chhatramani/Nepal-Legal-Text-Corpus-44laws huggingface dataset:
Companies Act 2063

Chapter 6 Board Of Directors

Section 97 : Meetings of board of directors
1) Meetings of the board of directors of a private company shall be held as mentioned in the articles of association.
2) Meetings of the board of directors of a public company shall be held at least six times in a year.
Provided, however, that the interval between any two meetings shall not exceed three months.
3) The directors shall be present in personal meetings of the board of directors of a company. The presence of the proxy of a director in his/her stead shall not be held valid.
4) No meeting of the board of directors shall be held unless it is attended by at least fifty one per cent of the total number of directors of the company.
Provided, however, that any director who is not entitled to take parting any matter to be discussed in a meeting of the board of directors under this Act shall not be counted for the purposes of this sub- section.
5) If a meeting of the board of directors cannot be held because of the lack of presence of directors in the number mentioned in Subsection (4), another meeting may be called by giving a notice of at least three days. Even if such meting is not attended by the directors in the number mentioned in Sub-section (4), the proceedings and decisions conducted and made by the attending directors shall be valid.
6) The decision of a majority in a meeting of the board of directors shall be binding, and in the event of a tie, the Chairperson may exercise the casting vote, in addition to a vote cast by him/her as a director.
Provided, however, that any director who has any personal concern or interest in any matter to be discussed in a meeting of the board of directors shall not be entitled to take part in such discussion and vote on the matter.
7) Minutes regarding the names of directors present in the meeting of board of directors, the subjects discussed and the decisions taken thereon shall be recorded in a separate book, and such minute book shall be signed by at least fifty one per cent of the total directors present in the meeting.
Provided, however, that, if any director puts forward any opinion opposed too or differing from the decision in the course of discussions on any subject in a meeting, he/she may mention the same in the minute book .
8) Any decision shall not be deemed invalid merely for the reason that there is no signature of any member.
9) Notwithstanding anything contained in Sub-section (3), (4), (5) and (6),except in the cases that are so expressly prohibited by them memorandum of association or articles of association, if all the members of the board of directors or a sub-committee of directors so consent in writing in regard to any act or resolution permitted to be done or adopted by the board of directors or such sub-committee, such act may be done even without holding a meeting by recording such consent in the minute book.
10) The consent referred to in Sub-section(9) shall be deemed to be a decision of a meeting of board of directors.
Companies Act 2063

Chapter 6 Board Of Directors

Section 98 : Notice of meeting of board of directors
(1) Except as otherwise provided in the articles of association of a company, the company secretary or Chairperson of the board or chief executive of the company shall call a meeting of the board of directors of the company.
(2) Notwithstanding anything contained in Sub-section (1) if at least twenty five per cent directors of the total number of directors make written requisition, setting out the subject to be discussed in the meeting, for calling the meeting of the board of directors, the Chairperson shall call the meeting of the board no later than seven days of the receipt of such requisition. If the meeting of the board of directors is not called within that period, such requisition making directors themselves may call the meting of the board of directors.
(3) The matters about the notice of a meeting of the board of directors shall be as provided in the articles of association of the company. Failing such provision, a written notice of the meeting of board of directors and agenda thereof shall be sent to every directors at the address supplied by him/her to the company; and such notice may also be given through any electronic means of communication.

Companies Act 2063

Chapter 6 Board Of Directors

Section 99 : Responsibilities and duties of directors
1) No director or of a company shall do any thing to derive personal benefit through the company or in the course of conducting business of the company.
2) If any person has derived personal benefit in the course of business of the company in contravention of Sub-section(1), the company shall recover the amount involved in the matter from such director as if such amount were a loan.
3) Any person appointed as a director of a public company shall, prior to assuming the duties of his office, take an oath of secrecy and honesty in a format as prescribed.
4) Every director and officer of a company shall, in discharging their duties, act honestly and in good faith, having regard to the interest and benefit of the company, and exercise such care, caution, wisdom, diligence and efficiency as a reasonable and prudent person exercises.
5) The company may recover damages for any loss or damage caused too the company from a director who does any act with ulterior motive, causing such loss or damage to the company, in contravention of Sub-section (4).
6) It shall be the duty of every director to comply with this Act, memorandum of association, articles of association of the company and the consensus agreement.

