Vinod Kothari & Company

MCA widens CSR for defence personnel

Company Law - MCA has issued several notifications either to clarify or broaden the ambit of Schedule VII. This Notification is yet another step taken by the MCA for widening the scope of CSR activities to include CAPF and CMPF veterans and their dependants and war widows....

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FAQs on conducting general meetings through VC during lockdown

Company Law - Background With the advancement of web-based facilities, the world is becoming technology driven to a very large extent. Connecting number of people virtually is not an unachievable or cumbersome task anymore.Although, in the past as well, MCA had come up its Circular on “Green initiatives in the Corporate Governance” in the year 2011...

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RBI to regulate operation of payment intermediaries

Company Law - In this article we shall discuss the concept of Payment Aggregator and Payment Gateway. Further, we intend to cover the applicability, eligibility norms, governance practices and reporting requirements provided in the aforesaid guidelines....

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MCA extends timeline for companies following calendar year

Company Law - Currently, only companies that follows calendar year as financial year have been granted a 3-months relaxation from holding their AGMs i.e. such companies are allowed to hold their AGMs till 30th September, 2020 instead of June, 2020. Further, the due dates of all other related compliances such as filing of annual returns or financial sta...

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Highlights of SEBI’s temporary relaxations for Rights Issue

Company Law - Article highlights SEBI relaxation related to Eligibility conditions related to Fast Track Rights Issues, Relaxation with respect to Minimum Subscription, Minimum threshold for not filing draft letter of offer and One-time Relaxation on opening of issue....

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Priority of Tax Dues In Liquidation?

Leo Edibles & Fats Limited vs TRO (Andhra Pradesh High Court) - The manner of distribution of the assets of a company during liquidation is fraught with ambiguity and settlement of such claims arising out of it has inconvenienced the parties concerned since the advent of the Insolvency and Bankruptcy Code, 2016 (Code). ...

Read More

Principle of imposition of minimum penalty is non-mandatory in compounding of offenses cases: NCLT

Re. M/S UW International Training & Education Centre for Health Pvt. Ltd. (NCLT Delhi) - NCLT held that the principle of imposition of minimum penalty is non-mandatory in compounding of offenses cases, it is necessary to define and understand offense. The term offence has been defined by s 3(38) of General Clauses Act, as any act or omission made punishable by any law for the time being...

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Liability of Directors for Events Taken Place Before Appointment- SAT Ruling

Mr. Nimain Charan Biswal (Securities And Exchange Board Of India) - In one of the recent rulings of the SAT, Mumbai, the interim order passed by SEBI in the matter of Neesa Technologies Limited(Company) has been quashed qua one of the directors i.e. Mr. Nimain Charan Biswal who had joined and resigned from the directorship of the Company before the issuance of Non-c...

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SEBI considers amending SEBI (ICDR) Regulations to align with FEMA Regulations

RBI/2014-15/123 A.P.(DIR Series) Circular No. 3 - (21/01/2015) - Securities and Exchange Board of India (hereinafter known as SEBI) in its Board Meeting held on 21st January, 2015 has approved proposal to carry out some amendments in SEBI (ICDR) Regulations, 2009 ( Regulations, 2009) with FEMA Act so as to harmonize the norms on receipt of upfront payment and ten...

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Recent Posts in "Vinod Kothari & Company"

MCA widens CSR for defence personnel

MCA has issued several notifications either to clarify or broaden the ambit of Schedule VII. This Notification is yet another step taken by the MCA for widening the scope of CSR activities to include CAPF and CMPF veterans and their dependants and war widows....

Read More
Posted Under: Fema / RBI |

FAQs on conducting general meetings through VC during lockdown

Background With the advancement of web-based facilities, the world is becoming technology driven to a very large extent. Connecting number of people virtually is not an unachievable or cumbersome task anymore.Although, in the past as well, MCA had come up its Circular on “Green initiatives in the Corporate Governance” in the year 2011...

Read More
Posted Under: Fema / RBI |

RBI to regulate operation of payment intermediaries

In this article we shall discuss the concept of Payment Aggregator and Payment Gateway. Further, we intend to cover the applicability, eligibility norms, governance practices and reporting requirements provided in the aforesaid guidelines....

Read More
Posted Under: Fema / RBI |

MCA extends timeline for companies following calendar year

Currently, only companies that follows calendar year as financial year have been granted a 3-months relaxation from holding their AGMs i.e. such companies are allowed to hold their AGMs till 30th September, 2020 instead of June, 2020. Further, the due dates of all other related compliances such as filing of annual returns or financial sta...

