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CA Inter Corporate Laws Marathon 🔥 | Law Super Revision Marathon (Part-2) | CA Intermediate

CA Intermediate by PW・2 minutes read

Kunal Madhaniya Yer conducts a Corporate Law Marathon for CA students, covering topics like auditor disqualifications, appointments, and CSR regulations, emphasizing the importance of comprehensive revision and hard work for success. Students are advised to watch live or recorded sessions patiently to benefit from detailed notes and preparation for CA exams.

Insights

The Corporate Law Marathon on the CA Intermediate channel offers a comprehensive revision of topics like audit, accounts, management, and dividends, with a focus on recent exam questions and ICI MCQs.
Detailed disqualification criteria for auditors include restrictions on holding securities, full-time employment, personal relationships, and disqualifying factors for group companies and LLPs.
The appointment and removal of auditors are outlined, covering the first auditor, subsequent auditor, casual vacancy, and specific rules for rotation in different types of companies.
Reporting requirements for auditors include fraud reporting, duty to inquire, signing audit reports, and attending general meetings, with penalties for non-compliance and specific guidelines for modifications.
CSR obligations, cost audits, branch audits, and financial statement requirements are discussed, emphasizing the importance of compliance with specific regulations, penalties for non-compliance, and the handling of unspent CSR funds.

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Recent questions

What is the Corporate Law Marathon about?
It is a revision session for CA students.
What are the disqualification criteria for auditors?
Disqualification factors include holding securities and business relationships.
How are auditors appointed and removed?
Auditors are appointed by the Board of Directors and can be removed with Central Government permission.
What are the requirements for CSR activities?
Companies must spend a certain percentage of profits on CSR activities.
What are the obligations for maintaining financial records?
Companies must maintain physical or electronic records and adhere to specific financial year timelines.

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Summary

00:00

"Corporate Law Marathon for CA Students"

Kunal Madhaniya Yer is the faculty for CA Foundation Law, CA Inter Law, and CA Inter Law, welcoming students to the Corporate Law Marathon on the CA Intermediate channel off PW.
The Corporate Law Marathon includes recent exam questions, current MTP RTP questions, and ICI MCQs for revision.
The marathon is divided into two parts, with Lecture number one focusing on corporate law, followed by Lecture number two the next day.
Students are encouraged to watch the live or recorded sessions patiently for a beneficial experience.
Amazing notes for revision will be available in the description for students watching live or recorded sessions.
The marathon schedule includes topics like audit and auditors, accounts of the company, corporate law outside India, management and administration, and dividends.
The Corporate Law Marathon is divided into two parts to facilitate comprehensive revision of all topics.
Qualifications for auditors are detailed, including the requirement of CA plus COP for audit appointments.
Disqualification criteria for auditors are outlined, with a mnemonic provided for easy memorization.
Group of companies disqualification factors include guarantees exceeding ₹5 lakh, full-time employment, and personal relationships within the company.

16:20

Auditor Disqualification Rules in Companies Act

Full-time employees in a company cannot audit that company.
CA partners have a limit of 20 audits, which can be affected if a partner is a full-time employee.
If a partner works full-time in a company, the CA firm may lose audit opportunities.
Holding securities in a company can disqualify an individual, with a limit of up to ₹1 lakh.
If a relative holds securities worth more than ₹1 lakh, disqualification occurs.
Employees holding securities can also lead to disqualification.
Relatives who are directors or managerial persons in a company disqualify auditors.
Business relationships with a company can lead to disqualification.
Providing certain restricted services under Section 144 of the Companies Act can disqualify auditors.
Disqualification rules apply to group companies, with specific regulations for LLPs and amounts exceeding ₹1 lakh.

32:44

Auditor Appointment Rules for Companies in India

The law applies to both the holding company and its subsidiaries, considering them as associate companies.
Disqualification occurs for companies and their subsidiaries if services are provided indirectly through relatives.
The maximum limit for a CA to audit is 20 companies, with specific rules for different types of companies.
Exceptions exist for auditing dormant companies, private companies with specific share capital, and small companies.
Public companies fall within the 20-audit limit for CAs, with exceptions for certain cases.
Disqualifications for auditors include offenses like fraud and specific financial thresholds.
The appointment of auditors involves three main cases: first auditor, subsequent auditor, and casual vacancy.
The first auditor is appointed by the Board of Directors within 30 days of incorporation.
Government companies appoint auditors, including the Controller and Auditor General of India, within 60 days.
Subsequent auditors are appointed at General Meetings or Annual General Meetings, following specific procedures.

