Regulatory Updates: November 2023 | Company, SEBI, RBI & Insolvency Law

In the dynamic landscape of regulatory frameworks, the month of November 2023 has ushered in pivotal changes affecting businesses across various sectors. From revised eligibility criteria for SME migration on the BSE Main Board to significant legal precedents in company law, the landscape is evolving. This introduction sets the stage for an in-depth exploration of key updates in SEBI, RBI, and insolvency laws, offering a comprehensive overview of the transformative regulatory landscape that businesses need to navigate for informed decision-making and compliance.

Securities Law

1. BSE circular to provide revised eligibility criteria for Migration of SME Companies to BSE Main Board w.e.f 1st Jan 2024

a. Listed for at least 3 years on SME platforms, paid up capital more than 10 Cr and market capitalization minimum 25Cr

b. Promoter holding minimum 20% of equity share capital

c. Positive operating profits at least any 2 years along with net worth of 15 Cr in 2 preceding financial year

d. Track record of the company e. no material regulatory action, debarment, disqualification

e. Minimum 250 public shareholders

f. Other parameters like no. of shareholder’s, no proceeding under IBC, no pending investor complaint utilization of funds

• Click here to read the Circular

CASE LAWS

Company Law

1. ROC, Bangalore has passed order for penalizing the company and its four directors since the company failed to appoint at least one resident director.

• M/s Acia Communication Technology (India) Private Limited, a subsidiary company of a Foreign Company named Cisco Systems failed to appoint at least one resident director since incorporation which is mandatory requirement under Section 149 (3) of Companies Act, 2013.
• Section 172 of Companies Act, 2013 prescribes penalty in case of non-compliance of Section 149 (3).

The company failed to appoint at least one resident director from year 2016 till 2021 around 1703 days and later filed suo motto application for adjudication and ROC after hearing parties, imposed penalty of 7 lakhs on company and its four directors.

Read ROC Order: MCA imposes 7 lakh penalty for not appointing resident director

POSH

1. Supreme Court held that courts should focus on procedural irregularities only to the extent of inquiry’s overall fairness and not on minor irregularities.

• In the case of Union of India & Ors v Dilip Paul , Supreme court on 6th December 2023 passed an order stating that sexual harassment at workplace should be viewed as serious matter and cannot be disregarded based on minor procedural
• According to the facts of the case during the pendency of the writ petition before High Court, the Ministry of Home Affairs vide its Order held that the charges of sexual harassment against the respondent are duly proved and imposed penalty. The High Court allowed the writ petition and set aside the order of penalty. The appeal before the SC was filed where a three-judge bench set aside the HC’s order
• Click here to read Detailed Analysis

OTHER UPDATES

1. ICAI Committee on Commercial Laws, Economic Advisory & NPO Corporative has issued FAQ’s on PMLA, 2002.

• ICAI Committee on Commercial Laws, Economic Advisory & NPO Corporative has issued FAQ’s on PMLA , 2002 which includes explanation to the various terms under the PMLA
• The notification also provides definition and clarity on concepts under
• Click here to read FAQ’s

Due Dates under various laws

Conclusion: November 2023 brought significant regulatory changes across company, SEBI, RBI, and insolvency laws. Stay abreast of the BSE’s revised criteria, company law penalties, POSH directives, ICAI’s PMLA FAQs, and important due dates. Ensure compliance and navigate these changes effectively for a resilient and legally sound business environment.