Regulatory updates for the Month of October 2022

Company Law:

1. Supreme court held that appeal for restoration of company’s name can’t be maintained by one whose status as its director is disputed.

Insolvency Law:

1. (IBBI) has issued the IBBI (Model Bye-Laws and Governing Board of Insolvency Professional Agencies) (Second Amendment) Regulations, 2022.

2. NCLAT issues directions for computation of limitation in filing of appeals.

Securities Law:

1. SEBI Penalise   Company   for  failing   to   disclose   updated   policy for determining ‘material subsidiary.

2. SEBI Extends   time   for   entering   details   of   existing   non-Convertible securities into the Distributed Ledger Technology (DLT) system.

3. Structured Digital Database (SDD) Disclosure to stock exchange.

4. SEBI in board meeting has made a decision to put a specific responsibility on Independent directors to justify the pricing in an initial public offering (IPO).

MSME

1. MSMEs shall continue to avail non-tax benefits for 3 years even if there is any upward change in the investment .

POSH

1. Delhi High court held that the Friend with legal background can’t represent man facing sexual harassment at workplace enquiry.

COMPANY LAW

1. Supreme court held that appeal for restoration of company’s name can’t be maintained by one whose status as its director is disputed.

• In the matter of m/s Basanti Cotton Mills (1998) Private Limited, Supreme court held that an appeal for restoration of the name of the company struck off by ROC as defunct cannot be maintained by one whose status as director of the defunct company was disputed and not evident from documents filed with ROC when the company’s name was borne out on records of
• Striking off order passed by RoC cannot be altered in absence of proper identity of Complainant

INSOLVENCY LAW 

1. (IBBI) has issued the IBBI (Model Bye-Laws and Governing Board of Insolvency Professional Agencies) (Second Amendment) Regulations, 2022.

• The amended regulation mandated the filing of annual compliance certificate to the Board. The amended regulation also prescribe the penalty for non-compliance with the
• IBBI (Model Bye-Laws and Governing Board of Insolvency Professional Agencies) (Second Amendment) Regulations, 2022

2. NCLAT issues directions for computation of limitation in filing of appeals.

• NCLAT held that applicant has to mandatory file all the applications and appeals in hard copy also along with e-filing receipt. And same is also consider for computation of limitation.

SECURITIES LAW

1. SEBI Penalises Company for failing to disclose updated policy for determining ‘material subsidiary. 

• SEBI has imposes a penalty of Rs. 5 lakh on a Company for failing to make disclosure in respect of un-updated policy for determining ‘material subsidiary’ and on modification of terms of appointment of auditors of material subsidiaries, thereby violating the provisions of a SEBI Circular and of 4(1)(e) of the LODR Regulations.

2.  SEBI Extends time for entering details of existing non- Convertible securities into the Distributed Ledger Technology (DLT) system. 

• SEBI has extended the timeline by one month for entering the details of the existing outstanding non-convertible securities into the Distributed Ledger Technology (DLT) system e. on or before October 31, 2022. Earlier, this was to be complied by September 30, 2022.
• SEBI extends timeline of entering details of existing outstanding non-convertible securities

3. Structured Digital Database (SDD) Disclosure to stock exchange.

• Reg 3(5) of SEBI (PIT) Regulations, 2015 which required Structured Digital Database (SDD) to be maintained by the company capturing all the details regarding UPSI. In this regard, companies are required to submit a quarterly compliance certificate on the letter head of the company and certified by the compliance officer of the company or Practising Company secretary in the format as provided by the
• SDD is applicable for trading in equity shares and equity derivative Companies in the process of listing also to maintain SDD.
• SOP under SEBI (PIT) Regulations, 2015 for compliance with SDD

4.  SEBI in board meeting has made a decision to put a specific responsibility on Independent directors to justify the pricing in an initial public offering (IPO). 

• Regulator has proposed a committee of independent directors (IDs) justify the IPO-pricing band, using quantitative means. The pricing band will then be compared with the weighted average cost of acquisition of prior primary issuances and secondary transactions in the
• 14 Key decisions taken by SEBI in its Board Meeting on 30.09.2022

POSH

1. Delhi High court held that the Friend with legal background can’t represent man facing sexual harassment at workplace enquiry. 

• Delhi High Court held that allowing a person facing a sexual harassment enquiry before a company’s Internal Complaint’s Committee (ICC) to be represented by a “friend” with a “legal background”, who is not registered as an advocate, would be prejudicial to the
• Intent of rule 7(6) of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Rules is to disallow a legal practitioner from representing the parties at any stage of the proceedings

MICRO, SMALL AND MEDIUM ENTERPRISES DEVELOPMENT ACT 2006

1. MSMEs shall continue to avail non-tax benefits for 3 years even if there is any upward change in the investment .

•  Now MSMEs shall continue to avail all non-tax benefits of the category (micro or small or medium) for a period of 3 years from the date of an upward change in terms of investment in plant and machinery or equipment or turnover or
• MSME benefit after upward change in investment in machinery or turnover or both?DUE DATES

Due Dates under various laws 

Disclaimer

This newsletter is a compilation of updates prepared and circulated from the academic point of view only and are not intended to constitute professional advice on any matter. The views and opinions expressed in this newsletter are those of the author of this document and are based on the internal research done by the Author.