Section 2

(5) “articles” means the articles of association of a company as originally framed

or as altered from time to time or applied in pursuance of any previous company law or
of this Act;

(6) “associate company”, in relation to another company, means a company in

which that other company has a significant influence, but which is not a subsidiary
company of the company having such influence and includes a joint venture company.

Explanation.—For the purposes of this clause, “significant influence” means

control of at least twenty per cent. of total share capital, or of business decisions
under an agreement;

(8)“authorised capital” or “nominal capital” means such capital as is authorised

by the memorandum of a company to be the maximum amount of share capital of the
company;

(10) “Board of Directors” or “Board”, in relation to a company, means the

collective body of the directors of the company;
(11) “body corporate” or “corporation” includes a company incorporated outside
India, but does not include—
(i) a co-operative society registered under any law relating to co-operative
societies; and
(ii) any other body corporate (not being a company as defined in this Act),
which the Central Government may, by notification, specify in this behalf;
(12) “book and paper” and “book or paper” include books of account, deeds,
vouchers, writings, documents, minutes and registers maintained on paper or in
electronic form;
(13) “books of account” includes records maintained in respect of—
(i) all sums of money received and expended by a company and matters in
relation to which the receipts and expenditure take place;
(ii) all sales and purchases of goods and services by the company;
(iii) the assets and liabilities of the company; and
(iv) the items of cost as may be prescribed under section 148 in the case of
a company which belongs to any class of companies specified under that section;
(14) “branch office”, in relation to a company, means any establishment described
as such by the company;
(15) “called-up capital” means such part of the capital, which has been called for
payment;
(16) “charge” means an interest or lien created on the property or assets of a
company or any of its undertakings or both as security and includes a mortgage;

(20) “company” means a company incorporated under this Act or under any
previous company law;

(21) “company limited by guarantee” means a company having the liability of its
members limited by the memorandum to such amount as the members may respectively
undertake to contribute to the assets of the company in the event of its being wound
up;
(22) “company limited by shares” means a company having the liability of its
members limited by the memorandum to the amount, if any, unpaid on the shares
respectively held by them;

(24) “company secretary” or “secretary” means a company secretary as defined

in clause (c) of sub-section (1) of section 2 of the Company Secretaries Act, 1980 who
is appointed by a company to perform the functions of a company secretary under this
Act;
(25) “company secretary in practice” means a company secretary who is deemed
to be in practice under sub-section (2) of section 2 of the Company Secretaries
Act, 1980;

(27) “control” shall include the right to appoint majority of the directors or to
control the management or policy decisions exercisable by a person or persons acting
individually or in concert, directly or indirectly, including by virtue of their shareholding
or management rights or shareholders agreements or voting agreements or in any
other manner;

(35) “dividend” includes any interim dividend;

(36) “document” includes summons, notice, requisition, order, declaration, form

and register, whether issued, sent or kept in pursuance of this Act or under any other
law for the time being in force or otherwise, maintained on paper or in electronic form;

(40) “financial statement” in relation to a company, includes—

(i) a balance sheet as at the end of the financial year;
(ii) a profit and loss account, or in the case of a company carrying on any
activity not for profit, an income and expenditure account for the financial year;
(iii) cash flow statement for the financial year;
(iv) a statement of changes in equity, if applicable; and
(v) any explanatory note annexed to, or forming part of, any document
referred to in sub-clause (i) to sub-clause (iv):
Provided that the financial statement, with respect to One Person Company,
small company and dormant company, may not include the cash flow statement;

