Section 76 Of The Companies Act

Section 76 3 and the duty of good faith and care.

Section 76 of the companies act. Chapter 2 of the 2008 companies act is dedicated to the formation administration and dissolution of companies. 1 a company may pay a commission to any person in consideration of. A in good faith and for a proper purpose.

Nbfcs registered with rbi. Section 76 of the companies act addresses the standard of conduct expected from directors and extends it beyond the common law duty of directors by compelling them to act honestly in good faith and in a manner they reasonably believe to be in the best interests of and for the benefit of their companies. Part f thereof elaborately provides for governance of companies and section 76 contained therein requires directors and other company office bearers to meet the standards of directors conduct as prescribed therein.

Section 76 seems self contradictory as it starts with notwithstanding anything contained in section 73 but ends up with direction that sub section 2 of section 73 needs to be complied with. Furthermore in terms of section 76 4 of the act a director would have satisfied the obligations of section 76 3 if the director made a decision or supported the decision of a committee or the board with regard to that matter and the director had a rational basis for believing and did believe that the decision was in the best interests of the company. For the purposes of sub clause ix of clause 76 of section 2 of the act a director other than an independent director or key managerial personnel of the holding company or his relative with reference to a company shall be deemed to be a related party.

Notified companies by central government after consultation with rbi. Section 76 3 of the companies act states that a director of a company when acting in that capacity must exercise the powers and perform the functions of a director in good faith and for. Acceptance of deposits from public by certain companies 1 notwithstanding anything contained in section 73 a public company having such net.

Section 76 in the companies act 1956 76. 1 in this act unless the context otherwise requires solvency statement in relation to a proposed redemption of preference shares by a company out of its capital under section 70 a proposed giving of financial assistance by a company under section 76 9a or 9b or a proposed reduction by a company of its share capital under section 78b or 78c means a statement by the directors of the company that they have formed the opinion. Provisions under section 73 to 76 of the companies act 2013 and the companies acceptance of deposits rules 2014 shall apply to all companies except banking companies.