The Companies Act, 2013 introduces some important changes to the company law regime in India. In this post, we shall discuss one such new feature: the class action. The provisions governing class actions are introduced through s. 245 of the Act. These provisions are included under ‘Chapter XVI – Prevention of Oppression and Mismanagement’: however, class actions are evidently not the same as...
Companies Bill Passed by the Rajya Sabha
In a significant development, the Companies Bill, 2012 was passed by the Rajya Sabha (the Upper House of Parliament). The press release of the Government, which terms the event as “historic”, is available here. The new law will come into force once it receives the assent of the President. The Bill had already received the approval of the Lok Sabha (the Lower House) in December 2012. The...
One Person Company – a still-born, half-baked concept?
The Companies Bill 2012 proposes a new concept of One-person Company (OPC). The obvious objective is to overcome the hurdle of needing a second person to form a company, despite the saying that “two’s company”. This brief post is to highlight its nature, some issues and also questioning the real benefit of an OPC. OPC, as the term implies, is a company with one and only one shareholder. The need...
Mandatory imprisonment under Companies Bill 2012
The Companies Bill 2012 has an innocuously titled chapter titled “Miscellaneous” which provides stringent and perhaps unprecedented punishment. The Chapter provides for imprisonment and fine for several types of situations. A minimum imprisonment (six months/three years) is also provided. Clause 447, for example, says that any person found guilty of fraud shall be punishable with imprisonment of...
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