(42) “foreign company” means any company or body corporate incorporated

outside India which—
(a) has a place of business in India whether by itself or through an agent,
physically or through electronic mode; and
(b) conducts any business activity in India in any other manner.
2 of 1934.
6 THE GAZETTE OF INDIA EXTRAORDINARY [PART II—
(43) “free reserves” means such reserves which, as per the latest audited balance
sheet of a company, are available for distribution as dividend:
Provided that—
(i) any amount representing unrealised gains, notional gains or revaluation
of assets, whether shown as a reserve or otherwise, or
(ii) any change in carrying amount of an asset or of a liability recognised
in equity, including surplus in profit and loss account on measurement of the
asset or the liability at fair value,
shall not be treated as free reserves;
(44) “Global Depository Receipt” means any instrument in the form of a
depository receipt, by whatever name called, created by a foreign depository outside
India and authorised by a company making an issue of such depository receipts;
(45) “Government company” means any company in which not less than fiftyone
per cent. of the paid-up share capital is held by the Central Government, or by any
State Government or Governments, or partly by the Central Government and partly by
one or more State Governments, and includes a company which is a subsidiary company
of such a Government company;
(46) “holding company”, in relation to one or more other companies, means a
company of which such companies are subsidiary companies;
(47) “independent director” means an independent director referred to in
sub-section (5) of section 149;
(48) “Indian Depository Receipt” means any instrument in the form of a
depository receipt created by a domestic depository in India and authorised by a
company incorporated outside India making an issue of such depository receipts;
(49) “interested director” means a director who is in any way, whether by himself
or through any of his relatives or firm, body corporate or other association of individuals
in which he or any of his relatives is a partner, director or a member, interested in a
contract or arrangement, or proposed contract or arrangement, entered into or to be
entered into by or on behalf of a company;
(50) “issued capital” means such capital as the company issues from time to time
for subscription;
(51) “key managerial personnel”, in relation to a company, means—
(i) the Chief Executive Officer or the managing director or the manager;
(ii) the company secretary;
(iii) the whole-time director;
(iv) the Chief Financial Officer; and
(v) such other officer as may be prescribed;
(52) “listed company” means a company which has any of its securities listed on
any recognised stock exchange;
(53) “manager” means an individual who, subject to the superintendence, control
and direction of the Board of Directors, has the management of the whole, or
substantially the whole, of the affairs of a company, and includes a director or any
other person occupying the position of a manager, by whatever name called, whether
under a contract of service or not;
(54) “managing director” means a director who, by virtue of the articles of a
company or an agreement with the company or a resolution passed in its general
meeting, or by its Board of Directors, is entrusted with substantial powers of
management of the affairs of the company and includes a director occupying the
position of managing director, by whatever name called.
SEC. 1] THE GAZETTE OF INDIA EXTRAORDINARY 7
Explanation.—For the purposes of this clause, the power to do administrative
acts of a routine nature when so authorised by the Board such as the power to affix the
common seal of the company to any document or to draw and endorse any cheque on
the account of the company in any bank or to draw and endorse any negotiable
instrument or to sign any certificate of share or to direct registration of transfer of any
share, shall not be deemed to be included within the substantial powers of management;
(55) “member”, in relation to a company, means—
(i) the subscriber to the memorandum of the company who shall be deemed
to have agreed to become member of the company, and on its registration, shall
be entered as member in its register of members;
(ii) every other person who agrees in writing to become a member of the
company and whose name is entered in the register of members of the company;
(iii) every person holding shares of the company and whose name is
entered as a beneficial owner in the records of a depository;
(56) “memorandum” means the memorandum of association of a company as
originally framed or as altered from time to time in pursuance of any previous company
law or of this Act;
(57) “net worth” means the aggregate value of the paid-up share capital and all
reserves created out of the profits and securities premium account, after deducting the
aggregate value of the accumulated losses, deferred expenditure and miscellaneous
expenditure not written off, as per the audited balance sheet, but does not include
reserves created out of revaluation of assets, write-back of depreciation and
amalgamation;

(59) “officer” includes any director, manager or key managerial personnel or any
person in accordance with whose directions or instructions the Board of Directors or
any one or more of the directors is or are accustomed to act;

(63) "ordinary or special resolution" means an ordinary resolution, or as the

case may be, special resolution referred to in section 114;
(64) “paid-up share capital” or “share capital paid-up” means such aggregate
amount of money credited as paid-up as is equivalent to the amount received as paidup
in respect of shares issued and also includes any amount credited as paid-up in
respect of shares of the company, but does not include any other amount received in
respect of such shares, by whatever name called;
(65) “postal ballot” means voting by post or through any electronic mode;

