Tag: Companies Act
-
NCLT Finds Cross-Border Demergers Impermissible under the Companies Act
[Posted by Umakanth Varottil] An important question arose before the National Company Law Tribunal (NLCT), Ahmedabad bench. Are only cross-border mergers and amalgamations permitted under section 234 of the Companies Act, 2013 (the “Act”), or does the provision also encompass cross-border demergers and other similar transactions? The NCLT answered that the scope of section 234…
-
Setting Up To Fail: The Amended Significant Beneficial Ownership Rules
[Ayush Kashyap is a IV year law student at Hidayatullah National Law University, Raipur] The Companies (Significant Beneficial Owners) Amendment Rules, 2019 suffer from a problem relating to the computation of significant beneficial ownership and disclosure requirements thereon. With the compliance deadline for these rules already lapsed, a look at the problem is in order.…
-
Some Comments on NCLAT’s Ruling in the Tata-Mistry Case
[Posted by Umakanth Varottil] Last week, the National Company Law Appellate Tribunal (NCLAT) pronounced its ruling in the Tata-Mistry case. It held that the removal of Mr. Cyrus Mistry as executive chairman by the board of Tata Sons was illegal, and called for his reinstatement to that position. It also decided that consequential actions taken…
-
Schemes of Arrangement: Setting a Date
[Rudra Shankar is a fifth-year BA LLB (Hons.) student at Symbiosis Law School, Pune] The procedure for mergers and demergers of companies in India is governed by sections 230 to 232 of the Companies Act, 2013. Companies are required to approach the National Company Law Tribunal (NCLT) to obtain its sanction to such schemes of…
-
The Foibles of a Databank and Proficiency Test for Independent Directors
[Posted by Umakanth Varottil] 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…
-
Delhi High Court Rules on Disqualification of Directors
[Posted by Umakanth Varottil] 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…
-
Qualifying test requirements for Independent Directors – a hasty, slipshod & cumbersome requirement
[Posted by Jayant Thakur] 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…
-
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…
-
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…