April 2019 – Dawn of a New Era in Indian Corporate Governance?
October 2, 2019
2018 was an eventful year for the corporate governance regulatory framework in India. The Securities and Exchange Board of India (SEBI) not only approved a host of recommendations made by the Kotak Committee on Corporate Governance (Kotak Committee), but also gave these recommendations the required regulatory impetus by notifying the Securities and Exchange Board of […]
Ministry of Corporate Affairs Circulars – Are They Legally Enforceable?
October 2, 2019
The Ministry of Corporate Affairs (MCA) has been entrusted with the responsibility of administering the Companies Act, 2013 (Act). The MCA, from time to time, issues circulars and clarifications to clarify the provisions of the Act and the rules made thereunder (Rules). For example, in the first year of operation of the Act, the MCA […]
Is Liquidation Irreversible? Schemes of Compromise or Arrangement for Companies in Liquidation
October 2, 2019
The 2005 Report of the Expert Committee on Company Law (JJ Irani Committee Report) had noted that an effective insolvency law: “should strike a balance between rehabilitation and liquidation. It should provide an opportunity for genuine effort to explore restructuring/ rehabilitation of potentially viable businesses with consensus of stakeholders reasonably arrived at. Where revival / rehabilitation is […]
Top 20 Banking Terms that a Corporate Lawyer should Know About
September 30, 2019
Image source: https://bit.ly/2Wz1Jxt The following is a list of terms that are typically used in the banking sector of the country PCA (Prompt Corrective Action) The prompt corrective action (“PCA”) framework is simply a corrective measure plan which is used to intervene early so as to restore the financial health of banks that are at […]
All You Need to Know About Equity Financing
September 30, 2019
Introduction With the turn of the 18th century, it ushered us in the industrial revolution. There was a rapid expansion of capacity, coupled with the modernisation of the industrial unit to satisfying insatiable human wants. The traditional system of labour being employed as the dominant source of industrial production i.e. more the worker, larger the productivity. […]
Corporate Criminal Liability
September 30, 2019
Introduction Corporations have a separate legal entity and they are treated as a separate personality in law. And therefore, separate liability can be imposed on corporations from any criminal liability which may be imposed on the individual members for any wrongdoing. The legal maxim upon which the basic rule of criminal liability stands is “actus non […]
Valuations of Mergers and Acquisitions
September 30, 2019
Introduction Valuing the financial aspect of an M&A transaction is crucial. Without proper financial analysis, regardless of how lucrative the strategic and business merits of a deal may be, it is impossible to quantify the potential shareholder value creation embodied in the deal. This article will go over the various methodologies for valuing publicly traded […]
Position, Appointment & Powers of Directors under the Companies Act, 2013
September 30, 2019
A corporation is an artificial person which is intangible and invisible. For making any decision and to have knowledge and intention, a living person has a mind and hands by which he carries out his actions. But a corporate body being an artificial person has none of these. So it needs to act through a […]
Corporate Veil: All you should know!
September 30, 2019
Introduction Once a business is incorporated according to the provisions laid out in the Companies Act of 2013, it becomes a separate legal entity. An incorporated company, unlike a partnership firm, which has no identity of its own, has a separate legal identity of its own which is independent of its shareholders and its members. […]
Winding Up of a Company
September 30, 2019
Introduction Winding Up of a Company means to bring an end to the life of the company. A distinct feature of a company is Perpetual Succession which means that the longevity of the company does not depend on its members or their financial status. Even if all the members of the company go bankrupt […]
Who is Liable for Misstatements in Prospectus?
September 30, 2019
Introduction The purpose of this article is to examine the liability for misstatements in the prospectus of a company. Before going to the details of liability, a brief overview of the meaning and significance of the prospectus would be helpful. What is a prospectus? Pursuant to section 2(70) of the Companies Act, 2013, prospectus is […]
Whole Time Director providing Consultancy Services to the Company
September 26, 2019
Introduction Section 2(94) of the Companies Act provides that “whole-time director” includes a director in whole-time employment of the company. A whole-time director is an executive director. As per clause2(k)of Companies (Specification of definitions details) Rules, 2014, “Executive Director” means a whole-time director as defined in clause (94) of section 2 of the Act. The […]
Lifting of Corporate Veil
September 26, 2019
Introduction Once a business is incorporated according to the provisions laid out in the Companies Act of 2013, it becomes a separate legal entity. An incorporated company, unlike a partnership firm, which has no identity of its own, has a separate legal identity of its own which is independent of its shareholders and its members. […]
Appointment, Role, Functions, and Removal of Company Secretary in India
September 26, 2019
Introduction Similar to Hindu Religion which has 3 main deities namely Brahma, Vishnu and Mahesh, the corporate sector in India is aided by 3 powerful professionals – Chartered Accountant (“CA”), Company Secretary (“CS”) and Cost Accountant. In spite of the fact that CS’s have received statutory recognition almost 4 decades back, the role of […]
Nidhi Amendment Rules, 2019 – Everything You Need to Know
September 26, 2019
What are Nidhi companies? The word Nidhi means ‘Treasure’ in Hindi. As the name suggests, it relates to finance and funds. Nidhi Companies are governed by the Nidhi Rules, 2014 (the ‘Rules’) and are incorporated under the Companies Act, 2013 (the ‘Act’). As per Section 406 of the Act, Nidhi companies are incorporated with the goal of inculcating the […]