Indian Bare Acts

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The Companies Act, 1956

Title : The Companies Act, 1956

Year : 1956



Rep. by the Companies (Amendment) Act, 2000 (53 of 2000), sec. 159 (w.e.f. 13-12-2000).



Restrictions on number of managing agencies .Rep. by the Companies (Amendment) Act, 2000 (53 of 2000), sec. 159 (w.e.f. 13-12-2000).



Right to charge on assets.Rep. by the Companies (Amendment) Act, 2000 (53 of 2000), sec. 159 (w.e.f. 13-12-2000).



Rep. by the Companies (Amendment) Act, 2000 (53 of 2000), sec. 159 (w.e.f. 13-12-2000).



Rep. by the Companies (Amendment) Act, 2000 (53 of 2000), sec. 159 (w.e.f. 13-12-2000).



Rep. by the Companies (Amendment) Act, 2000 (53 of 2000), sec. 159 (w.e.f. 13-12-2000).



Rep. by the Companies (Amendment) Act, 2000 (53 of 2000), sec. 159 (w.e.f. 13-12-2000).



Rep. by the Companies (Amendment) Act, 2000 (53 of 2000), sec. 159 (w.e.f. 13-12-2000).



Rep. by the Companies (Amendment) Act, 2000 (53 of 2000), sec. 159 (w.e.f. 13-12-2000).



Rep. by the Companies (Amendment) Act, 2000 (53 of 2000), sec. 159 (w.e.f. 13-12-2000).



Rep. by the Companies (Amendment) Act, 2000 (53 of 2000), sec. 159 (w.e.f. 13-12-2000).



Rep. by the Companies (Amendment) Act, 2000 (53 of 2000), sec. 159 (w.e.f. 13-12-2000).



Rep. by the Companies (Amendment) Act, 2000 (53 of 2000), sec. 159 (w.e.f. 13-12-2000).



Rep. by the Companies (Amendment) Act, 2000 (53 of 2000), sec. 159 (w.e.f. 13-12-2000).



Rep. by the Companies (Amendment) Act, 2000 (53 of 2000), sec. 159 (w.e.f. 13-12-2000).



Rep. by the Companies (Amendment) Act, 2000 (53 of 2000), sec. 159 (w.e.f. 13-12-2000).



Rep. by the Companies (Amendment) Act, 2000 (53 of 2000), sec. 159 (w.e.f. 13-12-2000).



Rep. by the Companies (Amendment) Act, 2000 (53 of 2000), section 159 (w.e.f. 13-12-2000).



(1) In computing 1 [***] the net profits of a company in any financial year -

(a) Credit shall be given for the sums specified in sub-section (2) and credit shall not be given for those specified in sub-section (3); and

(b) The sums specified in sub-section (4) shall be deducted, and those specified in sub-section (5) shall not be deducted.

(2) In making the computation aforesaid, credit shall be given for the following sums:- bounties and subsidies received from any Government, or any public authority constituted or authorised in the this behalf, by any Government, unless and except in so far as the Central Government otherwise directs.

(3) In making the computation aforesaid credit shall not be given for the following sums:-

(a) Profits, by way of premium, on shares or debentures of the company, which are issued or sold by the company;

(b) Profits on sales by the company of forfeited shares;

(c) 2*[Profits of a capital nature including profits from the sale] of the undertaking or any of the undertakings of the company or of any part thereof;

(d) Profits from the sale of any immovable property or fixed assets of a capital nature comprised in the undertaking or any of the undertakings of the company, unless the business of the company consists, whether wholly or partly, of buying and selling any such property or assets:

3*[Provided that where the amount for which any fixed asset is sold exceeds the written-down value thereof referred to in section 350, credit shall be given for so much of the excess as is not higher than the difference between the original cost of that fixed asset and its written-down value.]

(4) In making the computation aforesaid, the following sums shall be deducted: -

(a) All the usual working charges;

(b) Directors' remuneration;

(c) Bonus or commission paid or payable to any member of the company's staff, or to any engineer, technician or person employed or engaged by the company, whether on a whole-time or on a part-time basis;

(d) Any tax notified by the Central Government as being in the nature of a tax on excess or abnormal profits;

(e) Any tax on business profits imposed for special reasons or in special circumstances and notified by the Central Government in this behalf;

(f) Interest on debentures issued by the company;

(g) Interest on mortgages executed by the company and on loans and advances secured by a charge on its fixed or floating assets;

(h) Interest on unsecured loans and advances;

(i) Expenses on repairs, whether to immovable or to movable property, provided the repairs are not of a capital nature;

4*[(j) Outgoings inclusive of contributions made under clause (e) of sub-section (1) of section 293;]

(k) Depreciation to the extent specified in section 350;

5*[(1) The excess of expenditure over income, which had arisen in computing the net profits in accordance with this section in any year which begins at or after the commencement of this Act, insofar as such excess has not been deducted in any subsequent year preceding the year in respect of which the net profits have to be ascertained;]

(m) Any compensation or damages to be paid in virtue of any legal liability, including a liability arising from a breach of contract;

(n) Any sum paid by way of insurance against the risk of meeting any liability such as is referred to in clause (m);

6*[(o) Debts considered bad and written off or adjusted during the year of account;]

7*[(p) amount paid as cases under section 441A.]

