I BUSINESS LAWS & COMPANY LAW 1 INDIAN CONTRACT ACT, 1872 Meaning of Contract, Agreement and Promise 3 Essentials of a Valid Contract - Sec Types of Contracts 4 Proposal/Offer 4 Acceptance 5 Communication of Offer and Acceptance 6 Revocation of Offer and Acceptance 6 Consideration 8 Capacity to Contract 11 Free Consent 12 Coercion 12 Undue Influence 13 Coercion vs. Undue Influence 13 Fraud - Sec Misrepresentation 14 Fraud vs. Misrepresentation 14 Consequences of Coercion, Fraud, Misrepresentation & undue influence - Sec Mistake 15 I-9

2 I-10 CONTENTS Unlawful Object and Consideration 15 Agreements expressly declared void 16 Performance of Contract 20 Discharge of a Contract 23 Breach of Contract 26 Remedies for breach of contract - Sec Contingent Contract 31 Quasi Contract 31 Contract of Indemnity - Secs. 124 & Contract of Guarantee - Secs Rights of Surety 35 Invalid Guarantee 35 Indemnity vs. Guarantee 36 Contract of Bailment 38 Contract of Pledge 41 Bailment vs. Pledge 42 Contracts of Agency 46 2 NEGOTIABLE INSTRUMENTS ACT, 1881 Negotiable Instruments - Sec Presumptions as to Negotiable Instruments 53 Promissory Note - Sec Bills of Exchange - Sec Acceptance of Bills of Exchange 55 Maturity of a Promissory Note or Bill of Exchange (Secs ) 56 Promissory Note vs. Bills of Exchange 58 Cheque - Sec Crossing of Cheques 59 Holder and Holder in due course 62 Privileges of a Holder in due Course 63 Payment in Due Course 66 Classification of Instruments 66 Negotiation 67 Endorsement - Sec Capacity to incur liability under instrument 68 Liabilities of Parties 69 Liability on an instrument made, drawn etc. without considerations - Sec Rights and Obligations of parties to an instrument obtained illegally 72

3 CONTENTS I-11 Discharge of Negotiable Instruments & Discharge of Parties to Negotiable Instruments 73 Dishonour 74 Dishonour of Cheque for Insufficiency, etc. of Funds in the Account 76 Material Alteration and its Effect 77 Noting and Protest 78 Acceptance for Honour and Payment for Honour 79 Presentment of Instrument 80 Hundis 80 Miscellaneous Illustrations - Negotiable Instruments Act 82 3 PAYMENT OF BONUS ACT, 1965 Applicability and Non-Applicability of the Act 86 Important Definitions 87 Eligibility for Bonus 93 Disqualification for Bonus 94 Payment and Calculation of Bonus - Secs Set on and Set off Allocable Surplus - Sec Deductions from Bonus - Secs. 17 & Time Limit for Payment of Bonus - Sec Special Provisions applicable to New Establishments - Sec Recovery of Bonus due from an employer - Sec Inspectors - Sec Payment of Bonus Linked with Production or productivity - Sec. 31A 100 Exemption from Provisions of the Act - Sec Summarised Procedure for Computation of Bonus EPF AND MISCELLANEOUS PROVISIONS ACT, 1952 Applicability of PF Act - Sec Non-Applicability of PF Act - Sec Definitions 105 Employees Provident Fund Scheme 107 The Central Board - Sec. 5A 107 Executive Committee - Sec. 5AA 108 Employees Provident Fund Scheme - Sec Employees Pension Scheme - Sec. 6A 109 Employee s Deposit Linked Insurance Scheme 110 Determination of Money due from the Employer - Sec. 7A 111

4 I-12 CONTENTS Review of Order - Sec. 7B 111 Appeal against Order of Officer - Secs. 7I, 7L 112 Payment of Interest 112 Protection against Attachment - Sec Priority of Payment of Contribution over other debts 113 Inspectors - Sec Authorising certain employers to maintain Provident Fund Accounts - Sec. 16A 114 Transfer of Accounts - Sec. 17A 115 Liability of Employer in case of Transfer of Establishment - Sec. 17B PAYMENT OF GRATUITY ACT, 1972 Applicability of the Act - Sec Definitions 117 Eligibility for Gratuity - Sec. 4(1) 120 Calculation of amount of Gratuity - Sec. 4(2) 120 Maximum Amount of Gratuity - Sec. 4(3) 121 Gratuity in case of a Disabled Employee - Sec. 4(4) 121 Forfeiture of Gratuity 122 Compulsory Insurance 123 Exemption from Provisions of the Act - Sec Nomination - Sec Determination and Payment of Gratuity - Sec Inspectors - Secs. 7A & 7B 126 Recovery of Gratuity 126 Protection of Gratuity COMPANY LAW - BASICS, INCORPORATION, MOA AND AOA Sections covered in this Chapter 128 Introduction 128 Meaning and characteristics of company 129 Lifting of corporate veil 131 Types of companies under the Act 133 Conversion of public company into a private company or vice versa 142 Mode of registration/incorporation of company 143 Provisions w.r.t. Registered Office of a Company - Sec Contractual relationships established on incorporation of company 148 Overriding Effect of Act over the MOA and AOA - Sec