Companies Act 2063

Chapter 6 Board Of Directors

Section 100 : Disclosure about securities
1) In the event that the shares or debentures of a company are listed in a body operating the stock exchange, after the director has made disclosure to the company about the shares or debentures of such company pursuant to Section 94, the company shall promptly give information thereof to such body.
2) Such body shall publish the information received pursuant to Sub-section(10) in such manner as it thinks fit.
Companies Act 2063

Chapter 6 Board Of Directors

Section 101 : Prohibition on loans to officers or shareholders
(1)No company shall make any loan or provide any financial assistance to its officer, substantial shareholders or officer, shareholder of a holding company 109 or a close relative of such person nor shall it give any guarantee or provide security in respect of any loan borrowed by such officer or shareholder or close relative from any other person.
Provided, however, that this provision shall not apply to any loan or facility to be made or provided to any employee of a company in accordance with the rules of the company or to any loan made or guarantee given by any bank or financial institution in the ordinary course of business transaction, except as prohibited by the prevailing law.
(2) Any person mentioned in Sub-section (1) shall repay any loan, which was borrowed by him/her prior to the commencement of this Act, no later than 22 Ashwin 2065 (8 December 2008).

Companies Act 2063

Chapter 6 Board Of Directors

Section 102 : Prohibition on giving false statements by officers
If any officer, knowingly giving false statements in a general meeting of a company, about the actual financial situation of the company, encourage to distribute higher dividend to the shareholders of the company than that can be distributed from the profits, thereby affecting the capital of the company, the officer giving such false statements shall be personally liable for such act.

Companies Act 2063

Chapter 6 Board Of Directors

Section 103 : Transaction with other person and jurisdiction of company
1) No transaction done by a company with another person shall be void or invalid merely on the ground that such transaction is beyond jurisdiction based on any matter contained in the memorandum of association of the company.
2) It shall be the duty of every director and officer to do such transaction within the ambit of jurisdiction specified in the memorandum of association of the company.
3) Except in the case mentioned in Sub-section (1), any act or transaction done by a director beyond the authority conferred to him/her may be rectified by the company by adopting a special resolution in its general meeting.
4) No director, officer or other person of the company shall be deemed to have been released from any liability under this Act for any act done or action taken by him/her beyond jurisdiction merely on the ground that any act or transaction has been ratified by a special resolution pursuant to Sub-section(3).
Companies Act 2063

Chapter 6 Board Of Directors

Section 104 : Company to be bound
(1) Any act done or action taken by or document signed by at least one director authorised by a company or any person authorised to act for the company shall be valid and binding for the company.
(2) where any person does any transaction with a company in good faith, such transaction shall be binding for the company; and nothing contained in memorandum of association, articles of association of the company or in any resolution adopted by the general meeting or in any agreement concluded between the company and its shareholder shall be deemed to have made any limitation in or restriction on the authority of the director or the authorised person to do such transaction.
Provided, however, that if any officer does any act or transaction mentioned in Sub-section (1) or (2) in excess of his/her authority, such officer shall be personally liable for such act or transaction unless such authority is ratified by the general meeting pursuant to this Act ; and the company may also recover from him/her the loss or damage, if any caused to the company from such act or transaction.

Companies Act 2063

Chapter 6 Board Of Directors

Section 105 : Restrictions on authority of directors
1) The board of directors of a public company, or of a private company receiving loans from any bank or financial institution, shall not, except with a special resolution being adopted by the general meeting of shareholders, do or cause to be done the following act:
(a) selling, donating, gifting, leasing or otherwise disposing of more than seventy per cent of one or more undertakings being operated by it;
(b) borrowing moneys, where the moneys to be borrowed will exceed the aggregate of the paid up capital of the company and its free reserves, apart from any loans and faculties with a term of less than six months obtained by it from a bank or financial institution in the ordinary course of business transaction;
(c) Making a contribution, donation or gift in a sum exceeding one lakh rupees in one financial year or a sum exceeding one per cent of the average net profits of the company during the last three financial years, whichever is the lesser, except the contribution, donation, gift etc. made for the welfare of its employees or for the promotion of its business.
Provided, however, that:
(i) Nothing contained in Clause (a) shall affect the title of a buyer who buys any property or undertaking of a company on payment of the prevailing market price from a company which is solely engaged in the business of buying and selling of movable and immovable properties.
(ii) The provision of Clause (b) shall not be applicable to the acceptance by a company carrying on banking or financial transaction or insurance business of deposits or insurance premium from the general public in the ordinary course of its business transaction.
2) The general meeting may specify appropriate terms and conditions while giving approval for the purposes of Sub-section (1).
Companies Act 2063

Chapter 6 Board Of Directors

Section 106 : Validity of acts already done
If it is afterwards discovered that any provision under this Act has not been complied with in respect of the appointment of any director, acts already done by such director him /her before the discovery of such fact shall not be rendered invalid by that fact.

