[Jai Bajpai is a 3rd year student at School of Legal Studies, University of Petroleum and Energy Studies, Dehradun] Introduction The element of public interest in amalgamation schemes has remained a fairly unexplored territory in the Indian corporate law regime. In essence, an amalgamation scheme ought to be beneficial to each and every class of shareholders and creditors and also in public...
Companies (Amendment) Act, 2017: Loans to Directors
[Utsav Mitra is a 3rd year, B.A. LLB Hons student at The National Law Institute University, Bhopal] The granting of loans to, and security and guarantees provided on behalf of, directors and other interested parties of the directors is governed by section 185 of the Companies Act, 2013. However, this is a widely criticised section, being too prohibitive in nature as compared to the corresponding...
Condonation of Delay Scheme, 2018: A Relief to Defaulting Directors and Companies
[Tanaya Desai is a 4th-year student at ILS Law College, Pune] In a bid to constrict and prevent illicit fund flows and black money by shell companies, the Ministry of Corporate Affairs (“MCA”) last year disqualified over 300,000 directors for default in filing company annual returns and financial statements with the Registrar of Companies (“RoC”), a statutory mandate prescribed by the Companies...
Revisiting Arbitrability of Claims of Oppression and Mismanagement: A Singapore Perspective
[Aishwarya Singh is a 4th year student at Jindal Global Law School] The Bombay High Court (HC) in the case of Rakesh Malhotra v. Rajinder Kumar Malhotra (2014) had held that oppression and mismanagement claims are not arbitrable because the arbitral tribunal does not have the power to grant all the statutory reliefs available in a minority oppression claim. On the other hand, the Singapore Court...
Interpreting the Restriction on Layering of Subsidiaries
[Mayank Labh is a 4th year student at NALSAR University of Law] The Ministry of Corporate Affairs recently notified the Companies (Restriction on Number of Layers) Rules, 2017 (the “Rules”) on 20 September 2017. Much has been debated (here, here and here) on how the Rules affect genuine business structuring of companies and the unnecessary burden and costs it imposes on companies. In this post, I...
Anti-Dilution and Rights Issue: On the Right Side of the Law?
[Job Michael Mathew is a 4th year BA.LL.B (Hons) student at NALSAR University of Law. He may be reached at [email protected]] This post examines whether the instrument of rights issue can be used by unlisted companies in enforcing anti-dilution provisions which may be one of terms in a shareholders’ agreement with a foreign investor. Put simply, anti-dilution means compensating the investor...
Proxy Holders and Corporate Representatives: The Obligation to Vote According to Instructions
[Job Michael Mathew is a 4th year BA.LL.B (Hons) student at NALSAR University of Law. He may be reached at [email protected]] This post examines the question whether proxyholders appointed under section 105 of Companies Act, 2013 (the “Act”) and corporate representatives appointed under section 113 are required to vote according to the specific instructions given to them by their appointers...
One Year On: The Effect of Demonetization on the Companies Act, 2013
[Shikha Rawal is an Associate at Shardul Amarchand Mangaldas & Co.] “Demonetization” is a topic that has evoked considerable interest and strong opinions across the board since it was announced a year ago, i.e. on November 8, 2016. The goal of demonetization was to eliminate the unaccounted cash transactions, and thereby strengthen the economy. Differences of opinion abound on whether...
Regulation of Equity Based Crowdfunding in India
[Priyanka Sunjay is a Fourth year student, B.A., LL.B.(Hons), National Law University, Jodhpur] Crowdfunding is a means by which an entrepreneur or business raises financing by way of small contributions from a large number of individuals using mass communication through the Internet. It is usually used to raise funds for films, art, business ventures or social causes. There are various types of...
Ascertaining Legal Ramifications of Compensation Agreements- Part III (In Search of Common Law Defences to Statutory Violations)
[The following post, the third in a series, has been contributed by Rahul Sibal, 4th year student of NALSAR Hyderabad. The first two posts in the series are available here and here.] In the previous post it was argued that section 166 of the Companies Act, 2013 (the ‘Act’), which partially codified the common law doctrines of no-conflict and no-profit, did not provide for consent-based...
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