Independent Director

Independent Directors – Companies Act, 2013 & SEBI (LODR) Regulations, 2015

Company Law - Independent Directors – Companies Act, 2013 and SEBI (LODR) Regulations, 2015 Independent Directors are non-executive Directors who do not have any material or pecuniary relationship with the Company. The Provisions pertaining to Independent Directors as specified under the Companies Act, 2013 and SEBI (Listing Obligations and Disclosur...

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Extension of Various Compliances By Ministry of Corporate Affairs

Company Law - The Ministry of Corporate Affairs has made a further effort to encourage a greater deal of “Ease of doing business”, the Ministry of Corporate Affairs has enhanced the timeline regarding the duration of several schemes till the end of the year 2020 in the wake of constant disturbance caused by the coronavirus pandemic in certain p...

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7 Due dates extended by MCA to 31st December, 2020

Company Law - Extension of due dates for various Schemes, Registration as Independent Director, DIR-3 KYC, holding EGM, till 31st December, 2020 by the Government of India...

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Extension of timelines for various Company Law compliances under Companies Act, 2013

Company Law - Keeping in view the practical difficulties being faced on account of Covid-19, MCA to facilitate Ease of doing business has granted following reliefs to Companies/LLPs by way of Circulars and Amendments to Rules dated 28.09.2020: 1. Extension of Companies Fresh Start Scheme, 2020 (CFSS): CFSS Scheme which was to end on 30.09.2020 Vide Gen...

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Extension of CFSS, LLP Settlement & Various Schemes Till 31.12.2020

Company Law - The Ministry of Corporate Affairs introduced several schemes {Companies Fresh Start Scheme, 2020 (CFSS) General Circular No. 30/2020, LLP settlement Scheme 2020 General Circular No. 31/2020, Scheme for relaxation of time for filing forms related to creation or modification of charges under the Companies Act, 2013 General Circular No. 33/2...

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MCA Extended duration of several Schemes till 31.12.2020

Company Law - MCA on 28.09.2020, vide various circulars and notification extended the date of various schemes to 31.12.2020 which were launched for ease of doing Business, Schemes extended are as follows:- 1. Companies Fresh Start Scheme, 2020 2. LLP Settlement Scheme, 2020 3. Scheme for relaxation of time for filing forms related to Creation or Modifi...

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DIN-3 replaced by DIR-3C – ICSI

Company Law - Companies which do not have any of their Directors/Signatory details registered in the MCA2 1 system and who are desirous of filing DIR-3C Form are advised to get atleast one authorised signatory registered by contacting the concerned Registrar of Companies. ROCs have been requested by the MCA to allow entry of details from their offices ...

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Independent Directors liable for penal action (including for frauds)

Company Law - The concept of Independent Director has been proposed in the Companies Bill, 2009. Clause 147 of the Bill, provides for duties of directors which include the duty to act in good faith in best interest of company, to act with due and reasonable care, skill and diligence, to avoid any conflict of interest, to desist from achieving any undue...

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Govt changes norms to protect independent directors

Company Law - Independent directors will not be hauled up for the acts undertaken by companies without their consent or knowledge, as per the new norms announced by the government. "We have directed the Registrar of Companies (RoC) not to take any penal action against those independent directors who are not actively involved in the decision making proc...

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CAP financial benefits earned by independent directors

Company Law - There should be a cap on the pecuniary benefits earned by independent directors serving on boards of companies, according to Mr N. Ramanathan, Managing Director, Ponni Sugars. At a panel discussion on issues relating to board of directors and indepen...

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NI Act | Section 138 Proceedings Not Maintainable against Independent Non-Executive Directors

Sunita Palta & Ors. Vs Kit Marketing Pvt. Ltd. (Madras High Court) - Sunita Palta & Ors. Vs. Kit Marketing Pvt. Ltd. (Madras High Court) Non-Executive Directors are, therefore, persons who are not involved in the day-to-day affairs of the running of the company and are not in charge of and not responsible for the conduct of the business of the company.’ Adm...

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Companies (Appointment and Qualification of Directors) Fourth Amendment Rules, 2020

Notification No. G.S.R. 589(E). - (28/09/2020) - MCA extends time for Compliances required by Every individual who has been appointed as an independent director in a company, on the date of commencement of the Companies (Appointment and Qualification of Directors) Fifth Amendment Rules, 2019 (I.e. 1st December 2019) , shall within a period  of 13...

