MCA exemption notification paves way for limitless deposits from members, by Vinita Nair

Deposits have always been strictly regulated by all the law makers, be it MCA, RBI or SEBI. Chapter V of Companies Act, 2013 (‘Act, 2013’) read with Companies (Acceptance of Deposits) Rules, 2014 [‘Deposit Rules’] provides the framework for lawful acceptance of deposits by companies. The framework provides list of amounts which do not fall within the meaning of deposits, compliances to be ensured for accepting deposits from members and compliances to be ensured for accepting public deposits by eligible companies. Read more

Exemption notification for Section 8 Company

MCA vide notification dated 5th June, 2015[1] (‘Principal Notification’) exempted Section 8 companies from complying with certain provisions of the Companies Act, 2013 (“Act, 2013”) subject to the condition that the company will ensure protection of shareholder’s interests. MCA vide notification dated June 13, 2017[2] (’Amendment Notification’) made certain amendments in the principal notification which has been analysed Read more

Government Companies compliant in annual filings eligible to avail MCA exemptions, by Dipanjali Nagpal

At the time of its notification, Companies Act, 2013 (‘Act, 2013’) was applicable uniformly across all types of companies. Respite was brought about by the MCA notification dated June 5, 2016[1] (‘Principal Notification’) which provided that certain provisions of the Act, 2013 shall not apply or shall apply to government with such exemptions, modifications or adaptions as provided therein. Read more

Transfer to be by operation of law under IEPF –Taken long time to clarify; still clarification awaited!

Introduction

MCA has added yet another Circular to the throng of circulars w.r.t. IEPF vide its general circular no 07/2017 dated 5th June, 2017[1]. It provides that companies may, for transferring the shares to IEPF, follow the procedure as in the case of transmission. Read more

When can a nominee director be interested, by Nitu Poddar

Nominee directors are usually appointed by the financial institutions or investors (”Nominator”) on the board of the borrower company for the purpose of representing and safeguarding their interest thereof. Such Nominee directors are liable to perform duty towards the borrower company and its stakeholders under section 166 and other provisions of the Companies Act, 2013 and also towards its Nominator for representing and safeguarding its interest. Read more

Effectiveness of Appointed Date in a Scheme of Arrangement, by Vallari Dubey

Background

Every time a new Act is introduced, it brings with itself a fresh set of regulations. The Companies Act, 2013[1] (‘the Act’) is one astounding example of the same. What makes this Act stand out is the fact that it replaced decades old Companies Act, 1956. With the Act in force, several erstwhile concepts have been modified, replaced or even struck down; some new concepts have been drawn in with much emphasis on the peculiarity of present economic scenario in the country. Though, substantial portion of the Act has replaced the old version; some matters hold the same attributes, mutatis mutandis along with specific inclusions clarifying what was always assumed to subsist. One such matter pertains to the concept of ‘Appointed Date’ and ‘Effective Date’ in any Scheme of Arrangement vis. Scheme of Amalgamation/Merger/Demerger. Read more

Date extended again for transfer of shares to IEPF

The MCA has once again extended the time for transferring the shares to the IEPF demat account in view of the modality gap present. The circular clearly states that since the operational issues are yet to be finalized with the other participants, the date for transferring shares is being extended.

After number of circulars on trying to simplify the whole process of transfer of shares, it does not seem to actually simplify the task, moreover such extensions raise high doubts in the minds of the stakeholders on how realistic the transfer of shares would actually be.

The circular also states that all the corporates are advised to complete all the formalities in relation to transfer without waiting for any fresh dates. This implies that companies which have almost completed all the formalities on their part can without any doubt finish off the residual formalities like issuing duplicate share certificates and making entries in the register. Such extension surely does not provides the scope to the shareholders whose shares are to be transferred to have an extended time to come and claim dividend from the company beyond the time provided in the notices.

Further, for many companies time has come to give notice to the shareholders whose dividend is lying unclaimed from the financial year 2009-10. At such a stage when the first tranche of transfer has not been done, corporates wonder on how the upcoming events will turn out to be in connection with such transfer.

Link to the circular- http://www.mca.gov.in/Ministry/pdf/GeneralCircular6_29052017.pdf

 

Author:  Pammy Jaiswal

Associate

Vinod Kothari and Company

Majority Shareholders: New Dictators in a Democratic Institution by Parul Bansal

In this era, where the country is going through immense economic growth, more and more investors are coming up with the intention to invest in the equity of the companies. Such investments lead to acquisition of interest and rights by the investors in the company. Intention of every investor varies from each other. Where one invests with the intention to earn short term profit by trading in the securities of the company, the other may invest with an intention of long term investment and enjoying the dividend ownership and / or controlling rights over the company. While each and every investor does not participate into the everyday affairs of the business, however, with the level of transparency being visualised, each investor, especially, the long term investors surely have a crucial role to play in the company. Read more