Section 201 of Companies Act, 2013 – Forms of, and procedure in relation to, certain applications

Section 201. FORMS OF, AND PROCEDURE IN RELATION TO, CERTAIN APPLICATIONS

[Effective from 1st April, 2014]

(1) Every application made to the Central Government under [1] shall be in such form as may be prescribed.

(2) (a) Before any application is made by a company to the Central Government under [2] , there shall be issued by or on behalf of the company a general notice to the members thereof, indicating the nature of the application proposed to be made.

(b) Such notice shall be published at least once in a newspaper in the principal language of the district in which the registered office of the company is situate and circulating in that district, and at least once in English in an English newspaper circulating in that district.

(c) The copies of the notices, together with a certificate by the company as to the due publication thereof, shall be attached to the application.

Applicable Rules

Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014

[Effective from 1st April, 2014]

Rule 7. Fees.—(1) Every application made to the Central Government under the provisions of Chapter XIII shall be made in Form No. MR.2 and shall be accompanied by fee as may be specified for the purpose.

[3] [***]

(i) payment of remuneration is approved by a resolution passed by the Board and, in the case of a company covered under sub-section (1) of section 178 also by the Nomination and Remuneration Committee, if any, and while doing so record in writing the clear reason and justification for payment of remuneration beyond the said limit;

(ii) the company has not made any default in repayment of any of its debts (including public deposits) or debentures or interest payable thereon preference shares and dividend on preference shares for a continuous period of thirty days in the preceding financial year before the date of payment to such managerial personnel;

(iii) the approval of shareholders by way of a special resolution at a general meeting of the company for payment of remuneration for a period not exceeding three years;

(iv) a statement along-with a notice calling the general meeting referred to clause (iii) of sub-rule (2) above, shall contain the information as per sub clause (iv) of second proviso to clause (B) of section II of part-II of Schedule V of the Act including reasons and justification for payment of remuneration beyond the said limit;

(v) the company has filed Balance Sheet and Annual Return which are due to be filed with the Registrar of Companies.

(3) Every such application seeking approval shall be made to the Central Government within a period of ninety days from the date of such appointment.

 

[1] Substituted for the words “this Chapter” by the Companies (Amendment) Act, 2017 notified vide notification no. File no. 1/5/2013 Part -I-CL-V dated 12th September, 2018.

[2] Substituted for the words”any of the sections aforesaid” by the Companies (Amendment) Act, 2017 notified vide notification no. File no. 1/5/2013 Part -I-CL-V dated 12th September, 2018.

[3] Omitted by the Companies (Appointment and Remuneration of Managerial Personnel) Amendment Rules, 2018 vide Notification No. F. No. 1/5/2013 CL-V dated 12th September, 2018. Prior to omission it read as under:

“(2) The companies other than listed companies and subsidiary of a listed company may without Central Government approval pay remuneration to its managerial personnel, in the event of no profit or inadequate profit beyond ceiling specified in Section II, Part II of Schedule V, subject to complying with the following conditions namely: —”