(a) As per section 50 of the Companies Act, 2013, (the Act) a company may, if
so authorized by its Articles, accept 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.
As per section 51 of the Act, a company may, if so authorized by its
Articles, pay dividends in proportion to the amount paid-up on each
share. The Board of Directors of a company may decide to pay dividends
on pro-rata basis if all the equity shares of the company are not equally
paid-up.
Interest can be paid on such advance, if permitted by Articles. Here it is
worth noting that, where the rate of interest is permitted by the Articles
on such advance payment, same could be varied by shareholders in
general meeting.
Further, section 49 of the Act, specifies that calls shall be made on a
uniform basis on all shares that are falling under the same class. A
shareholder on whom a regular call for payment has been served may
choose to pay only a part of the sum due.
Hence, in the light of the stated provisions, SAB Health Products Limited
is permitted to do the following acts:
Is Mr. GH’s claim justified?
Mr. GH is entitled to claim interest on money advanced by him and also
dividend in proportion to the amount paid-up on each share, if so
authorized by the Articles of the company.
In the matter of Mr. LK
Whereas, with respect to Mr. LK, calls shall be made on a uniform basis by
the directors, on all shares that are falling under the same class as per
section 49 of the Act. A call cannot be made on some of the members
only, unless they constitute a separate class of shareholders.
Therefore, the action of the Board of Directors of SAB Health Products
Limited towards Mr. LK for calling to pay the entire amount due by him in
respect of the shares held by Mr. LK is invalid and not permissible.
(b) (i) Voluntary Revision of Financial Statements or Board’s Report on
the Approval of the Tribunal
As per section 131 of the Companies Act, 2013, if it appears to the
directors of a company that:
a.
the financial statement of the company does not comply with the
provisions of section 129; or
b.
the report of the Board does not comply with the provisions of
section 134
they may prepare revised financial statement or board’s report in
respect of any of the 3 preceding financial years after obtaining the
approval of the Tribunal on an application made by the company
within fourteen days of the decision taken by the Board.
A certified copy of the order of the Tribunal shall be filed with the
Registrar of Companies within 30 days of the date of receipt of the
certified copy.
CORPORATE AND OTHER LAWS
In the given question, Mr. C has advised the Board of Right Trading
Limited to revise the financial statements for the year 2021-22. The
Board of Directors can do so as the said financial statements are
pertaining to not later than three preceding financial years (from
2024- 2025) and by obtaining the approval of the Tribunal within
fourteen days of the decision taken by the Board.
(ii) As per section 139(2) of the Companies Act, 2013, listed companies and
such class of companies as prescribed, shall not appoint or re- appoint
an audit firm as auditor for more than two terms of five consecutive
years.
Further, on the date of appointment, an audit firm shall not have any
partner or partners who are/were also the partner/s to the other audit
firm, whose tenure has been expired in a company immediately
preceding the financial year.
It means, if a partner (common partner), who is in charge of an audit
firm and also certifies the financial statements of the company, retires
from the said firm and joins another firm of Chartered Accountants, such
other firm shall also be ineligible to be appointed as succeeding auditor
of same company after two terms of five consecutive years. i.e. cooling
period. [**Rule 6(3)** of Companies (Audit and Auditors) Rules, 2014]
The audit of Right Trading Limited was conducted by M/s DEF and
after expiry of two consecutive terms, it is proposed to appoint
M/s XYZ. Mr. F is the common partner in M/s DEF and M/s XYZ,
hence, the appointment of M/s XYZ is not valid.
Assumption: In this question, nothing is specified about the nature of
the company. Hence, drawing a positive assumption that Right
Trading Limited is a company on which the provisions related to
rotation of auditors [as specified under section 139(2)], are applicable.
(c) (i) Can Ms. Rose purchase the house in USA and continue to retain it
even after returning to India?
According to section 6(4) of the Foreign Exchange Management Act,
1999, (the Act) a person resident in India may hold, own, transfer or
invest in foreign currency, foreign security or any immovable property
situated outside India if such currency, security or property was
acquired, held or owned by such person when he was resident
outside India or inherited from a person who was resident outside
India.
Ms. Rose stayed in USA for 12 years, hence she must have become a
non–resident for those years. She purchased a house during this time.
As per the above provisions, Ms. Rose can rightfully purchase the
house in USA and continue to retain it after returning to India.
(ii) Can Ms. Rose purchase another house in USA after returning to
India?
Ms. Rose deposited the amount of rent from the house to her
account in USA. Out of that amount she purchased another house in
USA after returning to India. Ms. Rose is a person resident in India
due to joining an employment in India.
As per section 6(4)(iv) of the Foreign Exchange Management Act,
1999 (FEMA), a person resident in India may freely utilize all their
eligible assets abroad as well as income on such assets or sale
proceeds thereof received after their return to India for making any
payments or to make any fresh investments abroad without approval
of Reserve Bank, provided the cost of such investments and/or any
subsequent payments received therefor are met exclusively out of
funds forming part of eligible assets held by her and the transactions
is not in contravention to extant FEMA provisions.
In view of the above, Ms. Rose can rightfully purchase another house
in USA after returning to India.