[The following post is contributed by Nivedita Shankar, who is a Senior Associate at Vinod Kothari & Company. She can be contacted at [email protected]] As the financial year 2014-2015 approaches its end, companies are gearing up to meet the “many” requirements pertaining to preparation of board’s report in line with the new Companies Act, 2013 (‘Act, 2013’). Amongst the other...
Report on Bankruptcy Law Reforms
The state of bankruptcy law in India continues to leave much to be desired, and adds to the difficulties in doing business in the country. Several previous efforts have been undertaken towards reforms, but they have either been introduced on a piecemeal basis or have not entirely been successful. With this in mind, the Government had last year appointed the Bankruptcy Law Reform Committee (BLRC)...
Paper on the Historical Evolution of Corporate Law in India
I have posted a paper on SSRN titled “The Evolution of Corporate Law in Post-Colonial India: From Transplant to Autochthony”. The paper seeks to track the evolution of corporate law in India from 1850 all the way until the enactment of the recent Companies Act, 2013, and to examine the different forces which were at play at important points in time that shaped the nature of the law. The abstract...
Bonus Debentures: Features and Implications
[The following post is contributed by Prachi Narayan of Vinod Kothari & Company. She can be contacted at [email protected].] Introduction The reward of being a shareholder is singular: share in profits of the company. A few widely known forms of corporate rewards include cash dividends, bonus shares, preference shares, bonds, debentures, warrants and options, of which cash dividends and...
Briefing on Related Party Transactions
The NSE Centre for Excellence in Corporate Governance has published its quarterly briefing on “Related Party Transactions”, which has been authored by Professor Vikramaditya Khanna. The executive summary is as follows: – Related Party Transactions (RPTs) are a topic of increasing interest around the world, especially as some of them have been associated with quite well known frauds. –...
Derivative Action for Patent Infringement Disallowed
Spicy IP has a post discussing a judgment of the Bombay High Court in Darius Rutton Kavasmaneck v. Gharda Chemicals Limited, which involves a derivative claim by a shareholder of a company that traverses issues of company law and patent law. In disallowing the claim, the Bombay High Court dealt with issues pertaining to derivative actions and clarified circumstances where they would be allowed to...
Disqualification of Directors: A Dichotomy in the Companies Act, 2013
[The following post is contributed by Nivedita Shankar, who is a Senior Associate at Vinod Kothari & Company. She can be contacted at [email protected]] In case a director were to incur disqualification under section 164(2) of the Companies Act, 2013 (the “Act, 2013”), then such director shall not be eligible to be re-appointed as a director of that company or be appointed in other...
Winding-up Petitions and Arbitration Clauses
The relationship between the statutory remedies provided by the Companies Act and the Arbitration Act has proven to be controversial in recent times. The difficulty arises usually because the basis on which the statutory remedy is invoked (eg oppression, winding-up) is often an underlying commercial dispute which is the subject matter of an arbitration clause. The courts have given different...
Proposed Amendments to the Companies Act, 2013
It has been just a year since certain provisions of the Companies Act, 2013 (the 2013 Act) were brought into force, and the Government has already yielded to pressure from industry to address some concerns within the legislation. The Union Cabinet has approved the introduction of the Companies (Amendment) Bill, 2014 in Parliament. At the time of this writing, only a press release of the...
SEBI’s Proposal for a Dividend Policy
Last week, media reports indicated that SEBI is considering imposing a requirement on listed companies to come out with a dividend policy that will compel (or at least nudge) profitable cash-rich companies to distribute their profits to shareholders. The introduction of more stringent requirements on companies to state their dividend policies will introduce a great deal of transparency on this...
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