ICAI Notes: Management & Administration | Corporate & Other Laws for CA Intermediate PDF Download

 Page 1


 
LEARNING OUTCOMES 
a
    
 
CHAPTER 
7 
 
MANAGEMENT AND 
ADMINISTRATION 
 
 
 
At the end of this Chapter, you will be able to: 
? Learn about the maintenance of registers and other 
documents required to be kept by a company. 
? Understand the significance and provisions relating to filing 
of Annual Return. 
? Know about pre-requisites of holding meetings for 
transacting business. 
? Explicate provisions governing Quorum and appointment of 
proxies. 
? Identify the various modes of casting votes. 
? Know about the ordinary and special resolution.  
? Elucidate provisions in respect of maintenance of Minutes. 
 
  
© The Institute of Chartered Accountants of India
Page 2


 
LEARNING OUTCOMES 
a
    
 
CHAPTER 
7 
 
MANAGEMENT AND 
ADMINISTRATION 
 
 
 
At the end of this Chapter, you will be able to: 
? Learn about the maintenance of registers and other 
documents required to be kept by a company. 
? Understand the significance and provisions relating to filing 
of Annual Return. 
? Know about pre-requisites of holding meetings for 
transacting business. 
? Explicate provisions governing Quorum and appointment of 
proxies. 
? Identify the various modes of casting votes. 
? Know about the ordinary and special resolution.  
? Elucidate provisions in respect of maintenance of Minutes. 
 
  
© The Institute of Chartered Accountants of India
a
 
 
 
CORPORATE AND OTHER LAWS 
7.2 
?  
 
 
 1. INTRODUCTION 
Chapter VII Consists of sections 88 to 122 as well as the Companies 
(Management and Administration) Rules, 2014. 
A company is an artificial legal entity distinct from its members. The affairs of the 
company are managed by the members and directors through resolutions passed 
at the validly held meetings. The day-to-day affairs of the company are managed 
by the directors who collectively act through Board of Directors. The Board 
performs its role within the powers granted to it. Certain powers can be exercised 
by the board on its own and some with the consent of the company at the 
general meetings. In the capacity as owners of the company, the shareholders 
ratify the actions of the board at the general meetings. In a way, the general 
Management & 
Administration
Section 88 - 122 -
Companies Act, 2013
Registers
Annual Return
Pre-requisites of a 
meeting -
Quorum, Chairman, 
Voting
Meetings
Resolutions
Minutes
Companies 
(Management & 
Administration) 
Rules, 2014
CHAPTER OVERVIEW 
 
© The Institute of Chartered Accountants of India
Page 3


 
LEARNING OUTCOMES 
a
    
 
CHAPTER 
7 
 
MANAGEMENT AND 
ADMINISTRATION 
 
 
 
At the end of this Chapter, you will be able to: 
? Learn about the maintenance of registers and other 
documents required to be kept by a company. 
? Understand the significance and provisions relating to filing 
of Annual Return. 
? Know about pre-requisites of holding meetings for 
transacting business. 
? Explicate provisions governing Quorum and appointment of 
proxies. 
? Identify the various modes of casting votes. 
? Know about the ordinary and special resolution.  
? Elucidate provisions in respect of maintenance of Minutes. 
 
  
© The Institute of Chartered Accountants of India
a
 
 
 
CORPORATE AND OTHER LAWS 
7.2 
?  
 
 
 1. INTRODUCTION 
Chapter VII Consists of sections 88 to 122 as well as the Companies 
(Management and Administration) Rules, 2014. 
A company is an artificial legal entity distinct from its members. The affairs of the 
company are managed by the members and directors through resolutions passed 
at the validly held meetings. The day-to-day affairs of the company are managed 
by the directors who collectively act through Board of Directors. The Board 
performs its role within the powers granted to it. Certain powers can be exercised 
by the board on its own and some with the consent of the company at the 
general meetings. In the capacity as owners of the company, the shareholders 
ratify the actions of the board at the general meetings. In a way, the general 
Management & 
Administration
Section 88 - 122 -
Companies Act, 2013
Registers
Annual Return
Pre-requisites of a 
meeting -
Quorum, Chairman, 
Voting
Meetings
Resolutions
Minutes
Companies 
(Management & 
Administration) 
Rules, 2014
CHAPTER OVERVIEW 
 