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Time for registration of Independent Directors extended to 31.12.2020

Notification No. S.O. _ (E) - (22/09/2020) - The Ministry of Corporate Affairs has also extended the time within which Independent Directors of companies have to register themselves on the databank maintained by the IICA from 30.09.2020 to 31.12.2020. Government of India Ministry of Corporate Affairs Notification New Delhi, the 22nd August, 20...

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Companies (Appointment and Qualification of Directors) Second Amendment Rules, 2020

Notification No. G.S.R. 268 (E) - (29/04/2020) - MCA has issued Companies (Appointment and Qualification of Directors) Second Amendment Rules, 2020 which are applicable from 29th April 2020 and by this Registration of details of Independent Directors in Independent Directors Data Bank who were director on 1st December 2019 is been allowed till 30...

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Circular on Applicability of service tax on commission paid to Managing Director/Directors by the company

Circular No. 115/09/2009 - ST - (31/07/2009) - Payments termed as ‘commission’ made to a Managing Director/ Directors, whether whole-time or independent, would not be ‘commission’ as envisaged under the Service Tax category of Business Auxiliary Services. Hence, payments of commission made to the Managing Director/ Directors would not be...

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Recent Posts in "Independent Director"

Independent Directors – Companies Act, 2013 & SEBI (LODR) Regulations, 2015

Independent Directors – Companies Act, 2013 and SEBI (LODR) Regulations, 2015 Independent Directors are non-executive Directors who do not have any material or pecuniary relationship with the Company. The Provisions pertaining to Independent Directors as specified under the Companies Act, 2013 and SEBI (Listing Obligations and Disclosur...

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Posted Under: Company Law |

Extension of Various Compliances By Ministry of Corporate Affairs

The Ministry of Corporate Affairs has made a further effort to encourage a greater deal of “Ease of doing business”, the Ministry of Corporate Affairs has enhanced the timeline regarding the duration of several schemes till the end of the year 2020 in the wake of constant disturbance caused by the coronavirus pandemic in certain p...

Read More
Posted Under: Company Law |

7 Due dates extended by MCA to 31st December, 2020

Extension of due dates for various Schemes, Registration as Independent Director, DIR-3 KYC, holding EGM, till 31st December, 2020 by the Government of India...

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Posted Under: Company Law |

Extension of timelines for various Company Law compliances under Companies Act, 2013

Keeping in view the practical difficulties being faced on account of Covid-19, MCA to facilitate Ease of doing business has granted following reliefs to Companies/LLPs by way of Circulars and Amendments to Rules dated 28.09.2020: 1. Extension of Companies Fresh Start Scheme, 2020 (CFSS): CFSS Scheme which was to end on 30.09.2020 Vide Gen...

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Posted Under: Company Law |

MCA Extended duration of several Schemes till 31.12.2020

MCA on 28.09.2020, vide various circulars and notification extended the date of various schemes to 31.12.2020 which were launched for ease of doing Business, Schemes extended are as follows:- 1. Companies Fresh Start Scheme, 2020 2. LLP Settlement Scheme, 2020 3. Scheme for relaxation of time for filing forms related to Creation or Modifi...

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Posted Under: Company Law |

Extension of CFSS, LLP Settlement & Various Schemes Till 31.12.2020

General Circular No. 30/2020, 31/2020, 32/2020, 33/2020 (28//0/9/20)

The Ministry of Corporate Affairs introduced several schemes {Companies Fresh Start Scheme, 2020 (CFSS) General Circular No. 30/2020, LLP settlement Scheme 2020 General Circular No. 31/2020, Scheme for relaxation of time for filing forms related to creation or modification of charges under the Companies Act, 2013 General Circular No. 33/2...

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Posted Under: Company Law |

Companies (Appointment and Qualification of Directors) Fourth Amendment Rules, 2020

Notification No. G.S.R. 589(E). (28/09/2020)

MCA extends time for Compliances required by Every individual who has been appointed as an independent director in a company, on the date of commencement of the Companies (Appointment and Qualification of Directors) Fifth Amendment Rules, 2019 (I.e. 1st December 2019) , shall within a period  of 13 Months from such commencement (i.e. upt...

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Time for registration of Independent Directors extended to 31.12.2020

Notification No. S.O. _ (E) (22/09/2020)

The Ministry of Corporate Affairs has also extended the time within which Independent Directors of companies have to register themselves on the databank maintained by the IICA from 30.09.2020 to 31.12.2020. Government of India Ministry of Corporate Affairs Notification New Delhi, the 22nd August, 2020 S.O. _ (E).- In exercise of the power...

