Page 128 - DCOM106_COMPANY_LAW

Unit 9: Share and Share Capital

He can apply to the CLB to call AGM if default is made in calling the same by a company Notes
(s.167).
A corporate body, being member of a company, can appoint a representative to attend
general meeting of the company (s.187).
He has a right to inspect minutes of general meetings and ask for extracts therefrom
(s.196).
He is entitled to receive fully paid-up bonus shares as and when issued (s.205).
A shareholder, also being a director, can inspect books of account of the company during
business hours (s.209).
He is entitled to have copies of account and auditor’s report or statement of salient features
(s.219).

Two hundred shareholders or shareholders having one-tenth voting power may ask the
Central Government for investigation of the affairs of the company (s.235).
He can send a notice to the company signifying his candidature or that of any other person
to the office of director to be elected at the AGM (s.257).
He can give a special notice of a resolution for removal of a director (s.284).
Shareholders having substantial holding can present the case to CLB for removal of any
incompetent managerial personnel. The Central Government has the power to remove
managerial personnel on recommendation of the CLB (s.388).

He can apply to the CLB for relief in case of oppression or mismanagement of the affairs
of the company (s.397 and s. 398).
He can complain for the non-compliance of any of the provisions of the Companies Act,
1956, to the registrar and CLB.

9.2.7 Cumulative Convertible Preference Shares (CCPS)

The Government vide its guidelines dated 19th August, 1985 permitted issue of another class of
shares by public limited companies, called cumulative convertible preference shares.

The guidelines issued by the Ministry of Finance in this regard are as follows:
1. Applicability: The guidelines will apply to the issue of CCPS by public limited companies
which propose to raise finance.

2. Objects of the Issue: The objects of the issue of the above instrument should be for any of
the following purposes: (a) Setting-up of new projects; (b) Expansion or diversification of
existing projects; (c) Normal capital expenditure for modernisation; and (d) Working
capital requirements.

3. Quantum of Issue: The amount of CCPS cannot exceed the equity shares offered to the
public for subscription. However, in case of projects assisted by financial institutions, the
quantum of issue would be approved by the financial institutions/banks.

4. Terms of Issue: Following are the terms of issue of CCPS:
(i) CCPSs would be deemed to be equity issue for the purpose of calculation of debt
equity ratio as may be applicable.

(ii) The entire issue of CCPSs would be convertible into equity shares between the end
of 3 years and 5 years as may be decided by the company and approved by SEBI.

LOVELY PROFESSIONAL UNIVERSITY 123