© The Institute of Chartered Accountants of India
 
 
a
    
 7.3 MANAGEMENT AND ADMINISTRATION 
 
meetings serve as the focal point for the shareholders to converge and give their 
decisions on the actions taken by the directors. 
The proceedings of the general meetings are recorded in the ‘minutes book’. On 
yearly basis, a company is required to hold its Annual General Meeting to transact 
requisite businesses including adoption of financial statements, appointment/re-
appointment of directors and auditors, etc., after the close of the financial year. In 
between two AGMs, a company may hold extra-ordinary general meetings (EGM) 
also if there is any need to transact certain urgent business. After the conclusion 
of AGM, the company is required to prepare Annual Return and file a copy 
thereof with the jurisdictional Registrar of Companies. Every company is duty-
bound to maintain register of members, register of debenture-holders and 
register of other security holders. 
Chapter VII of Companies Act, 2013 deals with the provisions relating to 
management and administration of companies. It covers Sections 88 to 122 and is 
divided under the following headings– 
  
To initiate, it is imperative that we streamline the understanding of this chapter so 
as to link it with the essential concepts along with their procedures which can be 
found in the respective rules, i.e. the Companies (Management and Administration) 
Rules, 2014 as amended from time to time. 
Registers
Sections 88 - 91 & 95
Annual Return
Sections 92 & 94
Meetings
Sections 96 - 102 & 121
Requisites of Convening a 
Meeting 
Sections 103 - 120
Management and Administration
Section 88 - 122 of Act read with Companies 
(Management & Administration) Rules, 2014
© The Institute of Chartered Accountants of India
Page 4


 
LEARNING OUTCOMES 
a
    
 
CHAPTER 
7 
 
MANAGEMENT AND 
ADMINISTRATION 
 
 
 
At the end of this Chapter, you will be able to: 
? Learn about the maintenance of registers and other 
documents required to be kept by a company. 
? Understand the significance and provisions relating to filing 
of Annual Return. 
? Know about pre-requisites of holding meetings for 
transacting business. 
? Explicate provisions governing Quorum and appointment of 
proxies. 
? Identify the various modes of casting votes. 
? Know about the ordinary and special resolution.  
? Elucidate provisions in respect of maintenance of Minutes. 
 
  
© The Institute of Chartered Accountants of India
a
 
 
 
CORPORATE AND OTHER LAWS 
7.2 
?  
 
 
 1. INTRODUCTION 
Chapter VII Consists of sections 88 to 122 as well as the Companies 
(Management and Administration) Rules, 2014. 
A company is an artificial legal entity distinct from its members. The affairs of the 
company are managed by the members and directors through resolutions passed 
at the validly held meetings. The day-to-day affairs of the company are managed 
by the directors who collectively act through Board of Directors. The Board 
performs its role within the powers granted to it. Certain powers can be exercised 
by the board on its own and some with the consent of the company at the 
general meetings. In the capacity as owners of the company, the shareholders 
ratify the actions of the board at the general meetings. In a way, the general 
Management & 
Administration
Section 88 - 122 -
Companies Act, 2013
Registers
Annual Return
Pre-requisites of a 
meeting -
Quorum, Chairman, 
Voting
Meetings
Resolutions
Minutes
Companies 
(Management & 
Administration) 
Rules, 2014
CHAPTER OVERVIEW 
 
© The Institute of Chartered Accountants of India
 
 
a
    
 7.3 MANAGEMENT AND ADMINISTRATION 
 
meetings serve as the focal point for the shareholders to converge and give their 
decisions on the actions taken by the directors. 
The proceedings of the general meetings are recorded in the ‘minutes book’. On 
yearly basis, a company is required to hold its Annual General Meeting to transact 
requisite businesses including adoption of financial statements, appointment/re-
appointment of directors and auditors, etc., after the close of the financial year. In 
between two AGMs, a company may hold extra-ordinary general meetings (EGM) 
also if there is any need to transact certain urgent business. After the conclusion 
of AGM, the company is required to prepare Annual Return and file a copy 
thereof with the jurisdictional Registrar of Companies. Every company is duty-
bound to maintain register of members, register of debenture-holders and 
register of other security holders. 
Chapter VII of Companies Act, 2013 deals with the provisions relating to 
management and administration of companies. It covers Sections 88 to 122 and is 
divided under the following headings– 
  