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Appointment & Re-Appointment of Independent Director

INDEPENDENT DIRECTOR- An independent director is a non-executive director of a company who brings in objectivity and independence in the decision making by the Board of Directors of the company. As an independent director, he should not be related to the promoters of the company. He should not have any pecuniary interest in the company, [...

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Posted Under: Company Law |

How to enroll on independent director’s data bank & pass exam

How to enroll on independent director’s data bank and pass examination for independent director My article is related to preparation of exam of independent director. In this article I am trying to help my Profession colleagues or others who want to pass their exam and wish to add his/her name in the database of independent […...

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Posted Under: Company Law |

Independent Director- Provisions under Companies Act, 2013

1. Section 149 (4) and rule 4 of Companies (Appointment & Qualification of Director) Rule, 2014 1. Every listed company shall have at least 1/3rdof total No. of directors as Independent Director, and 2. Following classes of companies shall have at least 2 Directors as Independent Director- In case of Public Company having – i. [&hel...

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Posted Under: Company Law |

Relaxations related to Board meetings & Independent Directors

 Further relaxations by the Ministry of Corporate Affairs till September 30, 2020 for conduct of Board meetings to approve its financial statements through VC or OAVM and registration of Independent Directors in the Independent Directors Data Bank....

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Posted Under: Company Law |

Independent Director -Brief Background for Databank Registration

‘Independent directors’ is a very important topic and there are various interpretation issues which everyone faces while explaining or reading the topic but still we have good examples which will ensure to understand this concept in a better manner. It’s a Great Move of Ministry of Corporate Affairs which do regulates the fu...

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Posted Under: Company Law |

All about Independent Directors- (Part-2)

In continuance of the earlier article, ‘All about Independent Directors- (Part-1)‘, this article will focus on the independent director databank and the process of appointing an independent directors. On 22nd October, 2019 the Ministry of corporate affairs (MCA) published the Companies (Appointment and Qualification of Directo...

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Posted Under: Company Law |

All about Independent Directors- (Part-1)

An independent director is a member of the board who: -is a non-executive director of a company, -does not haveany kind of relationship with the company that may affect his/ her independence, -is not involved in day to day activities of the company, -helps the company in improving corporate credibility and governance standards. The compan...

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Posted Under: Company Law |

Independent director eligibility – Companies Act & SEBI (LODR) Regulations

Eligibility criteria for appointment as an Independent Director As per Section 2(47) of the Companies Act, 2013, ‘independent director’ means an independent director referred to in sub-section (5) of section 149. Comparison of Eligibility to be appointed as independent director under section 149 of companies act and Regulation...

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Posted Under: Company Law |

New Independent Directors Rules under Companies Act 2013

♣ Independent Director (Define): Means an independent director referred to in Section 149(6). ♣ Applicability of Independent Director Provisions : Listed Company The Public Companies having paid up share capital of 10cr or more; or The Public Companies having turnover of 100cr or more; or The Public Companies which have, in aggregate,...

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Posted Under: Company Law |

Independent Director under Companies Act, 2013 in India

As per Rule 4 of the Companies (Appointment and Qualification of Directors) Rules, 2014, the following classes of companies shall have at least 2 directors as independent directors:- (i) the Public Companies having paid up share capital of ten crore rupees or more; or (ii) the Public Companies having turnover of one hundred crore ru...

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Posted Under: Company Law |

Independent Directors- Applicability, Meeting, Disclosures

Section 149 of Companies Act 2013 deals with Appointment and Qualification of Directors. Same Section also contains Provisions related to Appointment of Independent Directors. 1. Applicability of Independent Directors (“IDs”): All Listed Companies All Public Companies having a. Turnover is Rs. 100 cr or more b. Aggregate Outstanding l...

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Posted Under: Company Law |

Appointment of Independent Director in Public Company

Appointment of an Independent Director 1. Call and convene meeting of Nomination and Remuneration Committee. The Nomination and Remuneration Committee of the Company shall with a due diligence select and recommend an Individual to be appointed as an Independent Director after ensuring that there is appropriate balance of skills, experienc...

