Appendix 26

THE REFERENCES IN THE ACT FOR MATTERS TO BE PROVIDED IN THE ARTICLES

1. In case of a private company Articles must prescribe the following restrictions, limitations and prohibitions:

(i) restriction on the right to transfer shares;

(ii) limitation on the number of its members to fifty;

(iii) prohibition to any invitation to the public for subscription for any shares in or debentures of the company.

Section 50 ‑ Fascimile of Common Seal for use outside India.

2. Articles may authorise a company whose objects require or comprise the transaction of business outside India to have for use in territory not situated in India, a fascimile of the Common Seal of the Company with addition on its face the name of the territory or the place concerned.

Section 76: Payment of Certain Commissions and DB counts.

3. In case of public companies, Articles may authorise payment of commission by a company to any person in consideration of (a) his subscribing or agreeing to subscribe, whether absolutely or conditionally, for any shares in or debentures of the company, or (b) his promising or agreeing to procure subscriptions, whether absolute or conditional for any shares in or debentures of the company subject to other provisions of this section.

Section 77A : Power of Company to purchase its own Shares.

3A. A company may purchase its own shares or other specified securities only if it is authorised by its Articles of Association.

Section 80: Issue of Redeemable Preference Shares.

4. Articles may authorise a company limited by shares to issue redeemable preference shares and subject to the provision of section 80, provide for the terms and manner in which redemption is to be effected.

Section 81(1)(c) : Further Issue of Shares.

5. In case of public companies, unless the Articles of the company provide otherwise, the offer of further issue of shares as provided for in section 81 shall be deemed to include a right exercisable by the person concerned to renounce the shares offered to him or to any of them in favouf of any other person; and the notice making the offer shall contain a statement of this right.

Section 82: Nature of Shares.

6. Articles of a company may provide for the manner in which transfer of the shares or other interest of any member in a company shall be effected.

Section 92 : Acceptance of Unpaid Share Capital in advance.

7. A company may be authorised by its Articles to accept in advance from any member, the whole or a part of the amount remaining unpaid on any shares held by him although no part of that amount has been called up.

Section 93: Dividends in proportion to amount paid‑up.

8. Articles of a company may authorise the payment of dividends in proportion to the amount paid‑up on each share where a larger amount is paid‑up on some shares than on others.

Section 94: Authorisation to Limited Company to alter conditions of Memorandum.

9. Articles may authorise a limited company having a share capital to alter the conditions of its Memorandum as follows:

(a) Increase its share capital by such amount as the company thinks expedient by issuing new shares.

(b) Consolidate and divide all or any of its share capital into shares of larger amount than its existing shares.

(c) Convert all or any of its fully paid‑up shares into stock and reconvert that stock into fully paid‑up shares of any denomination.

(d) Sub‑divide its shares or any of them, into shares of smaller amount than is fixed by the Memorandum, so, however, that in the sub‑division between the amount paid and the amount, if any, unpaid on each reduced share shall be the same as it was in the case of shares from which the reduced share is derived.

(e) Cancel shares which at the date of the passing of the resolution in that behalf have not been taken or agreed to be taken by any person, and diminish the amount of its share capital by the amount of the shares so cancelled.

Section 100 : Reduction of Share Capital.

10. Articles may authorise a company limited by shares or a company limited by guarantee and having a share capital to reduce its share capital in any way by special resolution and subject to confirmation by the court, and in particular to:

(a) extinguish or reduce the liability on any of its shares in respect of share capital not paid‑up;

(b) either with or without extinguishing or reducing liability on any of its shares cancel paid‑up share capital which is lost, or is unrepresented by available assets; or

(c) either with or without extinguishing or reducing liability on any of its shares, pay off any paid‑up share capital which is in excess of the wants of the company.

Section 106 : Variation of Share holders' rights.

11. Articles of Association may provide for variation of rights attached to a particular class of shares by special resolution of the company and with the consent of not less than three‑fourths of such share holders in writing.

Section 111: Refusal of registration and appeal against it.

12. Articles of a company may provide for refusal to register the transfer of or transmission by operation of law of the right to any shares or interest of a member in, or debentures of the company and for sending notice of refusal giving the reasons to the transferor and transferee within two months from the date of which the instrument of transfer or the intimation of transmission, as the case may be, was delivered.