To initiate, it is imperative that we streamline the understanding of this chapter so 
as to link it with the essential concepts along with their procedures which can be 
found in the respective rules, i.e. the Companies (Management and Administration) 
Rules, 2014 as amended from time to time. 
Registers
Sections 88 - 91 & 95
Annual Return
Sections 92 & 94
Meetings
Sections 96 - 102 & 121
Requisites of Convening a 
Meeting 
Sections 103 - 120
Management and Administration
Section 88 - 122 of Act read with Companies 
(Management & Administration) Rules, 2014
© The Institute of Chartered Accountants of India
a
 
 
 
CORPORATE AND OTHER LAWS 
7.4 
Chapter VII applies to all the companies, public and private, and has special 
provisions applicable to One Person Company (OPC), which are enumerated in 
section 122 of the Act and are discussed later in this chapter. 
 2. REGISTERS 
The provisions relating to maintaining the various registers as per the Companies 
Act, 2013 are contained in Sections 88 – 91. Along with these provisions, the 
Companies (Management & Administration) Rules, 2014 are also applicable to the 
maintenance of registers by a company. Various provisions relating to keeping 
and maintenance of registers are as follows:   
 
REGISTER OF MEMBERS, ETC. [SECTION 88]
Section 88 (1) of the Companies Act, 2013 requires that every company shall 
keep and maintain the following registers:  
Registers
Section 88 - Register of 
Members, etc.
- Register of members - Rule 3; Form MGT - 1
- Register of debenture-holders/any other
security-holder - Rule 4; Form MGT - 2
- Maintenance of Registers of members etc.-
Rule 5
- Index of names of members - Rule 6
- Foreign Register - Rule 7; Form MGT - 3
Section 89 -
Declaration i.r.o. 
beneficial interest in 
any share
Rule 9 - Forms MGT-4, 
MGT- 5, MGT-6
Section 90 -
Register of significant 
beneficial owners
Section 91 - Power to
close register of
members or debenture
holders or other
security holders
Rule 10 - Procedure for 
closing the register of 
members, debenture-
holders and other 
security holders
© The Institute of Chartered Accountants of India
Page 5


 
LEARNING OUTCOMES 
a
    
 
CHAPTER 
7 
 
MANAGEMENT AND 
ADMINISTRATION 
 
 
 
At the end of this Chapter, you will be able to: 
? Learn about the maintenance of registers and other 
documents required to be kept by a company. 
? Understand the significance and provisions relating to filing 
of Annual Return. 
? Know about pre-requisites of holding meetings for 
transacting business. 
? Explicate provisions governing Quorum and appointment of 
proxies. 
? Identify the various modes of casting votes. 
? Know about the ordinary and special resolution.  
? Elucidate provisions in respect of maintenance of Minutes. 
 
  
© The Institute of Chartered Accountants of India
a
 
 
 
CORPORATE AND OTHER LAWS 
7.2 
?  
 
 
 1. INTRODUCTION 
Chapter VII Consists of sections 88 to 122 as well as the Companies 
(Management and Administration) Rules, 2014. 
A company is an artificial legal entity distinct from its members. The affairs of the 
company are managed by the members and directors through resolutions passed 
at the validly held meetings. The day-to-day affairs of the company are managed 
by the directors who collectively act through Board of Directors. The Board 
performs its role within the powers granted to it. Certain powers can be exercised 
by the board on its own and some with the consent of the company at the 
general meetings. In the capacity as owners of the company, the shareholders 
ratify the actions of the board at the general meetings. In a way, the general 
Management & 
Administration
Section 88 - 122 -
Companies Act, 2013
Registers
Annual Return
Pre-requisites of a 
meeting -
Quorum, Chairman, 
Voting
Meetings
Resolutions
Minutes
Companies 
(Management & 
Administration) 
Rules, 2014
CHAPTER OVERVIEW 
 
© The Institute of Chartered Accountants of India
 
 
a
    
 7.3 MANAGEMENT AND ADMINISTRATION 
 
meetings serve as the focal point for the shareholders to converge and give their 
decisions on the actions taken by the directors. 
The proceedings of the general meetings are recorded in the ‘minutes book’. On 
yearly basis, a company is required to hold its Annual General Meeting to transact 
requisite businesses including adoption of financial statements, appointment/re-
appointment of directors and auditors, etc., after the close of the financial year. In 
between two AGMs, a company may hold extra-ordinary general meetings (EGM) 
also if there is any need to transact certain urgent business. After the conclusion 
of AGM, the company is required to prepare Annual Return and file a copy 
thereof with the jurisdictional Registrar of Companies. Every company is duty-
bound to maintain register of members, register of debenture-holders and 
register of other security holders. 
Chapter VII of Companies Act, 2013 deals with the provisions relating to 
management and administration of companies. It covers Sections 88 to 122 and is 
divided under the following headings– 
  