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Posted Under: Company Law |

Companies (Appointment and Qualification of Directors) Second Amendment Rules, 2020

Notification No. G.S.R. 268 (E) (29/04/2020)

MCA has issued Companies (Appointment and Qualification of Directors) Second Amendment Rules, 2020 which are applicable from 29th April 2020 and by this Registration of details of Independent Directors in Independent Directors Data Bank who were director on 1st December 2019 is been allowed till 30th June 2020. Revised rules now provide ...

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An independent director’s online self-assessment test as on today

Companies Act, 2013 section 150 introduces one to selection of independent director through a data bank maintained by any body, institute or association etc. Just now I passed with flying colors the self-assessment test conducted by Indian Institute of Corporate Affairs to join 1950 other qualified professionals who offer themselves as in...

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Posted Under: Company Law |

Independent Director under Companies Act 2013 and Rules

WHO IS AN INDEPENDENT DIRECTOR? Independent Director is Director other than a managing director or a Whole time Director or a nominee Director who fulfils all criteria as given in Section 149(6) along with Rule 4 and Rule 5 of the Companies (Appointment and Qualification of Directors) Rules, 2014. In general sense, an independent director...

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Posted Under: Company Law |

NI Act | Section 138 Proceedings Not Maintainable against Independent Non-Executive Directors

Sunita Palta & Ors. Vs Kit Marketing Pvt. Ltd. (Madras High Court)

Sunita Palta & Ors. Vs. Kit Marketing Pvt. Ltd. (Madras High Court) Non-Executive Directors are, therefore, persons who are not involved in the day-to-day affairs of the running of the company and are not in charge of and not responsible for the conduct of the business of the company.’ Admittedly, the petitioners are neither the...

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All You Need To Know About Independent Directors Databank and MCA Exam

On 22nd October 2019 Ministry of Corporate Affairs (MCA) issued the Companies (Creation and Maintenance of databank of Independent Directors) Rules, 2019 regarding the creation and maintenance of databank of independent directors. These rules came into force on 1rst December 2019. Indian Institute of Corporate Affairs has been given th...

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Posted Under: Company Law |

Independent Director Registration

Ministry of Corporate Affairs (MCA) vide its Notification number G.S.R. 804(E) dated 22nd October, 2019 had amended the Companies (Appointment and Qualification of Directors) Rules for Registration of Independent Directors in the databank within 3 months effective from 1st December, 2019 by applying online to the Indian Institute of Corp...

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Posted Under: Company Law |

Partial Relief to Independent Directors from Prosecution

MCA vide Circular No. 01/2020 dated 02nd March, 2020 has issued the following Standard Operating Procedure (SOP) to all Registrars with respect to prosecutions or internal adjudication proceedings against Independent Directors (IDs), non-promoters and non-KMP non-executive directors (NEDs). BACKGROUND: The Ministry has specifically laid e...

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Posted Under: Company Law |

Understanding responsibilities and importance of independent director in a company

Article explains Importance of independence of independent directors, Recognition And Importance Of Independent Director Under Company Law, Role of Independent Director in CSR Committee, Role of Independent Director in Board meeting, Role of Independent Directors in this Meeting, Role of Independent Director in Audit Committee, Role of In...

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Posted Under: Company Law |

Databank of Independent Directors

Independent Directors serve as an important Institution of corporate governance contributing significantly at the boards by bringing a diverse set of skills with an independent judgement on the significant issues. Independent Directors need to act as the custodians of good governance by discharging monitoring and advisory role effectively...

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Posted Under: Company Law |

Process of empanelment of Independent Directors in the Data Bank

Indian Institute of Corporate Affairs (IICA) have introduced an online databank for all existing and aspiring Independent Directors. The databank has been originated from the Companies (Appointment and Qualification of Directors) Fifth Amendment Rules, 2019 issued by the Ministry of Corporate Affairs on 22/10/2019. As per the said rules, ...

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Posted Under: Company Law |

Compliances Required by a Person Eligible And Willing to be Appointed as an Independent Director

. Every individual existing Independent Directors (ID) shall within a period of three months from commencement of the Companies (Appointment and Qualification of Directors) Fifth Amendment Rules, 2019 and every individual who intends to get appointed as an ID after such commencement shall, apply online to the Indian Institute of Corporat...

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Posted Under: Company Law |

Data Bank registration & Online Proficiency test for Independent Directors

Brief note on Data Bank registration and Online Proficiency test for Independent Directors Ministry of Corporate Affairs (MCA) has issued  an Online Proficiency Self-Assessment test  for Independent Directors vide notification dated 22.10.2019. MCA has also notified Companies (Creation and Maintenance of Databank of Independent Director...