Sections 114 & 115 : Share warrants.

13. The Articles of Association may authorise to issue a public company limited by shares, with the previous approval of the Central Government with respect of any fully paid‑up shares, a warrant stating that the bearer of the warrant is entitled to the shares specified therein and may provide by coupons or otherwise, for the payment of the future dividends on the shares specified in the warrant and may provide conditions for registering membership.

Section 121 : Re‑issue of Redeemed debentures.

14. Unless any provision is made to the contrary in the Articles, whether either before or after the commencement cf the Act, a company has redeemed any debentures previously issued, it shall have the right to keep the debentures alive for the purposes of re‑issue.

Section 157: Foreign register of members of debenture‑holders.

15. Articles of a company which has a share capital or which has issued debentures may authorise it to keep, in any State or Country outside India, a branch Register of Members or debentureholders resident in that State or Country.

Section 158: Foreign Registers.

16. Subject to the provisions of the Act, a company may, by its Articles make such regulations as it thinks fit in regard to its foreign register.

Section 170: Sections 171 to 186 not to apply to meetings.

17. The Articles of a private company which is not a subsidiary of a public company may provide that the provisions of sections 171 to 186 in respect of meetings do not apply to it.

18. Unless the Articles of a company provide otherwise, sections 171 to 175 and sections 177 to 186 with such adaptations and modifications, if any, as may be prescribed, shall apply with respect to meeting of any class of members, or of debenture‑holders or any class of debenture‑holders of a company in like manner as they apply with respect to General Meeting of the company.

Section 171 : Length of notice for calling meeting.

19. For calling meeting, 21 days' notice in writing is necessary; but it may be less if consented to unanimously by all members for the Annual General Meeting and by 95% for any other General Meeting. The Articles of a private company may provide otherwise.

Section 172: Contents and manner of Service of Notice of Meeting.

20. Notice of a meeting shall specify the place, day and hour of meeting and statement of business to be transacted. In case of a private company, Articles may provide otherwise.

Section 173: Explanatory Statement to be annexed to Notice.

21. Expllinatory Statement is to be attached to notice regarding any business deemed to be special. In case of a private company, Articles may provide otherwise.

Section 174: Quorum for meeting.

22. Articles may provide for a larger quorum than 5 members personally present in case of a public company and 2 in case of a private company as required by the Act.

Articles may also provide otherwise than as follows:

(a) The meeting if called upon requisition by members shall stand dissolved if quorum is not completed in half an hour from the appointed time of meeting;

(b) It shall stand adjourned to the same day, place and hour in next week or as the Board may determine;

(c) If at the adjourned meeting, quorum is not completed in half an hour those present constitute the quorum.

Section 175: Chairman of Meeting.

23. Unless Articles provide otherwise, members present at a meeting shall elect Chairman by show of hands.

Section 176 : Proxies.

24. Proxies may be appointed with right to vote but not to speak. Unless Articles provide otherwise, (a) the rule of proxy as above does not apply to a company not having a share capital; (b) a member of a private company shall not be entitled to appoint more than one proxy to attend on the same occasion; and (c) a proxy shall not be entitled to vote except on a poll. Only forty‑eight hours period is to be required for depositing of instrument of proxy etc. by a public company being subsidiary thereof.

Section 177: Voting by show of hands.

25. Voting to be by show of hands unless a poll is demanded. In case of a private company, Articles may provide otherwise.

Section 178 : Chairman's Declaration of result.

26. Chairman's declaration of result of voting by show of hands will be conclusive. In case of a private company, Articles may provide otherwise.

Section 179: Demand for Poll.

27. Poll may be held before or after the decision by show of hands at the instance of Chairman and shall be held if a demand in that behalf is made by the person or persons specified below:

(a) in the case of a public company having a share capital by any member or members present in person or by proxy and holding shares in the company:

(i) which confer a power to vote on the resolution not being less than one‑tenth of the total voting power in respect of the resolution, or

(ii) on which an aggregate sum of not less than fifty thousand rupees has been paid‑up;

(b) in the case of a private company having a share capital, by one member having the right to vote on the resolution and present in person or by proxy if not more than seven such members are personally present, and by two such members present in person or by proxy, if more than seven such members are personally present;

(c) in the case of any other company, by any member or members present in person or by proxy and having not less than one‑tenth of the total voting power in respect of the resolution.

