MCA paves way for e-adjudication of penalties, extends C-PACE for LLPs strike off
-Lavanya Tandon, Executive & Shreshtha Barman, Executive | corplaw@vinodkothari.com
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Insider Trading Framework for Mutual Funds and other Pooled Investment Vehicles
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1. Mutual Fund units now under the net of insider trading regulations
2. FAQs on Insider Trading Framework for Mutual Funds
3. FAQs on Structured Digital Database
4. Prohibition of Insider Trading – Resource Centre
5. SEBI proposes to widen the definition of Connected Persons
SEBI widens the definition of ‘Connected Persons’ for facilitating enhanced enforcement against insider trading
Last updated on December 10, 2024
Team Corplaw | corplaw@vinodkothari.com
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Class Action Suits in India: A Journey of Challenges and Potential
Mahak Agarwal | corplaw@vinodkothari.com
Background
Investor protection provisions have been an inherent part of company laws in India. Whether it be S.34 of the Companies Act, 2013 (‘the Act’) imposing criminal liability on directors/ promoters in case of misrepresentation in prospectus, S.35 which imposes civil liability on persons involved in mis-statement of prospectus, S. 36 which imposes criminal liability on any person who fraudulently inducing persons to invest money and so on.
Following the Satyam fiasco in India, investor protection gained further light and the Company Law Bills of 2009 as well as 2011 contained provisions for introducing class actions as a measure available to the members and depositors of the company if the affairs of the company are conducted in a manner prejudicial to the interest of the company, or its members and depositors. However, it was only in 2016 that the same was introduced under S.245 of the Act.
Read more →Scaling up skilling by using CSR funds: Any takers?
Employment & Skilling has been identified as one of the top priorities for Vikshit Bharat in the Union Budget, 2024. To this end, the Govt has proposed a scheme that looks novel and innovative, and would supposedly encourage top 500 companies to use their CSR funds for providing internships to eligible youth. However, even if a large company takes 100 interns, it will use only Rs 6 lakh [100 X Rs 5000 X 12 – 90% govt. share] out of its CSR budget, which is trivial for a company of that size.
More details will possibly be rolled out over time, from whatever is available, it seems there is quite a lot of procedure for companies, who may opt for this scheme only at their discretion.
Read more →Bye bye to Share Buybacks
– Finance Bill 2024 puts buybacks to a biting tax proposal w.e.f. 1st October, 2024
-Team Corplaw | corplaw@vinodkothari.com
Among the tax law changes proposed by Finance Bill, 2024, the one on share buybacks, explained as one intended to remove tax inequity, is perhaps the most unexplainable. The proposed change, by introduction of a new sub-clause (f) to section 2 (22) [deemed dividend], and simultaneous amendments to sec. 46A and sec. 115QA, not only shifts the tax burden from companies to shareholders, but surprisingly, brings to tax the entire amount paid on buyback, irrespective of the excess realised by the shareholder. It leaves the cost of shares to be claimed as capital loss and set off against potential capital gains, of course only if such gains arise within the prescribed timelines for carry forward and set off.
Buyback of shares is the only way a company seeks to scale down its capital. The proposed amendment makes it impossible for companies to reduce their capital base by returning capital not needed, as the only other way is through reduction of share capital, which is subject to shareholders’, creditors’, and NCLT approval. It is surprising that this amendment by the very same Budget which proposes to introduce the novel concept of “variable capital companies”.
Read more →MCA rationalizes critical Companies Act forms
– Team Corplaw | corplaw@vinodkothari.com
Stock brokers to detect mule accounts, set up systems to detect fraud and market abuse
SEBI amends regulations after 6 years of Fair Market Conduct committee’s recommendation
-Garima Chugh, Executive | corplaw@vinodkothari.com
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Disclosure requirements w.r.t. debt securities | Amendments in LODR & NCS Regulations
SEBI eases investing norms for NRIs, OCIs, and RIs through FPI route in IFSC
-Surabhi Chura | corplaw@vinodkothari.com
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