Definitions Under Section 2(23) to 2(28) of the Companies Act, 2013

Section 2 of the Companies Act, 2013 contains definitions used throughout the Act. Clauses (23) to (28) define six important expressions: Company Liquidator, company secretary, company secretary in practice, contributory, control and Cost Accountant.

At a glance: These definitions should be read with the relevant provisions of the Companies Act, 2013 and, where applicable, the Company Secretaries Act, 1980, the Cost Accountants Act, 1959 and the Insolvency and Bankruptcy Code, 2016.

Section 2(23) to 2(28): Quick Reference

Section	Expression	Basic meaning
2(23)	Company Liquidator	Company Liquidator appointed by the Tribunal in accordance with Section 275 for winding up under the Act.
2(24)	Company secretary or secretary	A company secretary under the Company Secretaries Act, 1980 appointed by a company to perform company secretary functions under the Companies Act.
2(25)	Company secretary in practice	A company secretary deemed to be in practice under Section 2(2) of the Company Secretaries Act, 1980.
2(26)	Contributory	A person liable to contribute towards the assets of a company on winding up, subject to the statutory explanation concerning fully paid-up shareholders.
2(27)	Control	Includes specified rights or powers concerning appointment of directors or management or policy decisions.
2(28)	Cost Accountant	A cost accountant within the applicable professional law who holds the required valid certificate of practice.

Section 2(23) - Company Liquidator

Definition: "Company Liquidator" means a person appointed by the Tribunal as the Company Liquidator in accordance with Section 275 for the winding up of a company under the Companies Act, 2013.

The definition directly connects the expression "Company Liquidator" with Section 275. Section 275 deals with Company Liquidators and their appointment in a winding up by the Tribunal.

Under the current Section 275 framework, the Tribunal appoints the Company Liquidator for a company being wound up by the Tribunal. Section 275 should therefore be read together with Section 2(23) whenever the expression "Company Liquidator" is used in relation to winding-up proceedings.

Section 2(24) - Company Secretary or Secretary

Definition: "Company secretary" or "secretary" means a company secretary as defined in Section 2(1)(c) of the Company Secretaries Act, 1980 who is appointed by a company to perform the functions of a company secretary under the Companies Act.

Section 2(1)(c) of the Company Secretaries Act, 1980 defines a "Company Secretary" as a person who is a member of the Institute. For the purpose of Section 2(24) of the Companies Act, the person must also be appointed by a company to perform the statutory functions of a company secretary.

Section 2(25) - Company Secretary in Practice

Definition: "Company secretary in practice" means a company secretary who is deemed to be in practice under Section 2(2) of the Company Secretaries Act, 1980.

This definition is different from the definition of a company secretary appointed by a company. Section 2(25) refers specifically to the professional practice status determined under the Company Secretaries Act, 1980.

Section 2(26) - Contributory

Definition: "Contributory" means a person liable to contribute towards the assets of the company in the event of its being wound up.

The explanation to Section 2(26) clarifies that a person holding fully paid-up shares in a company is also considered a contributory. Such a shareholder, however, has no liabilities of a contributory under the Act while retaining the rights of a contributory.

The definition is particularly relevant to winding-up provisions dealing with persons whose rights or obligations are connected with the assets and liabilities of a company in liquidation.

Section 2(27) - Control

Definition: "Control" includes the right to appoint a majority of the directors or to control the management or policy decisions exercisable by a person or persons acting individually or in concert, directly or indirectly, including by virtue of their shareholding, management rights, shareholders agreements, voting agreements or in any other manner.

The definition is deliberately broad. Control is not restricted to ownership of a particular percentage of shares. Depending on the circumstances, it may arise through the power to appoint a majority of directors, management rights, voting arrangements, shareholder agreements or another mechanism through which management or policy decisions can be controlled.

The words "directly or indirectly" and "acting individually or in concert" are important when examining whether control exists in a particular corporate arrangement.

Section 2(28) - Cost Accountant

Definition: "Cost Accountant" means a cost accountant as defined in Section 2(1)(b) of the applicable Cost Accountants legislation and who holds a valid certificate of practice under Section 6(1) of that Act.

The definition therefore links professional status with the requirement of holding a valid certificate of practice. This distinction is relevant where the Companies Act requires work, certification or professional functions to be performed by a Cost Accountant.

Why These Definitions Matter

The definitions in Section 2 are interpretation provisions. When one of these expressions appears elsewhere in the Companies Act, its statutory meaning under Section 2 generally applies unless the context otherwise requires.

Sections 2(23) to 2(28) cover three broad areas of company law: professionals involved in corporate compliance, professionals and persons involved in winding up, and the concept of corporate control. Reading the definition together with the provision in which the defined expression is used is therefore important.

Official Legal Resources

This article is intended as a general guide to the statutory definitions. For a particular transaction, compliance requirement or proceeding, the current Act, rules, notifications and applicable judicial decisions should also be examined.