TagCompany Law

Supreme Court on the Relationship between Insolvency and Winding-up Proceedings

[Akhil Kumar is a Fourth Year BA LLB (Hons.) student and Ayushi Singh a Third Year BA LLB (Hons.) student at NUALS, Kochi] The Insolvency and Bankruptcy Code, 2016 has amended several provisions of the Companies Act, 2013 through the eleventh schedule of the Code. This has, on a few occasions, led to several uncertainties regarding the application of the amended provisions to various company...

SEBI Consults on Shares with Differential Voting Rights

Dual class share (DCS) structures are becoming more popular around the world. While they have been existent in several companies in the United States (US) for some decades now, they were accompanied sometimes by a sense of unease among investors and regulators due to the disparity they create between economic rights (level of ownership) of shareholders and their control rights (voting). Since the...

Do the Companies (Significant Beneficial Owners) Amendment Rules, 2019 Narrow the Scope of these Rules?

[Aditi Tomar is a 4th Year B.A.LLB (Hons.) Student at NALSAR University of Law, Hyderabad] The Companies (Significant Beneficial Owners) Rules, 2018 (“Rules”), which were notified on 14 June 2018, aimed to trace the ultimate individual or natural person who holds beneficial interest, i.e., exercises rights and entitlements in the company, by looking through the complex layers of the corporate...

Amendment to the Companies (Significant Beneficial Owners) Rules, 2018: An Analysis

[Niharika Sharma is a IV Year, B.A. LL.B. (Hons.) student at the National Law School of India University, Bangalore] In June 2018, the Ministry of Corporate Affairs (‘MCA’) issued the Companies (Significant Beneficial Owners) Rules, 2018 (‘SBO Rules’) and notified section 90 of the Companies Act, 2013 (‘2013 Act’). This was to curb the illicit activities (such as money laundering) being carried...

The (Ambiguous) Position of Chairman Emeritus in Corporate Governance

[Priya Garg is a 5th year student at West Bengal National University of Juridical Sciences (WBNUJS), Kolkata] When Ratan Tata, the then Chairman Emeritus of the Tata Group of companies, allegedly exercised his influence over the Group’s directors to dethrone its then Chairman, Cyrus Mistry, because of the former’s dissatisfaction with the latter’s functioning,[1] a new corporate governance issue...

Disclosure Regarding Significant Beneficial Owners: Another Stride from SEBI

[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...

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