ABC (Guarantee) Limited having paid-up share capital of Rs 50,000,000 appointed X and Co, chartered accountants (partner ship between Mr.N (CA) and MR. T Bar At Law) as its legal advisors on retainer-ship basis. You are the new compliance officer of the company, please discuss the legal stances in this regard.
According to section (3) Companies Legal Advisors Act, 1974 every company which has paid up capital of Rs. 500,000/- or more is required to appoint a legal advisor to advise such company in the performance of its functions and the discharge of its duties in accordance with laws.
Clause B of Section 2 defines the company (which is liable to appoint a Legal Advisor) in the following words
"Company" means a company formed and registered under the Companies Act,
1913 (VII of 1913), but does not include a company the paid -up capital of which is
less than 1[five lakh rupees] or a company limited by guarantee or an association
registered under section 26 of that Act"
In my opinion this act is not applicable to AOP,compnies limited by Guarantees and compnies having paid up capital less than Rs. 500,000/-.
Thanx Sir, here seems problem in appointment of a firm i think?
I think firm in which an advocate and a professional accountant are partner can be also apointed as legal advisor because CMA's and CA's can also practice in corporate laws. Additionally a firm can also apointed as legal advisor under Companies Legal Advisors Act, 1974 although Companies Legal Advisors Act, 1974 is not applicable to Companies Limited by Gurantee.
Okay, Thanx sir, agreed that no need to apply Act on Guarantee limted. but in case Act is applicable on a Co, then all partner of the firm should be advocate.
Its clear that a guarantee limited is not supposed to appoint a legal adviser.
But as for a company is concerned, Sec 3(2) of act states
"No person other than an <u><b>advocate or a registered firm</b></u> shall be appointed to be a Legal Adviser.
and clause D of section 2 defines
"Registered firm" means firm registered under the Partnership Act, 1932 (IX of 1932), <b>ALL</b> the partners of which are advocates.
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