Friday, December 19, 2014

IIFCL(India Infrastructure Finance Company Limited) and Companies Act 2013

Ques.16. What is IIFCL and new provision of the Companies Act?

Ans. IIFCL stands for India Infrastructure Finance Company Limited. It was incorporated in 2006 under the Companies Act in the month of January. In April 2006, IIFCL started its operations. It is a wholly Government owned company which has been entrusted with the task of financing viable infrastructure projects. It is also known by the name of SIFTI. The sectors which are eligible for getting finance from IIFCL are – energy, water, sanitation, communication, transportation, social and commercial infrastructure. IIFCL while lending gives priority to projects which are started on the basis of Public Private Partnership

New Provision of the 2013 Companies Act –

1. It has mentioned three types of companies for the first time – One person company, Private Limited and Public Limited Company

2. One person company and private limited company to have a minimum capital of Rs 1 lakh and public limited company to have minimum capital of 5 lakhs. Public Ltd is further divided into listed and unlisted companies.

3. 2 to 200 members in a private ltd. Company and 7 to unlimited number of members in public limited company.

4. No. of directors to be 1, 2 and 3 for one person company, private ltd and public ltd. Company. There can be a maximum of 15 directors in a company of which at least one must be an Indian resident who stays in India for more than 182 days or more in an year. At least one women director should also be present on the board.

5. Public and Private Ltd. Companies should annually conduct their AGM (Annual general meeting of shareholders). Electronic and proxy voting is permitted for the shareholders.

6. At least 4 meetings of Board of Director should be held every year for private and public ltd. Companies and there should not be a gap of more than 120 days between 2 meetings Video conference facility is available for directors in case they are not present physically.

7. Below committees should be made by all companies by selecting from board members –

(a) Audit Committee (b) Stockholder Relationship Committee (c) CSR Committee (d) Nomination and Remuneration Committee

8. Four new statutory bodies would be created under companies Act 2013 –

(a) National Company Law Tribunal 
(b) National Financial Reporting Authority 
(c) Investor and Education Protection Fund.
(d) Serious Fraud Investigation office.

The first one is for litigation, second for accounting norms, third for awareness generation and fourth for fraud detection.

9. All Companies having net profit of Rs 5 crores before tax, net worth of Rs 500 crores and turnovers of Rs 1000 crores will have to spend 2% of their previous three years average profit amount on Corporate Social Responsibility activities.

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