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Posted Under: Company Law |

How to Surrender Director Identification Number (DIN)

HAVING TWO DINs WHAT TO DO AND HOW TO CHECK IF ONE IS HAVING TWO DINs? This article is especially for the person who has obtained more then 1 (One) DIN at any time. We came to know that Regional Director (Noida) has issued "Show Cause Notice U/s 266G of the Companies Act, 1956" to more than 2 Lac Persons. ...

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Multiple DIN- Show Cause Notice U/s. 266G of Companies Act 1956

These days quite some number people are getting Show Cause Notice under section 266G of the Companies Act 1956. What’s this notice all about? As per Section 266C of the Companies Act 1956, No individual, who had already been allotted a Director Identification Number under Section 266B, shall apply, obtain or possess another Director Id...

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Posted Under: Company Law |

Director’s service to Company or Body Corporate

Clause 1.1 With effect from 1.7.2012, any service provided by a director who is non executive, nominee and independent directors to the company, thus on such activity carried service tax is payable. Under are the justifications for clarity. Section 65B(44) of the Finance Act, 1994 as introduced w.e.f 01.07.2012 is produced as follows: ...

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Posted Under: Company Law |

All about Independent Directors under Companies Act,2013

The new concept of having Independent Director is a welcome step for corporate governance in India. The Act, 2013 has conferred greater empowerment upon Independent Director’s to ensure that the management & affairs of a company is being run fairly and smoothly....

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DIN-3 replaced by DIR-3C – ICSI

Companies which do not have any of their Directors/Signatory details registered in the MCA2 1 system and who are desirous of filing DIR-3C Form are advised to get atleast one authorised signatory registered by contacting the concerned Registrar of Companies. ROCs have been requested by the MCA to allow entry of details from their offices ...

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Posted Under: Company Law |

DIN to be mentioned with Director’s Signature compulsorily wef 01.04.2014

DIN to be mentioned with Director’s Signature (Section 158) Now, Director’s name & DIN (Director Identification Number) has to be mentioned with their signature on all the documents to be signed in the capacity of director. PENALTY: – Company and every officer of the company who is in default or such other person shall be punis...

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DIN Approval by Professionals: A Wrong Initiative of MCA (Personal View Point)

I am writing this article on approval of DIN after two years of notification by MCA regarding approval of DIN by Professionals. I am not against the process of MCA to simplify the incorporation procedure as these simplified procedures are assisting us to cope up with the developing world and I know that we should accept simplified procedu...

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Posted Under: Company Law |

Independent Directors under the Proposed Companies Bill, 2011

With a view to add transparency, fairness and independence in decision making to safeguard of stakeholders’ interest, the concept of Independent Directors was introduced. While the concept was till date applicable on Listed Public Companies, the New Company Law proposes to introduce the same upon big Public Companies as well. ...

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Posted Under: Company Law |

Checklist & Resolutions for Appointment of Managing Director

The following are the steps involved in appointment of Mr. A as Managing Director in a Company who is not an Managing Director in any other Company: 1- Convene Board Meeting, appoint Mr. A as Additional Director and pass resolution for appointment as Managing Director (sample of resolution specified hereunder) and fix date and appr...

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Independent Directors liable for penal action (including for frauds)

The concept of Independent Director has been proposed in the Companies Bill, 2009. Clause 147 of the Bill, provides for duties of directors which include the duty to act in good faith in best interest of company, to act with due and reasonable care, skill and diligence, to avoid any conflict of interest, to desist from achieving any undue...

Read More
Posted Under: Company Law |

Govt changes norms to protect independent directors

Independent directors will not be hauled up for the acts undertaken by companies without their consent or knowledge, as per the new norms announced by the government. "We have directed the Registrar of Companies (RoC) not to take any penal action against those independent directors who are not actively involved in the decision making proc...

Read More
Posted Under: Company Law |

CAP financial benefits earned by independent directors

There should be a cap on the pecuniary benefits earned by independent directors serving on boards of companies, according to Mr N. Ramanathan, Managing Director, Ponni Sugars. At a panel discussion on issues relating to board of directors and indepen...