5 CONTENTS I-13 Memorandum of association 149 Provisions w.r.t. Name of Company - Sec Alteration of the memorandum 151 Rectification of name of company - Sec Doctrine of ultra vires 154 Articles of association 156 Doctrine of constructive notice 157 Doctrine of indoor management 158 Preliminary contract 159 Conversion of Companies Already Registered - Sec Promoters 161 Service of documents - Sec Miscellaneous provisions COMPANY LAW - PROSPECTUS AND ALLOTMENT OF SECURITIES Sections covered in this chapter 165 Prospectus 166 Issue of securities by the company - Sec Power of SEBI to regulate issue and transfer of securities - Sec Deemed prospectus - Sec Matters to be stated in the prospectus - Sec Variation in terms of contract or objects in prospectus - Sec Offer of sale of shares by certain members of company - Sec Public offer of securities to be in dematerialized form - Sec Advertisement of prospectus - Sec Shelf Prospectus - Sec Red herring Prospectus - Sec Abridged prospectus - Sec Criminal liability for mis-statements in prospectus - Sec Civil liability for mis-statements in prospectus - Sec Punishment for fraudulently inducing persons to invest money - Sec Action by affected persons - Sec Punishment for personation for acquisition, etc., of securities - Sec Allotment of securities by company - Sec Securities to be dealt with in stock exchanges - Sec Payment of commission for subscription 177 Global depository reciepts - Sec

6 I-14 CONTENTS Offer of invitation for subscription of securities on private placement - Sec Acceptance of deposits by companies 182 Membership of company COMPANY LAW - SHARE CAPITAL, DEBENTURES & CHARGE Sections covered in this chapter 190 Concept of capital 191 Kinds, nature and numbering of share capital - Secs. 43, 44 & Share certificate - Sec Voting rights of a member - Sec Variation of shareholder s rights - Sec Calls on shares - Secs. 49 & Issue of securities at a premium - Sec Issue of shares at a discount - Sec Issue of sweat equity shares - Sec Transfer and transmission of securities - Sec Transfer vs. Transmission of shares 198 Punishment for personation of shareholder - Sec Refusal to Register Transfer and Appeal against Refusal - Sec Rectification of Register of members - Sec Blank transfers 200 Forged transfers 200 Forfeiture of shares 202 Further issue of share capital - Sec. 62 (Right shares) 203 Alteration of share capital - Secs. 61 & Reduction of the share capital - Sec Issue of bonus shares - Sec Restrictions on purchase by company or giving of loans by it for purchase of its shares - Sec Power of company to purchase its own securities - Secs. 68, 69 & Nomination facility in respect of securities - Sec Debentures - Sec Registration of a charge 213 Fixed charge v. Floating charge COMPANY LAW - MEETINGS AND PROCEEDINGS Sections covered in this chapter 218

7 CONTENTS I-15 Register of members - Sec Rules relating to manner for maintenance of the register u/s Rules related to index of names to be included in register 220 Declaration in respect of beneficial interest in any share - Sec Investigation of beneficial ownership of shares in certain cases 221 Power to close register of members or debenture holders or other security holders - Sec Annual return - Sec Return to be filed with registrar in case of promoters stake changes 222 Place of keeping and inspection of registers, returns, etc. - Sec Registers, etc., to be evidence 223 Preservation of register of members etc. and annual return 223 Annual general meeting - Secs. 96, 97, Examples 224 Extraordinary general meeting - Secs. 98, 99, Class meetings 228 Essentials of a valid meeting 228 Notice - Secs. 101, Quorum - Sec Voting and the right to demand a poll - Secs. 106, 107, 108, Proxies and representation of corporates and governors - Secs. 105, 112 and Resolution - Secs. 114, 115, 116, Circulation of member s resolution - Sec Postal ballot - Sec Minutes - Secs. 118 & Miscellaneous 248 Company law in a computerized environment 250 PART II ETHICS 10 INTRODUCTION TO BUSINESS ETHICS Ethics and Morals 255 Business Ethics 256 Benefits of Ethical Business 256 Social Sins listed by Mahatma Gandhi 257 Sources of Ethical Standards 257 Stakeholders 258

8 I-16 CONTENTS 11 CORPORATE GOVERNANCE AND CSR Corporate Governance 260 Social issue connected with Business Enterprises 262 Corporate Social Responsibility 262 External Standards and Developments WORKPLACE ETHICS Workplace Ethics ENVIRONMENT AND ETHICS Sustainable Development 273 Pollution and Resource Depletion 273 Ecological Ethics 275 Eco Friendly Business practices ETHICS IN MARKETING Relationship between Ethics and Marketing 279 Pragmatic Reasons for Ethical Behaviour in Marketing 280 Competition 280 Competition Policy and Law ETHICS IN ACCOUNT AND FINANCE Importance of Ethics for a Finance and Accounting Professional 286 Fundamental Principles of Ethics in the Context of Finance and Accounts 286 Factors creating an Ethical Accounting Environment 287 Reasons for Unethical Behaviour in context of Accounts and Finance 287 Ethical Conflict Resolution in the Context of Finance and Accounting 287 Threats faced by a Finance and Accounting Professional 288 Safeguards to be adopted by a Finance and Accounting Professional to counter/ overcome Various Threats 289

9 CONTENTS I-17 PART III COMMUNICATION 16 ESSENTIALS OF COMMUNICATION Inter Departmental Communication 299 Verbal Communication 299 Forms of Non-verbal Communication 303 Barriers to Effective Communication 304 Business Letter INTER PERSONAL COMMUNICATIONS Critical Thinking 311 Active Listening 312 Emotional Intelligence GROUP DYNAMICS Features of Groups 317 Types of Formal Group 317 Team Roles 318 Group Think 319 Group Conflicts 319 Consensus Building 320 Negotiation and Bargaining ETHICS IN COMMUNICATION Concept of Ethical Communication 323 Ethical Dilemmas in Communication CORPORATE CULTURE, CHANGE AND INNOVATION Corporate Culture 327 Organisation Wide Change 328 Innovation 330

10 I-18 CONTENTS 21 COMMUNICATIONS IN BUSINESS ENVIRONMENT Press Releases 337 Affidavit 337 Power of Attorney 338 Indemnity Bond 338 Lease Deed 339 Gift Deed 340 Partnership Deed 341