[Ambika Mehrotra is a Manager at Vinod Kothari & Company in its Corporate Law Services Division] In the interest of investors in the securities market and with a view towards better corporate governance, the Securities and Exchange Board of India (“SEBI”) has taken steps to widen the scope of compliances for listed entities. Accordingly, to bring in more transparency for investors, SEBI has...
Increasing the Ambit of Rights Available to Voting by Proxy
[Vishal Hablani and Anirudh Goyal are 3rd & 4th Year B.A.L.L.B. (Hons.) students respectively at the West Bengal National University of Juridical Sciences, Kolkata] Under the proxy system of voting, a shareholder delegates his rights to attend and vote at a meeting to another person as his representative. This representative is known as the proxy. The system of proxy voting has statutory...
Where We Stand On Shell Companies
[Tishya Saran and Aayush Grover are both 5th year students of Government Law College, Mumbai] Background Continuing its crackdown on shell companies, the Government has promulgated the Companies (Amendment) Ordinance, 2018 (the “Ordinance”), with effect from 2 November 2018. The Ordinance, amongst other things, seeks to enhance accountability for non-filing of charges, maintenance of documents...
Filing of Form PAS-4 in Private Placements
[Deepansh Guwalani is a 5th year student at ILS Law College, Pune] Introduction Private placement in India is regulated by section 42 of the Companies Act, 2013 (the “Act”) and rule 14 of the Companies (Prospectus and Allotment of Securities) Rules, 2014 (the “Allotment Rules”). The said laws have undergone a recent change by way of the Companies (Amendment) Act, 2017 and the Companies...
Law on Corporate Opportunity: India at Crossroads
[Angad Singh Makkar is a 4th year BA LLB (Hons.) student at Jindal Global Law School in Sonipat, Haryana] The equitable rule of corporate opportunity, which aims to balance the fiduciary duty owed by a director to the company and the director’s serving of individual entrepreneurial interests, has been varyingly applied across several jurisdictions. Most notably, while the courts in the United...
NCLT on Scheme of Arrangement and Tax Avoidance
Background Schemes of arrangement have been a useful method of implementing mergers and acquisitions in the Indian context. Historically under the Companies Act, 1956, schemes were supervised by the High Courts, but the Companies Act, 2013 conferred that jurisdiction upon the National Company Law Tribunal (NCLT). Under the regime set forth in the 1956 Act, the High Courts had adopted a largely...
Reclassification of Non-Compoundable Offences under the Companies Act, 2013: Impact on Section 203
[Radhika Parthasarathy is a 4th Year B.A. LL.B. (Business Law Honours) Student at National Law University, Jodhpur] Introduction The Committee to Review Offences under the Companies Act, 2013, was set up by the Ministry of Company Affairs in July 2018 to recommend the recategorization of acts that have been, for so long, cognizable offences under the Companies Act, 2013 [the “Act”]. The Report of...
Forum for Adjudicating Disputes Regarding Allotment of Shares
The issue of whether a civil court or the National Company Law Tribunal (NCLT) has jurisdiction over disputes regarding allotment of shares in a company came up for consideration before the Delhi High Court in SAS Hospitality Pvt Ltd v Surya Constructions Pvt Ltd. In its order dated 16 October 2018, the Court found that the NCLT has exclusive jurisdiction over such a dispute. The plaintiff, SAS...
Impact Analysis of Committee Recommendations on Offences under the Companies Act
[Gaurav Pingle is a practising Company Secretary in Pune and can be reached at [email protected]] The Government of India had constituted a Committee to review the existing framework dealing with offences under the Companies Act, 2013 (‘Act’) and related matters. The Committee was also required to make recommendations to promote better corporate compliance. The Committee submitted its final...
Madras High Court Grants Reprieve to Disqualified Directors
The Madras High Court in Bhagavan Das Dhananjay Das v. Union of India (decided on 3 August 2018 and accessible via Judis) struck down the order of the Registrar of Companies, Chennai (“RoC) which had disqualified a number of directors from their position in various companies. The Court was considering a large group of writ petitions that various disqualified directors had filed before it. In...
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