49:53

Auditor Rotation Rules in Corporate Sector

Appoint Quant Auditor as per Section 139 Subsection 1 for the first appointment.
Remember the rotation of auditors in government and other companies as per Section 139 Subsection 2.
The rotation of auditors in government companies is not applicable.
The subsequent auditor in government companies is appointed every six AGMs.
In case of casual vacancy, the Board of Directors must fill it within 30 days.
The resignation of an auditor must be informed to the Company, ROC, and CAG within 30 days.
Section 139 Subsection 10 prohibits reappointment of an auditor if a new auditor is appointed.
Rotation of auditors is applicable in public and listed companies based on specific criteria.
In private companies, rotation is optional with a paid-up share capital of either 10 crores or 50 crores.
Individual auditors can serve a maximum of one term in proprietor firms and two terms in partnership firms or LLPs before a cooling period.

01:15:53

Auditor Appointment and Removal Regulations Summary

Appointment should not be common, and the firm should not belong to the same network.
The cooling period should be considered for appointments within the same network firm.
Partners can be rotated within the same network firm.
The appointment should adhere to the Company Act and CA Act regulations.
Removal of an auditor should follow a three-step process.
Permission from the Central Government is required for removal of an auditor.
Section 140 Subsection 4 outlines the appointment and removal of auditors.
The tribunal can remove an auditor if fraudulent activities are detected.
A complaint under section 140 F should be filed with the Tribunal for unlawful auditor actions.
Section 145 mandates that only qualified partners can sign the audit report.

01:37:41

Child's Duty to Sign Audit Report

Section 145 discusses the duty of a child to sign an audit report for a firm that has been audited.
Children can sign the report even if there are employees in the firm who have CA qualifications, but if there is no partner, they cannot sign.
General points regarding auditor reports modifications are discussed, with the question not arising in shareholder meetings.
The duty to sign and attend general meetings is outlined in Section 146, with the auditor having the right to attend and the duty to do so.
Specific details about penalties under Section 147 are highlighted, with a focus on minimum and maximum penalties and the Officer in Default's responsibility.
The importance of complying with provisions and the penalties for non-compliance are emphasized, with specific penalties mentioned for different scenarios.
Section 143 details the duty to inquire and report, with mnemonic devices provided to remember key points.
The duty to inquire about various aspects of a company, such as loans, investments, and personal expenses, is outlined.
The principle of assertion and the audit of a company are discussed, with specific points to report on and the importance of compliance.
Reporting fraud in a company, including reporting to the Central Government for fraud amounts exceeding a certain threshold, is detailed in Section 143 subsection 12.

02:06:35

"Essential Audits: Branch, Cost, Fraud, CSR"

Audits are crucial, especially branch audits and cost audits for children.
NTT entities with branches must undergo compulsory audits.
Branch audits are mandatory if the company has branches, to be conducted by either the company's auditor or a qualified individual under Section 141 Subsection 11A2.
Fraud reporting is essential, applicable to cost auditors and other auditors, with any identified fraud to be reported to the Central Government.
Foreign branches may also require auditing by the company's auditor or as per the country's regulations.
Cost audits must be completed within 180 days after the financial year ends, with the cost audit report submitted within the same timeframe.
Cost audit reports must be corrected within 30 days if errors are identified, with explanations provided to the Central Government.
Maintaining cost records is compulsory for companies dealing in regulated or unregulated products, with a turnover of at least 35 crores.
CSR is mandatory for companies meeting specific turnover, net worth, and profit criteria, requiring the formation of a CSR committee and spending on CSR activities.
CSR spending should amount to 2% of the average net profit of the last three years, with adjustments allowed for excess amounts over three years.

02:25:07

CSR Regulations for Companies in India

Expenses for CSR activities will not come from CSR activities.
Spending on political parties is not considered a CSR activity.
Spending within India or outside India can be considered CSR activities.
CSR activities must be applicable to companies with a net worth of at least Rs 500 crores.
Unspent CSR funds must be deposited within 6 months of the year-end.
Projects lasting over a year but up to a certain limit are considered ongoing projects.
Unspent CSR funds must be deposited within 30 days of the year-end.
Administrative overhead for CSR activities should not exceed 5%.
Surplus from CSR activities does not form part of business profits.
Books of accounts must be maintained physically or electronically, and can be shifted with proper procedures.