Companies Act 2063

Chapter 6 Board Of Directors

Section 107 : Registers of director and company secretary
1) Every company shall maintain a separate register of director and of company secretary, if any.
2) Every company shall record the name, surname, address, citizenship, profession, occupation of its director or secretary, and the date of appointment as director or secretary as well as the date of removal, if applicable, in the register maintained pursuant to Subsection, (1), and shall send a notice of the alteration, if any, made in such detail within fifteen days.

Companies Act 2063

Chapter 7 Accounts And Records Of Company

Section 108 : Accounts of company
1) Every company shall duly maintain its accounts in the Nepali or the English language.2) The accounts to be maintained under Sub-section (1) shall be maintained according to the double entry system of accounting and in consonance with the accounting standards enforced by the competent body under the prevailing law and with such other terms and provisions required to be observed pursuant to this Act, in such a manner as to clearly reflect the actual affairs of the Company.
3) The books of account of a company shall not be kept at any place other than its registered office, except with the approval of the Office.
4) The cash balance of a company, other than the amount specified by the board of directors, shall be deposited in a bank and transaction shall be done through the bank.
5) Subject to the provisions contained in this Chapter, the directors or other officers shall have the final responsibility to maintain books of account and records of the company.
6) Where there is a default in complying with the provisions made in this Act in respect of the preparation of books of account and annual financial statements of a company, the director or officer him/herself, during whose tenure the annual financial statements and other reports have been prepared, shall be responsible under this Act.
Companies Act 2063

Chapter 8 Audit

Section 110 : Company to appoint auditor
1) Every company shall appoint an auditor under this Act to have its accounts audited.
2) In cases where any company has a branch office outside Nepal , the auditor appointed pursuant to Sub-section (1) may also audit the accounts of that branch office except as otherwise provide in the prevailing law of the country where such branch office is situated.

Companies Act 2063

Chapter 8 Audit

Section 111 : Appointment of auditor
1) The auditor of accompany shall be appointed, from amongst the auditors licensed to carry out audit under the prevailing law, by the general meting, subject to Chapter-18 ,in the case of a public company, and, in accordance with the provision as contained in the memorandum of association, articles of association or consensus agreement, any failing such provision, by the general meeting, in the case of a private company; and his/her name shall be forwarded to the Office within fifteen days from the date of such appointment.
Provided, however, that the board of directors may appoint the auditor prior to the holding of the first annual general meeting.
2) The auditor appointed pursuant to Sub-section (1) shall hold office only until the next annual general meeting.
3) No auditor or his/her partner or ex-partner or employee or ex-employee shall be appointed as auditor for more than three consecutive terms to perform the audit of a public company.
Provided, however, that this restriction shall not apply to any partner who ended partnership or any employee who left the service of such auditor three years before.
Companies Act 2063

Chapter 8 Audit

Section 112 : Disqualifications of auditor
1) None of the following persons or the firms or companies in which such persons are partners shall be qualified for appointment as auditor and shall, despite appointment as auditor, continue to hold office:
(a) A director, advisor appointed with entitlement to regular remuneration or cash benefit, a person or employee or worker involved in the management of the company or a partner of any of them or and employee of any of such partners or a close relative of a director or partner, out of them, or and employee of such relative;
(b) A debtor who has borrowed moneys from the company in any manner, or a person who has failed to pay any dues payable to the company within the time limit and is in such arrears or close relative of such person;
(c) A person who has been sentenced to punishment for an offense pertaining to audit and a period of five years has not elapsed thereafter;
(d) A person who has been declared insolvent;
(e) A substantial shareholder of the company or a shareholder holding one percent or more of the paid up capital of the company or his close relative;
(f) A person who has been sentenced to punishment for an offense of corruption, fraud or a criminal offense involving moral turpitude and a period of five years has not elapsed thereafter;
(g) A person referred to in Sub-section (3) of Section 111;
(h) In the case of a public company , any person who works, whether full time or part time , for any governmental body or any body owned fully or partly by the Government of Nepal or any other company or a partner of such person or a person who is working as an employee of such partner or a person who is authorised to sign any documents or reports to be prepared by the management of the company;
(i) A company or corporate body with limited liability;
(j) A person having interest in any transaction with the company or his/her close relative or a director, officer or substantial shareholder of another company having any interest in any transaction with the company.
2) The auditor shall, prior to his/her appointment ,give information in writing to the company that he/she is not disqualified pursuant to Sub-section(1).
3) Where any auditor becomes disqualified to audit the accounts of a company or there arises a situation where he/she becomes disqualified for appointment or can no longer continue to act as an auditor of the company, he/she shall immediately stop performing audit which is required to be performed or is being performed by him/her and give information thereof to the company in writing.
4) The audit performed by an auditor who has been appointed in contravention of this Section shall be invalid.

