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The Maharashtra Non-Trading Corporations Act, 1959

Act No. 26 of 1959

mh177

Chapter I

Preliminary

(1) "articles" means the articles of association of a corporation as originally framed or as altered from time to time in accordance with this Act;

(2) "Board of directors" or "Board", in relation to a corporation, means the Board of directors of the corporation;

(3) "corporation" means a no-trading corporation, formed and registered under this Act, or deemed to have been registered thereunder;

(4) "director" includes any person occupying the position of a director by whatever name called;

(5) "financial year" means, in relation to a corporation, the period in respect of which the income and expenditure for the corporation laid before it in annual general meeting is made up whether that period is a year or not;

(6) "memorandum" means the memorandum of associations of a corporation;

(7) "officer" includes a chairman, secretary, manager treasurer, director or any other person empowered to give directions in regard to the affairs of a corporation;

(8) "ordinary resolution" - a resolution shall be an ordinary resolution when at a general meeting of which the notice required under the articles of a corporation has been duly given, the votes cast (whether on a show of hands, or on poll, as the case may be) in favour of the resolution (including the casting vote, if any, of the chairman) by members who, being entitled so to do, vote in person, or where proxies are allowed, by proxy, exceed the votes, if any, cast against the resolution by members so entitled and voting;

(9) "prescribed" means prescribed by rules made under this Act;

(10) "Registrar" means a person appointed by the State Government under section 3 to perform the duties of the Registrar;

(11) "Schedule" means a schedule appended to this Act;

(12) "Scheduled Bank" has the same meaning as in the Reserve Bank of India Act, 1934.

(13) "special resolution" - a resolution shall be a special resolution when-

(a) the intention to propose the resolution as a special resolution has been duly specified in the notice calling the general meeting or other intimation given to the members of the resolution;

(b) the notice required under the articles has been duly given of the general meeting; and

(c) the votes cast in favour of the resolution (whether on a show of hands, or on a poll, as the case may be,) by members who, being entitled so to do, vote in person or where proxies are allowed, by proxy, are not less than three times the number of votes, in any, cast against the resolution by members so entitled and voting.

(a) the provisions of this Act shall have effect notwithstanding anything to the contrary contained in the memorandum or articles or in any agreement executed by a corporation, or in any resolution passed by it in general meeting or by its Board of directors; and

(b) any provision contained in the memorandum, articles, agreement or resolution aforesaid, shall, to the extent to which it is repugnant to the provisions of this Act, become or be void, as the case may be.

Chapter II

Incorporation of Corporations and Matters Incidental Thereto

(a) the objects for which the corporation is formed are confined to the [State of Maharashtra],

(b) the corporation intends to apply the profits, if any, or other income in promotion its objects, and

(c) the corporation intends to prohibit the payment of any dividend to its members.

(a) a corporation having the liability of it's members limited by the memorandum to the amount, if any unpaid on shares respectively held by them; or

(b) a corporation having the liability of its members limited by the memorandum to such amount as the members may respectively undertake by the memorandum to contribute to the assets of the corporation in the event of its being wound up.

(a) state the name of the corporation;

(b) state the place and address where the registered office of the corporation is to be situate;

(c) state the objects of the corporation;

(d) state the amount of share capital with which the corporation is to be registered and the division thereof into shares of a fixed amount;

(e) in the case of a corporation limited by guarantee, state that each member undertakes to contribute to the assets of the corporation in the event of its being wound up while he is a member or within one year after he ceases to be member, for payment of the debts and liabilities of the corporation, or of such debts and liabilities of the corporation as may have been contracted before he ceases to be a member, as the case may be, and of the costs, charges and expenses of winding up, and for adjustment for the rights of the contributories among themselves such amount as may be required not exceeding a specified amount;

(f) be printed and divide into paragraphs numbered consecutively; and

(g) be signed by each subscriber (who shall add his address, description and occupation, if any, and the number of shares he takes) in the presence of at least one witness who shall attest the signature (and shall likewise add his address, description and occupation, if any).

(a) be printed and be divided into paragraphs numbered consecutively; and

(b) be signed by each subscriber of the memorandum (who shall add his address, description and occupation, if any), in the presence of at least one witness who shall attest the signature (and likewise add his address, description and occupation, if any).

(a) may, by ordinary resolution and with the previous approval of the State Government signified in writing change its name or new name; and

(b) shall, if the State Government so directs within twelve months of its first registration or registration by its new name, as the case may be, by ordinary resolution and with the previous approval of the State Government signified in writing, change its name or new name within a period of three months from the date of the direction or such longer period as the State Government may think fit to allow.

Chapter III

Management and Administration

(a) the name and address, and the occupation, if any, of each member;

(b) the shares held by each member distinguishing each share by its number and the amount paid or agreed to be considered as paid, on those shares;

(c) the date on which each member was entered in the register as a member; and

(d) the date on which any member ceased to be a member.

