Tag: Companies Act
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The Foibles of a Databank and Proficiency Test for Independent Directors
There is no gainsaying that board independence has come to assume a pivotal position in corporate governance. Although it continues to receive constant criticism on account its ineffectiveness, no one musters the courage to banish it or even diminish its importance. While the concept of independent directors only gradually received the required attention and seriousness…
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Delhi High Court Rules on Disqualification of Directors
In order to address the scores of shell companies in existence, the Ministry of Corporate Affairs (MCA) introduced a range of measures in the wake of the 2017 demonetization exercise. One of them pertains to the disqualification of directors in companies that have failed to file financial statements or annual returns for a continuous period…
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Qualifying test requirements for Independent Directors – a hasty, slipshod & cumbersome requirement
I have written a piece for Moneylife on the new requirements of the Ministry of Corporate Affairs for independent directors that mandate existing as well as first-time independent directors to enrol in a databank as also pass certain qualifying test. The Rules, that are spread over several notifications and also an FAQ, come into force…
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Director Liability: Nexus with Role and not Position
[Pammy Jaiswal is a Partner at Vinod Kothari and Company, and can be reached at corplaw@vinodkothari.com] While there have been an increasing number of rulings on the liability of directors, the question that mostly came up for examination related to their involvement in the day-to-day operations of the company. The liability of non-executive directors has mostly…
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Mergers or Demergers involving Listed Transferor Companies and Unlisted Transferee Companies
[Aishwarya Singh is a lawyer based in Mumbai. The views expressed in the article are personal.] This post discusses the regulatory framework relating to mergers or demergers involving a listed company and an unlisted company, wherein the whole or part of the undertaking, property or liabilities of a listed company, being the transferor company, are…
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MCA Clarifies “Appointed Date” in Schemes of Arrangement
In schemes of arrangement, whether by way of a merger, demerger or other form of corporate restructuring, the timing of when the transaction takes effect becomes important. It is from such a date that the financial statements of the companies involved will reflect the effect of the transaction. Given that the transaction may be completed…
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Financial Statements of Foreign Subsidiaries of Indian Listed Companies
Corporate group structures are common among Indian listed companies which hold shares in subsidiaries both in India and other countries around the world. Due to differences in financial reporting requirements in all jurisdictions where the corporate group is present, the Companies Act as well as regulations issued by the Securities and Exchange Board of India…
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Concept of Retiring Auditors under the Companies Act, 2013
[Munmi Phukon is a Principal Manager at Vinod Kothari & Company, and can be reached at munmi@vinodkothari.com] Five years since the implementation of the Companies Act, 2013 (CA 2013), a common agenda pertaining to appointment/ reappointment of statutory auditors is going to be placed before the shareholders in the ensuing annual general meetings of most…
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The Enforceability of Investor Rights in Indian Private Equity
[Arjya B. Majumdar is an Associate Professor at Jindal Global Law School] Globally, private equity (PE) and venture capital funds are among the primary factors supporting entrepreneurship and furthering growth in companies. These investments are ordinarily made in exchange against some form of minority shareholding in the investee company, such as equity shares or convertible…
