Companies Act, 2013

Section 288

Power of Central Government to supersede Board of Directors

⚡ Quick Answer Reference: Section 288 Companies Act

Provision: Section 288 of Companies Act
Act: Companies Act, 2013
Classification: corporate
Jurisdiction: India
Summary: The Central Government can supersede the Board of Directors of a company if it thinks it's necessary or expedient. This means the Central Government will take control of the company and make decisions on its behalf.

Statutory Content

What does Section 288 of Companies Act say?

If the Central Government is of the opinion that it is necessary or expedient so to do, it may, by order, supersede the Board of Directors of a company, and thereupon, the Central Government shall exercise all such powers of the Board as the Board might exercise, and the company shall be managed by a person or persons appointed by the Central Government.

Indian StandardSection 288, Companies Act, 2013

Bluebook (21st ed.)Companies Act, 2013, § 288 (India)

Court Pleading StandardSection 288 of the Companies Act, 2013

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Source: Gazette of India (Official Publication)Verify egazette.gov.in ↗

✓ VERIFIED FOR LEGAL ACCURACYReviewed & certified by Advocate Priya Menon (Bar Council ID: MAH/4521/2018).

AI Educational GuideAI-generated explanation for educational and research purposes. Original statutory text is preserved exactly.

Section Meaning & Purpose

What does Section 288 of Companies Act mean?

Plain English Explanation

The Central Government can supersede the Board of Directors of a company if it thinks it's necessary or expedient. This means the Central Government will take control of the company and make decisions on its behalf.

Practical Interpretation

This section gives the Central Government the power to intervene in a company's affairs if it believes the company is not being managed properly. The Central Government can then appoint someone to manage the company until further notice.

Core Legal Purpose

The core purpose of this section is to allow the Central Government to take control of a company if it's deemed necessary or expedient. This is to ensure the company is being managed in the best interests of its stakeholders.

Key Legal Elements

•The Central Government must be of the opinion that it is necessary or expedient to supersede the Board of Directors.
•The Central Government must issue an order to supersede the Board of Directors.
•The Central Government must exercise all the powers of the Board of Directors after supersession.
•The company must be managed by a person or persons appointed by the Central Government.

Practical Example

Practical Example of Section 288 Companies Act

Rajesh is the Managing Director of XYZ Limited, a public company listed on the stock exchange. The company has been facing financial difficulties and is struggling to meet its debt obligations. The Central Government, after conducting an investigation, decides that it is necessary to supersede the Board of Directors of XYZ Limited. The Central Government issues an order superseding the Board and appoints a new Managing Director, Priya, to manage the company. Priya is tasked with restructuring the company's debt and implementing a new business plan to ensure the company's survival.

Common Questions (FAQ)

Frequently Asked Questions about Section 288 Companies Act

Q: What is the punishment or consequence under Section 288 of Companies Act, 2013?

This section is a procedural provision and does not prescribe a penal punishment. The Central Government's decision to supersede the Board of Directors is not a criminal offense, but rather a measure to ensure the company is being managed in the best interests of its stakeholders.

Q: Does this section apply to private individuals or public entities?

This section applies to public companies listed on the stock exchange, as well as private companies that are deemed to be in the public interest.

Q: Is an offence under this section bailable or cognizable?

This section is not a criminal provision, and therefore, it does not prescribe a bailable or cognizable offense.

Common Questions about Section 288 Companies Act

What is Section 288 of Companies Act?

Section 288 of the Companies Act, 2013 (Companies Act) defines and regulates "Power of Central Government to supersede Board of Directors". In plain terms: The Central Government can supersede the Board of Directors of a company if it thinks it's necessary or expedient. This means the Central Government will take control of the company and make decisions on its behalf.

What are the elements of Section 288 of Companies Act?

The essential elements of Section 288 of Companies Act are: The Central Government must be of the opinion that it is necessary or expedient to supersede the Board of Directors.; The Central Government must issue an order to supersede the Board of Directors.; The Central Government must exercise all the powers of the Board of Directors after supersession..

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