(a) the name of any person is, without sufficient cause, entered in or omitted from the register of members of a corporation; or

(b) default is made, or unnecessary delay takes place, in entering on the register the fact of any person having become, or ceased to be, a member, the person aggrieved, or any member of the corporation or the corporation may apply to the Registrar for rectification of the register.

(a) sell, lease or otherwise dispose of the whole, or substantially the whole, of the undertaking of the corporation, or where, the corporation owns more than one undertaking, the whole or substantially the whole, of any such undertaking;

(b) remit, or give time for the repayment of, any debt due by a director;

(c) invest, otherwise than in trust securities, the sale proceeds resulting from the disposal, after the commencement of this Act, without the consent of the corporation of any such undertaking as is referred to in clause (a), or of any premises or properties used for any such undertaking and without which it cannot be carried on or can be carried on only, with difficulty or only after a considerable time;

(d) borrow monies after the commencement of this Act where the monies to be borrowed, together with the monies already borrowed, will exceed ten thousand rupees;

(e) contribute, after the commencement of this Act, to charitable and other funds not directly-relating to the objects of the corporation or the welfare of its employees, any amounts the aggregate of which will, in any financial year, exceed rupees five thousand.

(b) The first annual general meeting shall be held by a corporation within twelve months of its incorporation.

(c) The next annual general meeting of the corporation shall be held by it within nine months after the expiry of the financial year in which the first annual general meeting was held; and thereafter an annual general meeting shall be held by the corporation within nine months after the expiry of each financial year :

(d) Except in the case referred to in the foregoing proviso, not more than fifteen months shall elapse between the date of one annual general meeting and that of the next.

(a) special resolutions;

(b) resolution which have been agreed to by all the members of a corporation, but which, if not so agreed to, would not have been effective for their purpose unless they had been passed as special resolutions;

(c) resolutions, requiring a corporation to be wound up voluntarily passed in pursuance of section 43.

(a) the names of the directors present at the meeting; and

(b) in the case of each resolution passed at the meeting, the names of the directors, if any, dissenting from, or not concurring in, the resolution.

(a) is, or could reasonably be regarded as, defamatory of any person;

(b) is irrelevant or immaterial to the proceedings; or

(c) is detrimental to the interests of the corporation.

(a) be kept at the registered office of the corporation, and

(b) be open, during business hours, to the inspection of any member without charge, subject to such reasonable restrictions as the corporation may; by its articles or in general meeting impose, so however that not less than two hours in each day are allowed for inspection.

(a) all sums of money received and expended by the corporation and the matters in respect of which the receipt and expenditure take place; and

(b) the assets and liabilities of the corporation

(a) a balance sheet as at the end of the period specified in sub-section (2); and

(b) the income and expenditure account for that period.

(a) in the case of the first annual general meeting of the corporation, to the period beginning with the incorporation of the corporation and ending with a day which shall not precede the day of the meeting by more than nine months; and

(b) in the case of any subsequent annual general meeting of the corporation, to the period beginning with the day immediately after the period for which the account was last submitted and ending with a day which shall not precede the day of the meeting by more than nine months, or in cases where an extension of time has been granted for holding the meeting under section 26, by more.than nine months and the extension so granted.

(a) unless he is a chartered accountant within the meaning of the Chartered Accountants Act, 1949 or is authorized by the State Government in this behalf;

(b) if he is an officer or employee of the corporation;

(c) if he is a partner or is in employment of, an officer or employee of the corporation.

(i) in the case of the balance sheet, of the state of the affairs of the corporation as at the end of its financial years; and

(ii) in the case of the income and expenditure account of the income arid expenditure for its financial year.

(a) a contract which, if made between private persons, would by law be required to be in writing signed by the parties to be charged therewith, may be made on behalf of the corporation in writing signed by any person acting under its authority, express or implied, and may in the same manner be varied or discharged;

(b) a contract which, if made between private persons, would by law be valid although made by parol only and not reduced into writing, may be made by parol on behalf of the corporation by any person acting under its authority, express or implied, and may in the same manner be varied or discharged.

(a) all investments made by a corporation on its own behalf shall be made and held by it in its own name; and

(b) where any such investments are not so held at the commencement of this Act the corporation, shall, within a period of one year from such commencement, either cause them to be transferred to, and hold them in, its own name, or dispose of them.

(a) the nature, value, and such other particulars as may be necessary fully to identify the shares or securities in question; and

(b) the bank or person in whose name or custody the shares or securities are held.

Chapter IV

Arbitration and Winding up

Arbitration

Winding up

Voluntary Winding up

(a) when the period, if any, fixed for the duration of the corporation by the articles has expired, or the event, if any, has occurred, on the occurrence of which the articles provide that the corporation is to be dissolved, and the corporation in general meeting passes a resolution requiring the corporation to be wound up voluntarily;

(b) if the corporation passes a special resolution that the corporation be wound up voluntarily.

