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CS Executive · Company Law and Practice · Distribution of Profits

While checking the Companies Act, 2013 on India Code, a trainee finds Section 320 headed 'Distribution of property of company' with no text. Which conclusion is correct?

The heading is only a placeholder. Section 320 was omitted by Section 255 and the Eleventh Schedule with effect from 15 November 2016, so it has no operative text and no legal effect on any company.

  1. AThe text is merely missing and the old provision still applies
  2. BThe heading remains only as a record, as the section has been omitted w.e.f. 15-11-2016Correct
  3. CThe section is suspended until notified by the Central Government
  4. DThe section applies only to companies registered before 2013

Explanation

India Code displays the heading with a note that the section is omitted by s. 255 and the Eleventh Schedule w.e.f. 15-11-2016. The heading is retained as a placeholder, and the omitted section has no legal effect.

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