To initiate, it is imperative that we streamline the understanding of this chapter so 
as to link it with the essential concepts along with their procedures which can be 
found in the respective rules, i.e. the Companies (Management and Administration) 
Rules, 2014 as amended from time to time. 
Registers
Sections 88 - 91 & 95
Annual Return
Sections 92 & 94
Meetings
Sections 96 - 102 & 121
Requisites of Convening a 
Meeting 
Sections 103 - 120
Management and Administration
Section 88 - 122 of Act read with Companies 
(Management & Administration) Rules, 2014
© The Institute of Chartered Accountants of India
a
 
 
 
CORPORATE AND OTHER LAWS 
7.4 
Chapter VII applies to all the companies, public and private, and has special 
provisions applicable to One Person Company (OPC), which are enumerated in 
section 122 of the Act and are discussed later in this chapter. 
 2. REGISTERS 
The provisions relating to maintaining the various registers as per the Companies 
Act, 2013 are contained in Sections 88 – 91. Along with these provisions, the 
Companies (Management & Administration) Rules, 2014 are also applicable to the 
maintenance of registers by a company. Various provisions relating to keeping 
and maintenance of registers are as follows:   
 
REGISTER OF MEMBERS, ETC. [SECTION 88]
Section 88 (1) of the Companies Act, 2013 requires that every company shall 
keep and maintain the following registers:  
Registers
Section 88 - Register of 
Members, etc.
- Register of members - Rule 3; Form MGT - 1
- Register of debenture-holders/any other
security-holder - Rule 4; Form MGT - 2
- Maintenance of Registers of members etc.-
Rule 5
- Index of names of members - Rule 6
- Foreign Register - Rule 7; Form MGT - 3
Section 89 -
Declaration i.r.o. 
beneficial interest in 
any share
Rule 9 - Forms MGT-4, 
MGT- 5, MGT-6
Section 90 -
Register of significant 
beneficial owners
Section 91 - Power to
close register of
members or debenture
holders or other
security holders
Rule 10 - Procedure for 
closing the register of 
members, debenture-
holders and other 
security holders
© The Institute of Chartered Accountants of India
 
 
a
    
 7.5 MANAGEMENT AND ADMINISTRATION 
 
(i)  Register of Members (holding of each class of equity and preference shares 
of each member residing in or outside India shall be shown separately in the 
register)  
(ii)  Register of Debenture-holders (DH); and  
(iii)  Register of any other security holders (OSH). 
Maintenance of Register of Members 
(i)  Every company limited by shares shall, from the date of its registration, 
maintain a register of its members in Form No. MGT-1. [Rule 3 (1)] 
However, in case of a company existing on the commencement of the 
Companies Act, 2013, the particulars as available in the register of members 
maintained under the Companies Act, 1956 shall be transferred to the new 
register of members in Form No. MGT-1. In case additional information, 
required as per the provisions of the Companies Act, 2013 and the Rules 
made thereunder, is provided by the members, such information may also 
be added in the register as and when provided. [Proviso to Rule 3 (1)] 
(ii)  In case of a company not having share capital, the register shall contain the 
following particulars, in respect of each member–  
? Name of the member, address (registered office address in case the 
member is a body corporate); email address; Permanent Account 
Number or Corporate Identity Number (‘CIN’); Nationality; in case 
member is a minor – name of his guardian and the date of birth of the 
member, name and address of the nominee; 
? Date of becoming the member; 
? Date of cessation; 
? Amount of guarantee, if any; 
? Any other interest, if any; and 
? Instructions, if any, given by the member with regard to sending of 
notices, etc. [Rule 3 (2)] 
However, in case of a company existing on the commencement of the 
Companies Act, 2013, the particulars as available in the register of members 
maintained under the Companies Act, 1956 shall be transferred to the new 
register of members in Form No. MGT-1. In case additional information, 
© The Institute of Chartered Accountants of India