(a) it is made within five weeks immediately preceding the date of the passing of the resolution for winding up the corporation and is delivered to the Registrar for registration before that date; and

(b) it embodies a statement of the assets and liabilities of the corporation as at the latest practicable date before the making of the declaration.

(a) appoint one or more liquidators for the purpose of winding up the affairs and distributing the assets of the corporation; and

(b) fix the remuneration, if any to be paid to the liquidator or liquidators.

(a) pay any class or classes of creditors in full;

(b) make any compromise or arrangement with creditors or persons claiming to be creditors or having or alleging themselves to have any claim, present or future, whereby the corporation may be rendered liable;

(c) to compromise all calls or liabilities to calls and debts and liabilities capable of resulting in debts, and all claims, present or future, certain or contingent, subsisting or supposed to subsist between the corporation and a contributory or alleged contributory or other debtor or person apprehending liability to the corporation and all questions in any way relating to or affecting the assets or the winding up of the corporation on such terms as may be agreed and take any security for the discharge of any such call, liability, debt, or claim and give a complete discharge in respect thereof;

(d) from time to time to determine the contribution to be made or remaining to be made by the members or past members or by the estates or nominees, heirs, or legal representatives of deceased members or by any officers to the assets of the corporation, such contribution including debts due from such members or persons;

(e) to institute and defend suits and other legal proceedings on behalf of the corporation in the name of his office;

(f) to issue requisition under section 57 upon the Collector for the recovery as arrears of land revenue of any sum ordered by him to be recovered as dues from members or as a contribution to the assets of the corporation or to the cost of liquidation;

(g) to get disputes referred to arbitration;

(h) to investigate all claims against the corporation and subject to the provisions of this Act to decide questions of priority arising out of such claims, and to pay rateably according to the amount of such debts, the surplus if any being applied in payment of interest from the date" of liquidation at a rate to be fixed by the Registrar and not exceeding the contract rate;

(i) to determine by what persons and in what proportion the cost of the liquidation shall be borne;

(j) to give such directions in regard to the collection and distribution of the assets of the corporation as may appear to him to be necessary for winding up the affairs of the corporation;

(k) to fix the time or times within which creditors shall prove their debts and claims or be included for the benefit of any distribution made before those debts or claims are proved;

(l) to carry on the business of the corporation so far as may be necessary for the beneficial winding up of the same:

(a) make up an account of the winding up, showing how the winding up has been conducted and the property of the corporation has been disposed of, and

(b) call a general meeting of the corporation and a meeting of the creditors for the purpose of laying the account before the meeting and giving an explanation thereof.

Winding up by Registrar

General

(a) if the order is made by the Registrar to the State Government;

(b) if the order is made by any other person to the Registrar, and against such order of the Registrar to the State Government.

(a) on a certificate signed by the Registrar or a liquidator, be deemed to be a decree of a Civil Court and shall be executed in the same manner as a decree of such Court; or

(b) be executed according to the law and under the rules for the time being in force for the recovery of arrears of land revenue, provided that any application for the recovery in such manner of any such sum shall be made to the Collector and shall be accompanied by a certificate signed by the Registrar. Such application shall be made within twelve years from the date fixed in the order and if no such date is fixed, from the date of the order.

(a) a past member shall not be liable to contribute if he has ceased to be a member for one year or upwards before the commencement of the winding up:

(b) a past member shall not be liable to contribute in respect of any debt or liability of the corporation contracted after he ceased to be a member;

(c) no past member shall be liable to contribute unless it appears to the liquidator that the present members are unable to satisfy the contributions required to be made by them in pursuance of this Act;

(d) no contribution shall be required from any past or present member exceeding the amount, if any, unpaid on the shares in respect of which he is liable as such member;

(e) in the case of a corporation limited by guarantee, no construction shall, subject to the provisions of sub-section (2), be required from any past or present member exceeding the amount undertaken to be contributed by him to the assets of the corporation in the event of the being wound up.

(a) a past director shall not be liable to make such further contribution, if he has ceased to hold office for a year or upwards before the commencement of the winding up;

(b) a past director shall not be liable to make such further contribution in respect of any debt or liability of the corporation contracted after he ceased to hold office;

(c) subject to the articles of the corporation, a director shall not be liable to make such further contribution, unless the liquidator deems it necessary to require the contribution in order to satisfy the debts and liabilities of the corporation and the costs, charges and expenses of the winding up.

Chapter V

Control

(a) to summon at the time of his audit any officer, agent, servant or member of the corporation who he has reasons to believe can give valuable information in regard to any transaction of the corporation or the management of its affairs; or

(b) to require the production of any book or document relating to the affairs of any cash or securities belonging to the corporation, by the officer, agent, servant or member in possession of such book, document/cash or securities.

