Tag: Company Law
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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…
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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…
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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,…
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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…
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Forum for Adjudicating Disputes Regarding Allotment of Shares
[Posted by Umakanth Varottil] 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,…
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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 gp@csgauravpingle.com] 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…
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Madras High Court Grants Reprieve to Disqualified Directors
[Posted by Umakanth Varottil] 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…
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NCLT Order Facilitates Cross-Breeding of Entities
[Pammy Jaiswal is a Partner at Vinod Kothari and Company] Background Earlier under the Companies Act, 1956 (the ‘Act, 1956’), sections 391 to 394 dealt with provisions relating to compromises, arrangements, amalgamation and reconstruction. The said provisions were re-cast under the Companies Act, 2013 (the ‘Act, 2013’) under sections 230 to 234. The statutory provisions…
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Doctrine of ‘Reverse’ Piercing and the Jurisprudence of Indian Courts
[Debarshi Chakraborty is a 3rd year B.A., LL.B. student at National Law University Odisha.] The doctrine of ‘reverse’ piercing, although relatively new, is a controversial area of corporate law. This doctrine could be problematic given the situations where a body corporate has multiple shareholders. Conversely, there have been times even in relation to companies with one…
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Corporatisation Prospects for Unregistered Entities: Amendment to Section 366 of the Companies Act, 2013
[Pammy Jaiswal is a Partner at Vinod Kothari and Company] Background By virtue of the enforcement notification of the Ministry of Corporate Affairs (‘MCA’) dated 5 July 2018, the proposed change under section 75 of the Companies (Amendment) Act, 2017 (‘Amendment Act’) relating to section 366 of the Companies Act, 2013 (‘Act, 2013’) has been…