Tag: Company Law
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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…
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Promoter Cannot Initiate Restructuring Scheme for Insolvent Company
[Posted by Umakanth Varottil] In an earlier post, I had noted the revival of the scheme of arrangement as a restructuring tool for companies that have been taken into liquidation under the Insolvency and Bankruptcy Code, 2016 (IBC). In the cases discussed therein, the adjudicatory authorities sought to encourage the parties to use the scheme…
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Power to Dispense with Meetings of Shareholders and Creditors in a Scheme of Arrangement
[Anirban Chanda is a 4th Year B.A., LL.B. Student at Jindal Global Law School. The author is grateful to Anujay Shrivastava for his inputs] For a very long time, there was an ambiguity regarding the National Company Law Tribunal’s (NCLT) power to dispense with the meetings of shareholders and creditors in an amalgamation or arrangement,…
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“Group of Companies” Doctrine & Post-Negotiations in the Context of an Arbitration Agreement
[Achyutha GM and Pranika Correa are students at the Gujarat National Law University] The Supreme Court’s decision in Reckitt Benckiser (India) Pvt. Ltd. v. Reynders Label Printing India Private Limited on 1 July 2019 is a bittersweet journey for the doctrine of “group of companies”. The Court’s refusal to implead the foreign subsidiary saw the…
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Recommendation of Independent Directors in a Takeover: Need for a Relook
[Shreya Goyal is a 4th student at the West Bengal National University of Juridical Sciences, Kolkata] The SEBI (Substantial Acquisition of Shares and Takeover) Regulations, 2011 govern the acquisition of shares in listed companies in India. These Regulations (and their predecessors) have been tested during many corporate takeover battles in India. In the recent takeover…
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SEBI’s Consultative Paper: A Step towards a Stricter Regime for Auditor Resignation
[Shreshtha Mathur is a fourth year law student at National Law University, Jodhpur] A statutory auditor is appointed by a company according to the statutory requirement, in order to inspect and form an opinion about the fair presentation of a company’s accounts. Section 139 of the Companies Act, 2013 mandates that every company must appoint an…
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Liquidation Regulations: Far-Reaching Changes to Make Liquidations Faster, Smoother
[Vinod Kothari is an insolvency practitioner at Vinod Kothari & Co and can be reached at resolution@vinodkothari.com] The attention that reforms in liquidation regulations has received, relative to what has gone into the case of resolution, is far lesser than deserved, given the percentage of the resolution cases that slip into liquidation. Most of the major…
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Insolvency Proceedings for Conglomerate: Questions and Way Forward
[Piyush Rathi and Saksham Agrawal are 4th Year B.A. L.L.B students at NALSAR University of Law] A majority of large scale businesses today grow around a parent company that branches out into a group of companies, each of which performs a specific function. Such a structure in the form of a conglomerate provides for administrative convenience to…
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Shareholding Patterns and Director’s Duty of Loyalty: Comparative Analysis of India and the US
[Ishani Mookherjee is a 3rd year B.A. LLB (Hons.) student at Jindal Global Law School] The Delaware Supreme Court, in Cede v. Technicolor Inc., examined the applicability of the business judgment rule in the United States (US). For a business decision to be protected by this rule, two conditions have to be satisfied – the duty…
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The Enforceability of Investor Rights in Indian Private Equity
[Arjya B. Majumdar is an Associate Professor at Jindal Global Law School] Globally, private equity (PE) and venture capital funds are among the primary factors supporting entrepreneurship and furthering growth in companies. These investments are ordinarily made in exchange against some form of minority shareholding in the investee company, such as equity shares or convertible…