(i) that the business of any corporation is being conducted with intent to defraud its creditors, members or any other persons, or otherwise for a fraudulent or unlawful purpose or in a manner oppressive of any of its members, or that the corporation was formed for any fraudulent or unlawful purpose;

(ii) that the persons concerned in the formation of the corporation or the management of its affairs have in connection therewith been guilty of fraud, misfeasance or other misconduct towards the corporation or towards any of its members; or

(iii) that the members of the corporation have not been given all the information with respect to its affairs which they might reasonably expect,

(a) to produce to the person appointed under section 63 all books and papers of, or relating to, the corporation which are in their custody or power: and

(b) otherwise to give to the said person all assistance in connection with the investigation which they are reasonably able to give.

(a) the expression "agent" in relation to any corporation means any one acting or purporting to act for or on behalf of such corporation and includes the bankers and legal advisers of, and persons employed as auditors by, such corporation; and

(b) any reference to officers or agents shall be construed as a reference to past as well as present officers, or agents, as the case may be.

Chapter VI

Offences

(a) to call a general meeting of the corporation or a meeting of the creditors under clause (b) of sub-section (1) of section 49, or

(b) to send a copy of the account to the Registrar or to make a return to him of the holding of the meetings under sub-section (2) of that section,

(a) which is false in-any material particular, knowing it to be false;

(b) which omits an/ material fact knowing it to be material;

(a) wrongfully obtains possession of any property of a corporation; or

(b) having any such property in his possession, wrongfully withholds it or knowingly applies it to purposes other than those expressed or directed in the articles and authorised by this Act,

Chapter VII

Miscellaneous

(a) the manner in which meetings shall be called by the liquidator under section 49 and the procedure to be followed at such meetings;

(b) the manner of authenticating copies of reports under sub-section (2) of section 65:

(c) any other matter which has to be, or may be prescribed.

(a) any such society or association registered as a company under section 26 of the Companies Act shall be deemed to be a corporation registered under this Act;

(b) memorandum and articles of association of such society or association shall, so far as they are not inconsistent with the provisions of this Act, continue in force until altered or rescinded;

(c) the registers maintained by such society or association shall be deemed to be registers maintained under this Act;

(d) all documents and records filed and maintained in the office of the Registrar for the purposes of the Companies Act in respect of any such society or association shall be transferred to the Registrar appointed under this Act;

(e) certified copies of extracts from the registers maintained in the office of the Registrar under the Companies Act in respect of any such society or association shall constitute registers for the purposes of this Act; and

(f) any reference to any of the provisions of the Companies Act in any document relating to such society or association shall be construed.as a reference to the corresponding provision of this Act.

(a) any right, privilege, obligation or liability acquired, accrued or incurred under the Companies Act;

(b) any penalty or punishment incurred in respect of any offence committed under the Companies Act;

(c) any investigation, legal proceeding or remedy in respect of any such right, privilege, obligation, liability, penalty or punishment as aforesaid; or

(d) any winding up proceeding commenced before the coming into force of this Act;

Schedule I

(See section 6)

Memorandum of Association.

(2) No portion of income or property aforesaid shall be paid or transferred, directly or indirectly, by way of dividend, bonus or otherwise by way of profit, to persons who at any time are, or have been members of the corporation or to any one or more of them or to any persons claiming through any one or more of them;

(a) no remuneration or other benefit in money or money's worth shall be given by the corporation to any of its members, whether officers or servants of the corporation or not, except payment of out of pocket expenses, reasonable and proper interest on money lent, or reasonable and proper rent on premises let to the corporation;

(b) no member shall be appointed to any office under the corporation which is remunerated by salary, fees or in any other manner not excepted by clause (a);

(c) nothing in this clause shall prevent the payment by the corporation in good faith or reasonable remuneration to any of its officers or servants (not being members) or to any other person (not being a member) in return for any service actually rendered to the corporation.

Names, addresses, descriptions, occupations of the subscribers

1. .................................. of ................................. *

2. .................................. of ................................. *

3. .................................. of ................................. *

4. .................................. of ................................. *

5. .................................. of ................................. *

6. .................................. of ................................. *

7. .................................. of ................................. *

Dated the           day of

Witness to the above signatures.

Schedule II

[See section 8(2)]

Articles of Association

(a) the number of directors, their qualifications and disqualifications, removal from office and vacation of office by them, filling up of casual vacancies, their retiring age,

(b) share capital and voting and other rights attached to the shares, call on and transfer of shares,

(c) general, or extraordinary meetings of the corporation and of the board of directors, the length of notice for calling the meetings, the contents and the manner of service of such notice and the procedure to be followed at such meetings.

Schedule III

(See section 16)

Certificate of Incorporation

Registrar.

Notifications