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Posted Under: Company Law |

Companies Bill 2009-Independent director’s short tenure a constraint in building a relationship of trust

The Companies Bill 2009 has dealt with independent directors quite extensively. The Standing Committee has spent significant time on issues relating to independent directors as evident from the report of the Committee. This shows the criticality of the effectiveness of independent directors in corporate governance....

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Posted Under: Company Law |

Working of independent Directors in Central Public Sector Enterprises

The Government has said that the Department of Public Enterprises has so far not issued any guidelines regarding the assessment of working of non-official Directors on the Board of Central Public Sector Enterprises (CPSEs)....

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Posted Under: Company Law |

Role of independent directors will be clarified in new Companies Bill

The role of independent directors (IDs) on the board of Indian companies will be clarified in the new Companies Bill and their responsibilities will be made finite in terms of what they are answerable for, said Union Corporate Affairs Minister Salman Khurshid....

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Posted Under: Company Law |

Selection & appointment of independent directors in state-owned companies may get easier

A parliamentary panel of experts studying the new Companies Bill is likely to come up with suggestions in this regard, said a corporate affairs ministry official, requesting anonymity. The development assumes significance in the wake of the government’s renewed efforts to quicken the share sales of many state-owned firms that are hamstr...

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Posted Under: Company Law |

Provision to Appoint Independent Directors governed by clause 49 of the Listing Agreement not by Companies Act

The Government has said that the Companies Act, 1956 does not provide for appointment of Independent Directors. But, as per clause 49 of the Listing Agreement, all the listed companies are required to appoint Independent Directors. Giving this information in written reply to a question in the Lok Sabha today, the Minsiter for Corporate Af...

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Posted Under: Company Law |

Government may empower independent directors and company secretaries to enforce corporate governance norms

The government may empower independent directors and company secretaries to enforce corporate governance norms, having made compliance voluntary for enterprises. The Institute of Company Secretaries of India (ICSI), a statutory body set up by the government, has suggested a set of best practices that company secretaries on board of compan...

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Posted Under: Company Law |

Guidelines for independent directors sought by ICAI and ICSI

The Institute of Chartered Accountants of India (ICAI) and the Institute of Company Secretaries of India (ICSI) have urged the government to lay down guidelines for independent directors, including their terms of appointment, responsibilities and tenure in the company....

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Posted Under: Company Law |

No proposal for any upper cap on the number of independent directors: Union Government

The Companies Bill, 2009 has not proposed any upper cap on the number of independent directors, but, sub-clause (3) of clause 132 of the Companies Bill, 2009 provides that at least one-third of total directors shall be independent directors to be appointed in every listed company having certain amount of paid up capital to be prescribed b...

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Posted Under: Company Law |

Governments likely to introduce a fixed time-frame for nomination of independent directors in state-run companies

With the aggressive disinvestment of PSUs being planned for the coming months, the government is likely to introduce a fixed time-frame during which the nomination of independent directors should be completed by state-run companies....

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Posted Under: Company Law |

ICSI recommended to fix the limit for maximum number of listed companies where one can be a director to seven

The Institute of Company Secretaries of India (ICSI) has recommended to the Government that the maximum number of listed companies where one can be a director be restricted to seven. ICSI has also mooted capping the tenure of independent directors at six years. In its report on ‘Strengthening Corporate Governance Framework' submitted to...

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Posted Under: Company Law |

Form One person company (OPC) after implementation of the Companies Bill 2009

A man is known by the company he keeps. But with the implementation of the Companies Bill 2009, a single person will constitute a Company, under the One Person Company (OPC) concept.As a structure for professionals, individual entrepreneurs, SMES and NGOs – the proposed Section 171 extends to Section 25 Companies as well – this is a g...

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Posted Under: Company Law |

Independent Directors — Corporate governance in challenging times

While in most of the countries in the world, the top executives are trying to survive their jobs and positions and while this is the first time when maximum CEOs are hated by their shareholders, the independent Directors are trying to run away from their current position. One of the reports of Economic Times says that, since Satyam scanda...

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Posted Under: Company Law |

Proposal to pay salary to independent directors subject to attendance of 70% Board meetings

The government is examining a proposal seeking to split the compensation package of independent directors into fixed and variable components to ensure they play an active role in the affairs of companies. The variable component will be linked to the attendance at the board meetings, an official with the minsitry of corporate affairs told ...

