[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...
Ascertaining Legal Ramifications of Compensation Agreements- Part III (In Search of Common Law Defences to Statutory Violations)
[The following post, the third in a series, has been contributed by Rahul Sibal, 4th year student of NALSAR Hyderabad. The first two posts in the series are available here and here.] In the previous post it was argued that section 166 of the Companies Act, 2013 (the ‘Act’), which partially codified the common law doctrines of no-conflict and no-profit, did not provide for consent-based...
Restrictions on Layering of Subsidiaries Now Effective
In two earlier posts published in July (here and here), our guest contributors had voiced their trenchant criticism of the Government’s move to introduce restrictions of the ability of companies to create layers of subsidiaries. After a round of consultation, the Ministry of Corporate Affairs (MCA) has decided to implement the restrictions, which have now been brought into force. The MCA has...
Conversion of Tata Sons into a Private Limited Company: In Whose Interest?
The proposed conversion of Tata Sons Limited from a public limited company to a private limited company has reignited the corporate governance issues that the Tata Group has faced over the last year or so. Menaka Doshi has an interesting piece (and an accompanying interview with two corporate lawyers) in BloombergQuint that sets out some of the background to why Tata Sons proposes (and that too...
The Tata Corporate Governance Episode: The ‘India-Specific’ Issues and Concerns
[Guest post by Priya Garg, a 4th year law-student at West Bengal National University of Juridical Sciences (WBNUJS)] Introduction The recent turf battle within the Tata Group is likely to become a subject matter of study for various disciplines, including the subject of corporate law and governance.[1] The Tata-Mistry dispute giving rise to corporate governance issues needs to be considered...
Object Clause under the Companies (Amendment) Bill: A Flip-Flop
[Guest post by Naman Kamdar, a 5th year BA LLB student at National Law University Odisha] The Companies (Amendment) Bill, 2017 was introduced in Parliament to usher in more changes to the recently amended Companies Act, 2013 (the “Act of 2013”). The Bill seeks to make substantial changes in the pattern of trade and commerce in the country by liberalizing the procedures and requirements for...
McDonald’s Case: NCLT Decision on Oppression
[Guest post by Enakshi Jha, who is a graduate from NALSAR University of Law and is currently working at a corporate law firm in Mumbai] McDonalds India has recently been in the news for shutting down 43 of its 55 Delhi outlets. The bone of contention leading to this event is the ongoing dispute between Mr. Vikram Bakshi and McDonalds India Private Limited (“MIPL”). This case has clarified that...
Arbitrability of Oppression and Mismanagement in India
[Guest post by Aishwarya Singh, 5th year student at Jindal Global Law School] Background Sections 241 and 242 of the Companies Act, 2013 (“CA, 2013”) provide the National Company Law Tribunal (“NCLT”) the present day authority to deal with the petitions pertaining to oppression and mismanagement. Under the previous Companies Act, 1956 (“CA, 1956”), this power was exercised by the Company Law...
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