02:42:26

"Company Accounts: Subsidiaries, Financial Statements, Inspections"

Subsidiary companies are discussed, emphasizing the need to check subsidiary books if holding company wants to inspect accounts.
Board resolution by holding company's children is required to inspect subsidiary's books of account.
Members can inspect books of accounts if mentioned in the articles of association or if board resolution is passed.
Financial year commences on April 1st and ends on March 31st, with specific requirements for companies using accounting software.
Cash flow statement is not required for dormant companies, small companies, OPCs, or private companies.
Companies incorporated between January to March have financial year ending on next March 31st.
Consolidated financial statements are required for unlisted companies, based on certain conditions.
Cash flow statement preparation is mandatory for certain companies, including Sankul Pvt Ltd.
Sankul Pvt Ltd is not a small company due to its status as a subsidiary of a public company.
Unlisted companies are obligated to prepare periodic financial statements under Section 129A, with specific requirements for filing and review.

03:01:58

SEBI Reopens Accounts Due to Mismanagement

Accounts can be reopened from only two regions due to mismanagement.
Mismanagement can lead to reopening of accounts either through court or tribunal.
Only the last 8 years of accounts can be reopened.
SEBI found irregularities in Adani Enterprise Limited's financial statements.
SEBI seeks advice from an expert for reopening financial statements.
SEBI can apply to the tribunal for reopening financial statements.
Applications for revision in accounts and board reports can be made to the tribunal.
Revision in accounts and board reports can be done once a year for the last three financial years.
NAFRA recommends to the Central Government on accounting standards and auditing standards.
NAFRA monitors listed companies with turnovers of Haj crore or more.

03:27:09

"Exam Prep Tips for Directors and Audits"

Director is CO, then CO will do it; if CFO, he will do it; if CS, he will do it.
Around 200 kids are live; less than a month left for the exam.
Revision is crucial; every point should be in mind; make sure to go through all points.
Passing C inter is not easy; hard work is essential.
Facing problems is inevitable; be brave and keep moving forward.
Automatic results will come with study; no need to worry about negativity.
Notice for AGM should be given 21 days in advance; send financial statements within 30 days of AGM.
If accounts are not adopted, send provisional within 30 days; send final within 30 days of adoption.
Internal audit applicable for listed companies; mnemonic 'TOPD' for criteria.
Special audit can be done by CMA or any professional decided by the board of directors.
Saffron Limited's details: share capital 49 crores, turnover 200 crores, outstanding loan 102 crores.

03:46:28

Math revision, foreign company details, electronic business modes.

Revision of math chapter for kids, ending at 3 o'clock.
Discussion on Company Incorporated Outside India.
Simplification of the chapter for easy understanding.
Importance of the chapter worth 3-4 marks in exams.
Explanation of Company Incorporated Outside India and Foreign Company.
Mnemonics for electronic business modes.
Details of electronic business transactions.
Clarification on foreign company definitions.
Special Foreign Company criteria.
Penalties for violations in the chapter.

04:03:54

Filing Requirements for Foreign Companies in India

Address Number One Principal Registered Office is outside Ecop India
Documents need to be filed in India for both the place of business and registered office
Children studying outside India require filing for the registered office as well
'R' signifies the registered office in India
Details of appointments for Indian representatives of foreign companies need to be filed
Opening and closing details of the place of business must be provided
Financial statements need to be filed within 30 days of establishing a business in India
Financial statements must be filed within six months of the closing of the financial year
Indian CA will audit the financial statements of foreign companies operating in India
Annual returns must be filed within 60 days of the AGM, regardless of being a foreign company or not

04:24:26

Essential Documents for Business Incorporation Inspection

All documents of incorporation, including MO AO and constitution documents, must be provided for inspection.
The country of incorporation is a crucial detail to be addressed, along with the principal place of business.
After two years from the commencement of business, certain documents are not required, such as the instrument defining incorporation.
Specific documents required include a contract for the MD and manager, expert consent contact of the last two years, underwriting commission contract, and power of attorney.

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