[Shalin Ghosh is a 3rd year B.A., LL.B. (Hons.) student at Maharashtra National Law University, Mumbai] Capital reduction is a common mode of financial restructuring for a company. It is a useful tool for companies to reduce accumulated losses and achieve an optimal capital structure. Organizationally, it is a popular route to provide an exit to minority or dissenting shareholders from a company...
Identifying the Real SBO: A critique of the LinkedIn and Samsung Orders
[Chirag Motwani and Ananya Badaya are 4th year law students at Hidayatullah National Law University, Raipur] A “significant beneficial owner” (“SBO”) is an individual who directly or indirectly controls a company or substantially holds beneficial interest in the company and whose name is not registered as a holder of shares in the books of the company. Section 90 of the Companies Act, 2013...
Protection against Self-incrimination and Section 217 of the Companies Act, 2013: Navigating Constitutional Waters
[Shriya Chakravarthy and Mrigank Pathak are alumni of Gujarat National Law University, Gandhinagar, and have previously served as Law Clerks at the Supreme Court of India. They are presently practising at the High Court of Karnataka and the Supreme Court of India respectively] Under the Companies Act, 2013 (“the Act”), the procedures for inspection, inquiry, and investigation have been laid down...
Managerial Remuneration – Should Promoters Be Disenfranchised?
[Bharat Vasani is Senior Advisor – Corporate Laws and Miloni Mau an Associate in the General Corporate Practice, both at the Mumbai office of Cyril Amarchand Mangaldas. An earlier version of this post was published on the Cyril Amarchand Mangaldas Blog] The Government of India’s socialistic approach towards controlling managerial remuneration between 1960s and 1990s has been a painful chapter in...
When a Rights Issue becomes Oppressive: A Look at Byju’s Recent Controversy
[Rituraj Singh Parmar and Priyam Indurkhya are 4th year B.A., LL.B. (Hons.) students at National Law Institute University, Bhopal] Think & Learn Private Limited, popularly known as Byju’s, has been facing several legal battles nationwide. In February 2024, the investors of Byju’s filed a petition for oppression and mismanagement with the National Company Law Tribunal, Bengaluru (“NCLT”). The...
Downstream Investments by FOCCs – Resolving the Regulatory Conundrum
[Roshan Cyriac is a 4th-year B.A., LL.B. (Hons.) student at NALSAR University of Law, Hyderabad] Foreign investors can invest in India directly through foreign direct investment (FDI) or through an entity owned and controlled by it (FOCC). An FOCC is a company incorporated in India but owned and controlled by a (non-resident) foreign company. When a non-resident transfers shares in Indian...
Navigating the Twilight Zone Conundrum: A Cautionary Tale for Restructured Preference Shareholders
[Snigdha and Subhasish Pamegam are 3rd year B.A., LL.B. students at Gujarat National Law University, Gandhinagar] The practice of companies issuing restructured preference shares (RPS) in exchange for operational debt during the ‘twilight zone’, a period wherein a company is susceptible to becoming insolvent, is now seen as a controversial strategy. The order of the National Company Law Tribunal...
Calcutta High Court on Jurisdiction in Shareholder Disputes under Companies Act: An Aberration?
[Abhijnan Jha is a Partner and Urvashi Misra a Senior Associate at AZB & Partners, New Delhi] It is trite law that where a statute prescribes something to be done in a particular manner, then it ought to be done in that manner alone and not in any other manner. This is a well-recognized position, with courts having the duty to filter out any misguided attempts by litigants to bypass statutory...
Holding-Subsidiary Relationship: The Legal & Regulatory Architecture
[Bharat Vasani is Senior Advisor – Corporate Laws and Miloni Mau an Associate in the General Corporate Practice, both at the Mumbai office of Cyril Amarchand Mangaldas. An earlier version of this post was published on the Cyril Amarchand Mangaldas Blog] As their businesses grow, companies operate through their subsidiaries for various reasons such as flexibility in operation of different units...
Whether a “Sale of Shares” Amounts to a “Sale of an Undertaking”: Has the Conundrum Been Resolved?
[Bharat Vasani is Senior Advisor – Corporate Laws and Varun Kannan an Associate in the General Corporate Practice, both at the Mumbai office of Cyril Amarchand Mangaldas. An earlier version of this post was published on the Cyril Amarchand Mangaldas Blog] “What would constitute an ‘undertaking’ of a company” has been among the most hotly debated topics in the history of India’s company law regime...
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