TagCompany Law

Analysis of the Strike-Off Provisions under the Companies Act, 2013

[Utsav Mitra is a 3rd year B.A. L.L.B student from The National Law Institute University, Bhopal] Strike Off is a method prescribed under sections 248-252 of the Companies Act, 2013 (the “Act”). These provisions have been notified by the Ministry of Corporate Affairs by way of a notification dated 26 December 2016. They provide an opportunity for defunct companies to get their names removed from...

Supreme Court on Delay in Filing Appeal from Orders of the NCLT

[Maneck Mulla is the Proprietor of M Mulla Associates, Mumbai] In Bengal Chemists and Druggist Association Vs Kalyan Chowdhury, the Supreme Court discussed the provisions of section 421 of the Companies Act, 2013 (the Act) which provides for filing of an appeal from orders of the National Company Law Tribunal (NCLT) within a period of 45 days with a further grace period of 45 days, (i.e. 90...

A Curious Case of ‘Public Interest’ in Indian Corporate Law

[Abhijeet Singh Rawaley is a Bar Council of India Trust Scholar and a III Year B.A., LL.B. (Hons.) Candidate at NALSAR, Hyderabad With inputs from Shreenath A. Khemka, a King’s Law Scholar pursuing an LLM at the University of Cambridge] This post comments on section 396 of the [Indian] Companies Act, 1956 (carried forward as section 237 in the Companies Act, 2013). The comment critiques the...

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...

Can a Company ‘Selectively’ Reduce its Capital?

[Shikha Rawal is an Associate at a law firm in Mumbai. The views in this post are personal.] Over the years, several companies have increasingly resorted to selective capital reduction as a means of share capital management. A reduction of capital often involves the reduction of the same proportion of the shares of the company on similar terms and conditions offered to each shareholder whose...

Compulsory Amalgamation: the Bombay High Court on the FTIL-NSEL case

In 63 Moons Technologies Ltd. v. Union of India (and connected petitions), the Bombay High Court considered important questions of law going to the heart of Indian corporate law. The case involved a challenge to an order of the Central Government under s. 396 of the Companies Act, 1956. Purporting to act under s. 396, the Central Government had amalgamated the National Spot Exchange Ltd. (“NSEL”)...

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...

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