(68) “private company” means a company having a minimum paid-up share

capital of one lakh rupees or such higher paid-up share capital as may be prescribed,
and which by its articles,—
(i) restricts the right to transfer its shares;
(ii) except in case of One Person Company, limits the number of its
members to two hundred:
Provided that where two or more persons hold one or more shares in a
company jointly, they shall, for the purposes of this clause, be treated as a single
member:
Provided further that—
(A) persons who are in the employment of the company; and
(B) persons who, having been formerly in the employment of the company,
were members of the company while in that employment and have continued to
be members after the employment ceased,
shall not be included in the number of members; and
(iii) prohibits any invitation to the public to subscribe for any securities of
the company;
(69) “promoter” means a person—
(a) who has been named as such in a prospectus or is identified by the
company in the annual return referred to in section 92; or
(b) who has control over the affairs of the company, directly or indirectly
whether as a shareholder, director or otherwise; or
(c) in accordance with whose advice, directions or instructions the
Board of Directors of the company is accustomed to act:
Provided that nothing in sub-clause (c) shall apply to a person who is acting
merely in a professional capacity;

(70) “prospectus” means any document described or issued as a prospectus

and includes a red herring prospectus referred to in section 32 or shelf prospectus
referred to in section 31 or any notice, circular, advertisement or other document
inviting offers from the public for the subscription or purchase of any securities of a
body corporate;

(71) “public company” means a company which—

(a) is not a private company;
(b) has a minimum paid-up share capital of five lakh rupees or such higher
paid-up capital, as may be prescribed:
Provided that a company which is a subsidiary of a company, not being a private
company, shall be deemed to be public company for the purposes of this Act even
where such subsidiary company continues to be a private company in its articles ;

(73) “recognised stock exchange” means a recognised stock exchange as defined

in clause (f) of section 2 of the Securities Contracts (Regulation) Act, 1956;
(74) “register of companies” means the register of companies maintained by the
Registrar on paper or in any electronic mode under this Act;
(75) “Registrar” means a Registrar, an Additional Registrar, a Joint Registrar, a
Deputy Registrar or an Assistant Registrar, having the duty of registering companies
and discharging various functions under this Act;

(76) “related party”, with reference to a company, means—

(i) a director or his relative;

(ii) a key managerial personnel or his relative;

(iii) a firm, in which a director, manager or his relative is a partner;
(iv) a private company in which a director or manager is a member or
director;
(v) a public company in which a director or manager is a director or holds
along with his relatives, more than two per cent. of its paid-up share capital;
(vi) any body corporate whose Board of Directors, managing director or manager is
accustomed to act in accordance with the advice, directions or
instructions of a director or manager;
(vii) any person on whose advice, directions or instructions a director or manager is
accustomed to act: Provided that nothing in sub-clauses (vi) and (vii) shall apply to the
advice, directions or instructions given in a professional capacity;
(viii) any company which is—
(A) a holding, subsidiary or an associate company of such company; or
(B) a subsidiary of a holding company to which it is also a subsidiary;
(ix) such other person as may be prescribed;

(78) “remuneration” means any money or its equivalent given or passed to any person for
services rendered by him and includes perquisites as defined under the
Income-tax Act, 1961;

(84) “share” means a share in the share capital of a company and includes stock;

(87) “subsidiary company” or “subsidiary”, in relation to any other company (that is to say
the holding company), means a company in which the holding company—
(i) controls the composition of the Board of Directors; or
(ii) exercises or controls more than one-half of the total share capital either at its own or
together with one or more of its subsidiary companies: Provided that such class or classes of
holding companies as may be prescribed
shall not have layers of subsidiaries beyond such numbers as may be prescribed.
Explanation.—For the purposes of this clause,—
(a) a company shall be deemed to be a subsidiary company of the holdingccompany even if
the control referred to incsub-clause (i) or sub-clause (ii) is of another subsidiary company of
the holding company;
(b) the composition of a company’s Board of Directors shall be deemed to be controlled by
another company if that other company by exercise of some power exercisable by it at its
discretion can appoint or remove all or a majority of the directors;
(c) the expression “company” includes any body corporate;
(d) “layer” in relation to a holding company means its subsidiary or subsidiaries;
(92) “unlimited company” means a company not having any limit on the liability
of its members;