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Posted Under: Company Law |

ICSI proposes 7-Company cap on maximum number of directorship in listed companies

The maximum number of listed companies in which an individual can serve as a director should not be more than seven, proposed the Institute of Company Secretaries of India (ICSI) to the ministry of corporate affairs (MCA). The proposal came in the light of ICSI view that a director needs to spend enough time to understand a company if he ...

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Posted Under: Company Law |

Companies Bill, 2009 will have provisions for Class Action suits which will allow investors to seek compensations from companies

The Corporate Affairs Minister, Mr Salman Khurshid, on Wednesday said that the Companies Bill, 2009 will also have provisions for Class Action suits that will allow investors to seek compensations from companies. At a workshop to discuss the Bill, Mr Khurshid said, “Compensation cases in India are a long-drawn-out process, with few succ...

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Posted Under: Company Law |

Circular on Applicability of service tax on commission paid to Managing Director/Directors by the company

Circular No. 115/09/2009 - ST (31/07/2009)

Payments termed as ‘commission’ made to a Managing Director/ Directors, whether whole-time or independent, would not be ‘commission’ as envisaged under the Service Tax category of Business Auxiliary Services. Hence, payments of commission made to the Managing Director/ Directors would not be subject to Service Tax....

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ICAI president advocates more power for chartered accountants

Uttam Prakash Agarwal, president of Institute of Chartered Accountants of India (ICAI), has been in focus lately, handling queries on the role of auditors in the Satyam Computer fiasco. Agarwal, who is also chairing the six-member high-level committee set up by ICAI to look into the Satyam scandal, talked to Vivek Seal of DNA on […...

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Posted Under: Company Law |

Are Independent directors really independent?

More than seven of 10 independent directors sitting on the boards of listed companies to improve corporate governance are “home” members, while only few women make it to such positions, says a study.”Nearly 75 per cent of all independent directors are ‘home’ members who are natural allies of the promoters are...

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Posted Under: Company Law |

Satyam's independent directors get clean chit from SFIO

Independent directors of Satyam  were not involved in the multi-crore accounting fraud in the IT company and were kept in the dark by founder-chairman B Ramalinga Raju, the Serious Fraud Investigation Office has concluded. The over 14,000-page report submitted to the government, marking the end of three month-long investigation, the prob...

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Posted Under: Company Law |

66% Indian Companies do not have policy for rotation of the members of their audit committees

In the case of one third of every mid cap company in India, the roles of the chairman and managing director or CEO were played by the same person. A majority of such companies (66%) do not have a policy for rotation for the members of their audit committees....

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Posted Under: Company Law |

ICAI plan to scrutinise books of companies that have seen independent directors resign in the last two months

THE Institute of Chartered Accountants of India (ICAI), the regulatory body for the accounting profession, plans to scrutinise books of companies that have seen independent directors resign in the last two months, after the role of such directors came under intense scrutiny in the wake of the major financial fraud at Satyam Computer Servi...

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Posted Under: Company Law |

Small Investor will be Encouraged to critically examine the decisions of the companies

The government is set to empower ordinary shareholders of the eight lakh domestic companies by encouraging them to critically examine the decisions of the companies, and if they feel something amiss, complain to the government....

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Posted Under: Company Law |

The Parliamentary standing committee on Finance to probe Satyam case

The Parliamentary standing committee on Finance, headed by BJP member of parliament Ananth Kumar, has convened a meeting on Wednesday to examine the crisis sparked by the fraud in Satyam Computer Services. This could lead to changes in company law to strengthen regulation and governance....

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Posted Under: Company Law |

Auditors failed to detect major risks in Satyam

The statutory auditor of Satyam Computer, Price Waterhouse, has said that it found no “significant risks and exposures” during its audit of the scam- hit IT firm....

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Posted Under: Company Law |

Make independent directors accountable: Suggestions for Companies Bill, 2008

The fraud admitted by the promoter of Satyam Computer Services demonstrates the ineffectiveness of the present Company Law in ensuring corporate governance. Facts about how the board approval was obtained for Satyam’s ‘investment’ in Maytas are not yet in the public domain. Company chairman Ramalinga Raju now says the ab...

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Posted Under: Company Law |

Sebi Amends Clause 49 of The Listing Agreement That Deals With Corporate Governance Norms

The amendments have been made after representations from entities requested Sebi to bring about further clarity on the amendment (made on April 8) where the promoter of a listed company is a listed or an unlisted entity. A Sebi release said, “If the promoter is a listed entity, its directors —other than the independent directors, its ...

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