Companies Act, 2013: Sections 41 to 80
A section-wise guide to global depository receipts, private placement, share capital and debentures, acceptance of deposits, and registration of charges under the Companies Act, 2013.
Scope of this guide: Sections 41 and 42 conclude the provisions dealing with offer of securities. Sections 43 to 72 principally cover share capital and debentures. Sections 73 to 76A regulate acceptance of deposits. Sections 77 to 80 begin the statutory framework for registration of charges. The linked pages below explain the individual provisions in greater detail.
Offer of Securities: Sections 41 and 42
Sections 41-42Section 41 enables a company, after passing the prescribed special resolution and subject to prescribed conditions, to issue depository receipts in a foreign country. Section 42 lays down the statutory route for a private placement of securities to a select group of persons, subject to the Act and applicable rules.
Share Capital and Debentures: Sections 43 to 72
These provisions regulate the nature and classes of share capital, certificates and voting rights, securities premium, preference and sweat equity shares, transfer and transmission, alteration and reduction of capital, buy-back, debentures and nomination.
Section 43Explains equity share capital and preference share capital and the statutory classification of share capital for companies limited by shares.
Sections 44-46Covers the movable-property character of shares or debentures, distinctive numbering where applicable, and the evidentiary role and issue of share certificates.
Sections 47-48Deals with voting rights attached to equity and preference share capital and the procedure for varying rights attached to a class of shares.
Sections 49-50Addresses uniform calls on shares of the same class and the circumstances in which a company may accept amounts remaining unpaid on shares even though not called up.
Sections 51-52Explains proportionate dividend where permitted and the permitted uses and treatment of the securities premium account.
Sections 53-54Section 53 generally prohibits issue of shares at a discount, subject to statutory exceptions. Section 54 governs issue of sweat equity shares to eligible directors or employees subject to prescribed conditions.
Section 55Sets out the framework for issue and redemption of preference shares, including the general prohibition on irredeemable preference shares and statutory conditions for redemption.
Section 56Provides the statutory procedure for transfer and transmission of securities and related delivery requirements, subject to dematerialisation and other applicable legal requirements.
Sections 57-58Covers consequences of personation and the rights and remedies connected with refusal by a company to register transfer or transmission of securities.
Sections 59-60Deals with rectification of the register of members and requirements when a company publishes statements of its authorised capital.
Sections 61-62Explains alteration of share capital and further issue of shares, including rights offers and other statutorily permitted routes.
Sections 63-64Section 63 regulates bonus issues; Section 64 requires notice to the Registrar for specified alterations of share capital.
Sections 65-66Covers reserve share capital on conversion of an unlimited company and the statutory process for reduction of share capital, including Tribunal confirmation where required.
Sections 67-68Section 67 restricts specified purchases and financial assistance involving a company's own shares. Section 68 sets out the statutory conditions for a company to buy back its own shares or other specified securities.
Sections 69-70Explains transfer to the capital redemption reserve where applicable and circumstances in which buy-back is prohibited.
Section 71Provides the principal statutory framework for issue of debentures, including convertible debentures, security and protection of debenture holders as applicable.
Section 72Permits a holder of securities to nominate a person to whom the securities or the holder's interest may vest on death, subject to the statutory framework.
Acceptance of Deposits by Companies: Sections 73 to 76A
These provisions regulate acceptance and repayment of deposits and prescribe consequences for non-compliance. The detailed operation of these sections should be read with the Companies (Acceptance of Deposits) Rules, 2014, as amended.
Section 73Sets the general restriction on acceptance of deposits from the public and provides the statutory route for acceptance of deposits from members subject to prescribed conditions and exemptions.
Sections 74-75Addresses repayment of deposits accepted before commencement of the 2013 Act and personal liability for loss or damage where deposits were accepted with intent to defraud.
Section 76Allows eligible public companies to accept deposits from persons other than members subject to statutory and prescribed safeguards.
Section 76APrescribes consequences where a company accepts, invites or allows deposits in contravention of Sections 73 or 76 or fails to repay deposits or interest within the prescribed time.
Registration of Charges: Sections 77 to 80
A "charge" is an interest or lien created on the property or assets of a company or any of its undertakings as security and includes a mortgage. Sections 77 to 80 deal with registration, creditor-initiated registration, modifications and deemed notice of registered charges.
Section 77Requires prescribed particulars of a charge created by a company on its property, assets or undertakings to be registered with the Registrar within the statutory time framework, subject to the Act and rules.
Sections 78-80Section 78 permits the person in whose favour a charge is created to seek registration if the company fails to do so. Section 79 extends Section 77 to specified acquisitions and modifications. Section 80 provides deemed notice of a charge from the date of registration.
Official Legal Resources
For filing, compliance or professional advice, verify the current statutory text, applicable rules, notifications, exemptions and MCA forms before acting. Amendments may affect the operation of an individual section even where the section heading remains unchanged.