Articles of a private company may provide otherwise.

Section 180 : Time of taking Poll.

28. A poll on question of adjournment of meeting is to be taken forthwith and on any other question excepting the election of the Chairman is to be taken not later than forty‑eight hours. In cast of a private company, Articles may provide otherwise.

Section 181 : Restriction on voting Rights of members who have not paid calls.

29. The Articles of a company may provide that no member shall exercise any voting right in respect of any shares registered in his name on which any calls or other sum presently payable by him have not been paid or in regard to which the company has, and has exercised, any right of lien.

Section 182 : Restriction on exercise of voting Rights in other cam.

30. Restriction on exercise of voting right in cases other than the above, is void. In case of a private company, Articles may provide otherwise.

Section 183 : Right of member to use votes differently.

31. In a poll, a member having more dian one vote need not use all his votes in the same way. In case of a private company. Articles may provide otherwise.

Section 184 : Scrutineers of Poll.

32. The Chairman is to appoint, and has power of removal of two scrutinisers for a poll, one being a member. In case of a private company, Articles may provide otherwise.

Section 185 : Manner and Re‑suit of Poll.

33. Chairman shall regulate the manner of poll, and the result thereof shall be the decision of the meeting. Articles of a private company may provide otherwise.

Section 186 : Power of CLB to order meeting to be called.

34. The Company Law Board has power to order a General Meeting other than the Annual General Meeting to be called. Articles of a private company may provide otherwise.

Section 208 : Payment of Interest out of Capital.

35. Articles may authorise payment of interest out of capital in certain cases.

Section 254: Subscribers of Memorandum deemed to be dhwtors.

36. In default of any regulation in the Articles, subscribers to the Memorandum who are individuals shall be deemed directors of a company till appointments are made under section 255.

Section 255: Appointment of Directors and Proportion of thole who are to retire by rotation.

37. Unless the Articles provide for the retirement of all directors at every Annual General Meeting not less than 2/3rd of the total number of directors of a public company or a private company being subsidiary thereof shall be persons whose office is liable to determination by retirement by rotation and shall be appointed by the company at its General Meeting.

Section 258 : Increase or deduction in the number of Directors.

38. Within the limits fixed by Articles, a company may, by ordinary resolution in General Meeting, increase or reduce the number of directors.

Section 260 : Additional Directors.

39. Articles may authorise the Board to appoint additional directors holding office till the next Annual General Meeting and not exceeding the total fixed by the Articles for the Board.

Section 262 : Fffling of casual vacancy among Directors.

40. The Board of a public company or a private company being subsidiary thereof may at its meeting, fill in casual vacancy in the Board in default of any regulation in the Articles.

Section 265 : Proportional representation for appointment of Directors.

41. Articles of a company may provide for proportional representation of directors.

Section 270: Share Qualification.

42. Articles may require directors to hold share qualification.

Section 274 : Disqualifications of Directors.

43. Articles of a private company may add additional disqualification than those specified in section 274 for the office of directorship.

Section 293(3) : Vacation of office by Directors.

44. A private company, not being a subsidiary of a public company may, by its Articles provide that the office of director shall be vacated on any grounds in addition to those specified in this section.

Section 288 : Meeting adjourned for want of quorum.

45. Articles may provide otherwise for reassembly of adjourned meeting of a Board for want of quorum than provided by section 288.

Section 309 : Remuneration of Directors.

46. The remuneration payable to directors shall be determined by Articles, or resolution of the company or special resolution of the company if the Articles require.

Section 313 : Appointment of alternate Directors.

47. The Board, if authorised by the Articles, may appoint alternate directors.

Section 323 : Rendering the liability of Directors unlimited.

48. A limited company, if so authorised by its Articles, may by a special resolution alter its Memorandum so as to render the liability of its directors or manager unlimited with their consent.