Tag: Company Law
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Preferential Allotment of Securities in Unlisted Companies
The Ministry of Corporate Affairs (MCA) has announced draft rules that will, when promulgated, substitute the Unlisted Public Companies (Preferential Allotment) Rules, 2003. This will make the process of issue of securities more stringent for unlisted public companies. The Indian Legal Space blog has a nice comparison of the existing rules and the proposed changes.…
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Public Financial Institutions under Section 4A of the Companies Act, 1956: MCA Circular
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Electronic Communication and Meetings under the Companies Act
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Lifting the Corporate Veil for Tax Purposes
The judgment of the Bombay High Court rendered last year in the Vodafone Case favours the revenue when it comes to imposition of tax by the Indian authorities on sale of shares in an offshore company that has a substantial stake in an Indian company. While an appeal in the Vodafone Case is pending before…
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Offering of Securities: Public or Private?
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The Romalpa Clause and Bankruptcy Protection
To a supplier or, more generally, to any commercial entity involved in the initial stages of a supply chain, protecting itself in the event of the bankruptcy or change in constitution of its principal buyers is a matter of great importance. It is therefore commonplace to find clauses in a contract creating, for example, a…
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MCA Circular on Prosecution of Directors
One of the disincentives that operate against directors, particularly non-executive directors, is that they are often susceptible to prosecution for offences committed by the company that it not within their knowledge. Occasionally, innocent directors have been subject to victimization by requiring to answer allegations that are often frivolous in nature. This concern has now been…
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Streamlined Procedure for Incorporation of Companies, etc.
(The following post has been contributed by Rohan Bagai) The Ministry of Corporate Affairs, Government of India (“MCA”) has recently notified a General Circular No. 6/2011 dated March 8, 2011 (the “Circular”) simplifying the procedure for incorporation of companies and establishment of principal place of business in India by foreign companies. In this regard, MCA…
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Supreme Court on Tainted Securities
In Varghese Joseph v The Custodian, the Supreme Court was called on to clarify the approach to be adopted in relation to tainted securities under the Special Court (Trial of Offences relating to Transactions in Securities) Act, 1992. Although there is not much by way of company law principles of even statutory interpretation to be…
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MCA grants exemption from attaching subsidiary accounts
Section 212 of the Companies Act, 1956 requires holding companies to attach with its balance sheet, a copy of the balance sheet, profit and loss account etc., of each of its subsidiaries. In recent years, with the globalization of the Indian economy, there has been a large increase in the number of holding companies and…
