Tag: Company Law
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Securitisation and Debt Recovery – A Centre-States Conflict?
[Posted by V. Niranjan] The Constitution has devised an elaborate scheme of distribution of legislative powers, and the competence of a legislature to enact a law has normally been challenged by a private citizen to whom the law applies. The latest battleground looks to be the fairly recent structure of securitization, debt recovery and other…
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Proposal for Uniform Par Value on Shares
[Posted by Umakanth Varottil] In a previous post, we discussed the difficulties posed by the current system of par value of shares whereby companies are free to determine the par value of their shares. Some of these difficulties will be addressed in SEBI’s proposal to create a uniform par value system for all listed companies.…
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Proposal for “Golden Share”
[Posted by Umakanth Varottil] Business Standard reports that the Government is considering investing in the “golden share” in infrastructure projects. The report states: “The “golden share”, which will be owned by the government, will ensure that it has a say in all major decisions taken by the private concessionaire. It will also obviate the need…
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Companies Bill, 2008: No advisory services by auditors
[Posted by Mihir Naniwadekar] One of the important measures taken in the Companies Bill, 2008 is to prevent Chartered Accountants from offering actuarial, advisory and management services to companies which have engaged them as statutory auditors. Section 127 of the Bill provides: An auditor appointed under this Act shall provide the company only such other…
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Shares and Stocks: India and Delaware
[Posted by Umakanth Varottil] India has largely followed the scheme of the erstwhile British company law in enacting the Companies Act, 1956. This is true even in the case of share capital structures that companies can have, such as only two types of shares, preference shares and equity shares for public limited companies, and also…
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Ceiling on Executive Pay
[Posted by Umakanth Varottil] In previous posts, we had highlighted significant differences between the law on executive pay in the US and in India, and how the Indian regime may be more conducive to preventing excesses by corporate executives. In the US, the position is as follows: Excessive managerial influence also extends to fixing managers’…
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Lifting the Corporate Veil for Tort Claims
[Posted by Umakanth Varottil] As we have seen previously (here and here), the law relating to lifting of the corporate veil is not only ridden with several ambiguities, but also that courts are generally slow to lift the corporate veil. This holds true even in cases that involve mass torts against subsidiaries of large corporate…
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Supreme Court on ‘Allotment of Shares’ and ‘Issue of Bonus Shares’
[Posted by Mihir Naniwadekar] In a recent judgment (Khoday Distilleries v. CIT, Civil Appeal 6654/2008, judgment of 14 November 2008), the Supreme Court explained some important corporate law concepts. The issues before the Supreme Court arose out of a matter under the Gift Tax Act, 1958; and the Supreme Court had to elaborate upon the…
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Companies Bill: New Entities
[Posted by Umakanth Varottil] The Companies Bill, 2008, which has been introduced in the Lok Sabha, contains two entities that are fairly novel in the Indian corporate scenario, and it might be useful to briefly discuss these two types of entities. They are: (i) one person company (OPC); and (ii) “small” company. One Person Company…