Tag: Company Law
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Accounting Standards under the New Companies Bill
[Posted by Shantanu Naravane] Recent posts have discussed the issue of ‘true and fair view’ and whether compliance with accounting standards necessary translated into meeting this standard laid down in the Companies Act. This makes it interesting to note that the new Companies Bill, apart from specifically stating that Accounting Standards are mandatory (proposed section…
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Compliance with Accounting Standards and the “True and Fair” View
[Posted by Mihir Naniwadekar] Can it be said that just because the Accounting Standards are not complied with, the accounts of a company do not present a true and fair picture of its financial position? Is compliance with the Accounting Standards mandatory, or are certain deviations justified? The Supreme Court’s observations in JK Industries v.…
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The Legal Aspects of Dual Listings
[Posted by Umakanth Varottil] There has recently been a fair amount of discussion regarding the ability of companies to carry out dual listings in India. This arises in the context of dual listing as a possible structure being considered in the Bharti-MTN transaction. Generally, dual listings occur when two or more companies (that otherwise intend…
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Taxation of non-residents: More controversy
[Posted by V. Niranjan] This blog has covered the controversy surrounding the taxation of Indian companies for engaging services from abroad. A recent decision of the Karnataka High Court has made the law even more difficult to ascertain. The decision is that of a Division Bench of the Court, in Jindal Thermal Power Co. Ltd.…
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SEBI and Corporate Law
[Posted by Umakanth Varottil] Some of the previous posts on this Blog (SEBI prohibits issue of shares with “superior” rights and Shareholders and Their Duties under Indian Law) have generated reactions from readers on a significant issue, which is the role that SEBI has recently been playing in altering provisions of basic company law as…
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Moore Stephens: Extending Protection for Auditors
[Posted by Mihir Naniwadekar] Moore Stephens v. Stone & Rolls might well be the most important case on auditors’ liability since Caparo v. Dickman . The House of Lords, by a narrow majority, extended the protection which Caparo offers to auditors even further. The facts, as detailed by Lord Phillips, were that the sole “directing…
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Companies Bill Reintroduced in Parliament
[Posted by Umakanth Varottil] Last October, the Companies Bill 2008 was introduced in Parliament with a view to simplify and modernize company law by replacing the Companies Act, 1956. However, the Companies Bill lapsed with the dissolution of the Lok Sabha earlier this year due to the general elections. In the meanwhile, corporate India witnessed…
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Corporate Opportunities: A “Scope of Business” Exception?
[Posted by Mihir Naniwadekar] A couple of weeks ago, Corporate Law and Governance highlighted a decision of the Court of Appeal in O’Donell v. Shanahan, reasserting the strictness of a director’s fiduciary duties. A leading decision on the point of the director’s fiduciary duties was Regal (Hastings) v. Gulliver, [1942] 1 All ER 378, where…
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Warrants and Voting
[Posted by Somasekhar Sundaresan] My friend Jayant Thakur posted a critique on July 31 on the recent SEBI Order in the case preferential allotment of warrants to promoters. Umakanth dealt with the element of potential prohibition of voting in areas of conflict of interest on August 1. Here is a piece I wrote in the…
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Shareholders and Their Duties under Indian Law
[Posted by Umakanth Varottil] Under the Companies Act, 1956, shareholding in an Indian company is almost entirely associated with concepts like rights, entitlements and ownership. This emanates from Section 82, which reads as follows: The shares or debentures or other interest of any member in a company shall be movable property, transferable in the manner…