Companies Act 2063

Chapter 8 Audit

Section 113 : Power of Office to appoint auditor
Where the annual general meeting of a company fails to appoint an auditor for any reason or where the annual general meeting itself cannot be held or where the auditor appointed pursuant to this Act ceases to continue his/her office for any reason, the Office may, at the request of the board of directors of the company, appoint another auditor.
Companies Act 2063

Chapter 8 Audit

Section 114 : Accounts and records to be furnished
The books of accounts and records of a company shall on his/her demand, at any time during office hours be furnished to the auditor for the purposes of audit; and the concerned director or employee shall also forthwith give oral explanations on such matter as may be asked by him/her, within a reasonable period of time.

Companies Act 2063

Chapter 8 Audit

Section 115 : Functions and duties of auditor
1) The auditor shall, addressing the shareholders or the appointing authority, submit to the company his/her report, certifying the balance sheet, profit and loss account and cash flow statement based on the books of account, records and accounts audited by him/her.
2) The audit report shall be prepared in accordance with the prevailing law or in consonance with the audit standards prescribed by the competent body; and such report shall state the matters to be set out under this Act ,as per necessity.
3) The audit report as referred to in Sub-section (2) shall also indicate the following matters,
inter alia:
(a) Whether such information and explanations have been made available as were required for the completion of audit;
(b) Whether the books of account as required by this Act have been properly maintained by the company in a manner to reflect the real affairs of its business;
(c) Whether the balance sheet, profit and loss account and cash flow statements received have been prepared in compliance with the accounting standards prescribed under the prevailing law and whether such statements are in agreement with the books of account maintained by the company;
(d) Whether, in the opinion of the auditor based on the explanations and information made available in the course of auditing, the present balance sheet properly reflects the financial situation of the company, and the profit and loss account and cash flow statement for the year ended on the same date properly reflect the profit and loss, cash flow of the company, respectively;
(e) Whether the board of directors or any representative or any employee has acted contrary to law or misappropriated any property of the company or caused any loss or damage to the company or not;
(f) whether any accounting fraud has been committed in the company
(g) Suggestion, if any.

Companies Act 2063

Chapter 8 Audit

Section 116 : Audit report to bear auditor’s signature
1) An audit report prepared by the auditor appointed by any company this Act shall be signed and dated by the auditor him/herself.
2) Whether any company has appointed any accounting institution licensed under the prevailing law to carry out audit, the member who has been authorised by a decision of the partners of a such institution shall sign and date the audit report.
Companies Act 2063

Chapter 8 Audit

Section 117 : Information to be provided
The Company shall, subject to the provisions contained in this Act, send a copy of the report made by the auditor to the shareholders. Whether there is a provision of formal trade union in such company, the company shall, at the request in writing of such trade union, provide one copy of such report to that trade union.

Companies Act 2063

Chapter 8 Audit

Section 118 : Remuneration of auditor
The remuneration of an auditor shall be as prescribed by the appointing authority; and such remuneration shall be borne by the company.

Companies Act 2063

Chapter 8 Audit

Section 119 : Provision relating to removal of appointed auditor
1) No auditor appointed pursuant to this Chapter shall be removed pending the completion of audit of accounts of any financial year for which he/she was appointed as the auditor.
2) Notwithstanding anything contained in Sub-section (1) , if any auditor breaches the code of conduct of auditors or does any act against the interest of the company which has appointed him as the auditor or commits any act contrary to the prevailing law, such auditor may be removed through the same process whereby he/she was appointed as auditor, by giving prior information to the Nepal Chartered Accountants Institute, and with the approval of the regulatory authority, if any authorised by the prevailing law for the regulation of business of the company concerned , and failing such authority, with the approval of the Office.
3) While removing an auditor pursuant to Sub-section (2), the auditor shall be provided with a reasonable opportunity to defend him/herself.

Companies Act 2063

Chapter 9 Call For Explanation And Investigation

Section 120 : Power of Office to call for explanation
1) Where any matter is unclear in the documents submitted by a company, and such matter has to be set out or any explanation is necessary in respect of any matter, the Office may call on the company to furnish explanation on such matter within such reasonable period of time as specified by it.
2) The management of the company shall, within the specified period of time, send proper replies the specified period of time, sent proper replies to the matters with respect to which explanation has been called on pursuant to Sub-section(1).
3) If, in the course of perusing explanation, the Office notices any irregularity in the business of a company, it may give necessary directive to the company to regularise, or cause to be regularised, it, and it shall be the duty of the company to obey such directive.