Archive for category: Companies Act 2013

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 →

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

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 →

Introduction

MCA vide its notification dated 28^th February, 2017 had tried to simplify the modus operandi for transferring shares to the IEPF Authority. In doing so, it had left various questions unanswered. For instance, Rule 6 of the Investor Education and Protection Fund Authority (Accounting, Audit, Transfer and Refund) Amendment Rules, 2017 (‘IEPF Amendment Rules’) stated that companies would be required to transfer the shares to the IEPF demat account. However, the same did not mentioned anything regarding the expected time frame by which such accounts would open or what would be the modalities of transfer at the depository level. As a result of which corporates kept wondering on the ways to effect the transfer of shares to the IEPF account.

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