Section 38 of Companies Act 2013

Section 38 of Companies Act, 2013

Punishment for personation for acquisition, etc., of securities.

1.     Any person who—

a.     makes or abets making of an application in a fictitious name to a company for acquiring, or subscribing for, its securities; or

b.    makes or abets making of multiple applications to a company in different names or in different combinations of his name or surname for acquiring or subscribing for its securities; or

c.     otherwise induces directly or indirectly a company to allot, or register any transfer of, securities to him, or to any other person in a fictitious name, shall be liable for action under section 447.

2.     The provisions of sub-section (1) shall be prominently reproduced in every prospectus issued by a company and in every form of application for securities.

3.     Where a person has been convicted under this section, the Court may also order disgorgement of gain, if any, made by, and seizure and disposal of the securities in possession of, such person.

4.     The amount received through disgorgement or disposal of securities under subsection

5.     shall be credited to the Investor Education and Protection Fund.

********************************

Section 38 of Companies Act, 1956

Effect of alteration in memorandum or articles.

Notwithstanding anything in the memorandum or articles of a company, no member of the company shall be bound by an alteration made in the memorandum or articles after the date on which he became a member, if and so far as the alteration requires him to take or subscribe for more shares than the number held by him at the date on which the alteration is made, or in any way increases his liability as at that date, to contribute to the share capital of, or otherwise to pay money to, the company:

Provided that this section shall not apply :  

(a) in any case where the member agrees in writing either before or after a particular alteration is made, to be bound by the alteration; or

(b) in any case where the company is a club or the company is any other association and the alteration requires the member to pay recurring or periodical subscriptions or charges at a higher rate although he does not agree in writing to be bound by the alteration.