(5) In making the computation aforesaid, the following sums shall not be deducted:-

8 [***]

(b) Income-tax and super-tax payable by the company under the Indian Income-tax Act, 1922 (11 of 1922), or any other tax on the income of the company not falling under clauses (d) and (e) of sub-section (4);

(c) Any compensation, damages or payments made voluntarily, that is to say otherwise than in virtue of a liability such as is referred to in clause (m) of sub-section (4);

6*[(d) Loss of a capital nature including loss on sale of the undertaking or any of the undertakings of the company or of any part thereof not including any excess referred to in the proviso to section 350 of the written-down value of any asset which is sold, discarded, demolished or destroyed over its sale proceeds or its scrap value.
 
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1. The words "for the purpose of section 348," omitted by Act 53 of 2000, section 160 (w.e.f. 13-12-2000).

2. Substituted by Act 65 of 1960, Section 127, for "profits from the sale" (w.e.f. 28-12-1960).

3. Inserted by Act 65 of 1960, Section 127 (w.e.f. 28-12-1960).

4. Substituted by Act 65 of 1960, Section 127, for clause (j) (w.e.f. 28-12-1960).

5. Substituted by Act 65 of 1960, Section 127, for clause (l) (w.e.f. 28-12-1960).

6. Inserted by Act 65 of 1960, Section 127 (w.e.f. 28-12-1960).

7. Inserted by Act 11 of 2000, Section 37.

8. Clause (a) omitted by Act, 2000, Section 160 (w.e.f. 13-12-2000).

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The amount of depreciation to be deducted in pursuance of clause (k) of sub-section (4) of section 349 shall be2*[the amount of depreciation on assets] as shown by the books of the company at the end of the financial year expiring at the commencement of this Act or immediately thereafter and at the end of each subsequent financial year,3*[at the rate specified in Schedule XIV]:-

Provided that if any asset is sold, discarded, demolished or destroyed for any reason before depreciation of such asset has been provided for in full, the excess, if any, of the written-down value of such asset over its sale proceeds or, as the case may be, its scrap value, shall be written off in the financial year in which the asset is sold, discarded, demolished or destroyed.]

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1. Substituted by Act 65 of 1960, Section 128, for section 350 (w.e.f. 28-12-1960).

2. Substituted by Act 53 of 2000, Section 161, for certain words (w.e.f. 13-12-2000).

3. Substituted by Act 31 of 1988, Section 50, for certain words (15-6-1968).

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Rep. by the Companies (Amendment) Act, 2000 (53 of 2000), sec. 162 (w.e.f. 13-12-2000).



Rep. by the Companies (Amendment) Act, 2000 (53 of 2000), sec. 162 (w.e.f. 13-12-2000).



Rep. by the Companies (Amendment) Act, 2000 (53 of 2000), sec. 162 (w.e.f. 13-12-2000).



Rep. by the Companies (Amendment) Act, 2000 (53 of 2000), sec. 162 (w.e.f. 13-12-2000).



Sections1*[349 and 350] shall not apply to a private company unless it is a subsidiary of a public company.

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1. Substituted by Act 53 of 2000, Section 163, for "348 to 354" (w.e.f. 13-12-2000).

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Rep. by the Companies (Amendment) Act, 2000 (53 of 2000), sec. 164 (w.e.f. 13-12-2000).



Rep. by the Companies (Amendment) Act, 2000 (53 of 2000), sec. 164 (w.e.f. 13-12-2000).



Rep. by the Companies (Amendment) Act, 2000 (53 of 2000), sec. 164 (w.e.f. 13-12-2000).



Rep. by the Companies (Amendment) Act, 2000 (53 of 2000), sec. 164 (w.e.f. 13-12-2000).



Rep. by the Companies (Amendment) Act, 2000 (53 of 2000), sec. 164 (w.e.f. 13-12-2000).



Rep. by the Companies (Amendment) Act, 2000 (53 of 2000), sec. 164 (w.e.f. 13-12-2000).



Rep. by the Companies (Amendment) Act, 2000 (53 of 2000), sec. 164 (w.e.f. 13-12-2000).



Rep. by the Companies (Amendment) Act, 2000 (53 of 2000), sec. 164 (w.e.f. 13-12-2000).



Assignment of, or charge on, remuneration
Rep. by the Companies (Amendment) Act, 2000 (53 of 2000), sec. 164 (w.e.f. 13-12-2000).



Rep. by the Companies (Amendment) Act, 2000 (53 of 2000), sec. 164 (w.e.f. 13-12-2000).



Rep. by the Companies (Amendment) Act, 2000 (53 of 2000), sec. 164 (w.e.f. 13-12-2000).



Other rights and liabilities not affected on termination of office
Rep. by the Companies (Amendment) Act, 2000 (53 of 2000), sec. 164 (w.e.f. 13-12-2000).



Rep. by the Companies (Amendment) Act, 2000 (53 of 2000), sec. 164 (w.e.f. 13-12-2000).



Rep. by the Companies (Amendment) Act, 2000 (53 of 2000), sec. 164 (w.e.f. 13-12-2000).
Last updated on September, 2016

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