Read More
Posted Under: Fema / RBI |

Highlights of SEBI’s temporary relaxations for Rights Issue

Article highlights SEBI relaxation related to Eligibility conditions related to Fast Track Rights Issues, Relaxation with respect to Minimum Subscription, Minimum threshold for not filing draft letter of offer and One-time Relaxation on opening of issue....

Read More
Posted Under: Fema / RBI |

Tax Provisions for Housing Finance Companies (HFCs)

The Income Tax Act, 1961 does not contain specific provisions relating to Housing Finance Companies (HFCs). Thus, all the general provisions for computation of income shall apply to HFCs. It can also be established that as the main source of income of HFCs is interest, income will be computed under section 28 to 43 of the Income Tax Act, ...

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Posted Under: Fema / RBI |

FAQs on Fraud Reporting

In the corporate world nowadays, increase in the rate of frauds has generated the need for the companies to analyze the requirements wrt to fraud reportings, in order to be proactive in tightening their internal systems for preventing the same. Keeping in mind the need of the hour, we have prepared a guide to fraud reporting under Compani...

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Posted Under: Fema / RBI |

SEBI amends ICDR Regulations to include SR equity shares

SEBI has vide notification dated July 29, 2019 notified SEBI (Issue of Capital and Disclosure Requirements) (Third Amendment) Regulations, 2019. The Amendment Regulations deal with issue of shares with differential voting rights....

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Posted Under: Fema / RBI |

MCA set to deploy the eForm for reporting details of SBO

MCA, on July 1, 2019, issued Companies (Significant Beneficial Owners) Second Amendment Rules, 2019 thereby notifying e Form BEN-2 required to be submitted by companies....

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Posted Under: Fema / RBI |

RBI issues directions to prevent market abuse

Market Abuse:It includes market manipulation, benchmark manipulation, misuse of information, or any other similar practice. Market abuse may arise in circumstances where financial market investors have been unreasonably disadvantaged, directly or indirectly, by others who:...

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Posted Under: Fema / RBI |

RBI revises Trade Credit Policy Framework

Reserve Bank of India (‘RBI’) vide notification dated 13th March, 2019 (RBI/2018-2019/140) had notified revised framework for trade credit....

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Posted Under: Fema / RBI |

Sensitization: The key to implementation of PIT Regulations

CS Ambika Mehrotra Background of the Regulations The strong and decisive steps taken by the Securities and Exchange Board of India with respect to the Prohibition of Insider Trading Regulations have been quite a matter of concern for last couple of months. The modifications in the existing SEBI (Prohibition of Insider Trading) Regulation...

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Posted Under: Fema / RBI |

Impact of amendments in SEBI Regulations & Companies Act, 2013 on Policies & Codes of Companies

MCA in its attempts to streamline compliance requirements under Companies Act, 2013 and in order to remove certain discrepancies therein came up with Companies (Amendment) Act, 2017 ...

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Posted Under: Fema / RBI |

Informal Guidance under SEBI (Substantial Acquisition of Shares and Takeovers) Regulations, 2011

SEBI on 14th November, 2018 issued an informal guidance under SEBI (Substantial Acquisition of Shares and Takeover) Regulation, 2011, which gives clarity on Off-Market Transaction....

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Posted Under: Fema / RBI |

No more Laxity in reporting of Charges- Recent Amendments

Probable effects of the Companies (Amendment) Ordinance, 2018 related to Register of Charges, Registration of Charges Creation, Modification etc....

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Posted Under: Fema / RBI |

Variable Capital Company: Singapore proposes a new way of making investments. Can India replicate this model?

Variable Capital Company: Singapore proposes a new way of making investments

Variable Capital Company is a corporate structure that is tailored for collective investment schemes. In Singapore, the most commonly used investment fund structures are unit trusts (constituted by way of trust deeds) and investment companies....

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Posted Under: Fema / RBI |

Board interlock restrictions shall apply to existing IDs too

Sundaram Finance (applicant company) on 28th August, 2018 requested SEBI to issue informal guidance for getting clarity/better understanding of the wording use in new Regulation 17 (1A) and Regulation 25 (1) both of which use the word 'continue' which is absent in Reg.16(1)(b)(viii)....

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Posted Under: Fema / RBI |

Priority of Tax Dues In Liquidation?

Leo Edibles & Fats Limited vs TRO (Andhra Pradesh High Court)

The manner of distribution of the assets of a company during liquidation is fraught with ambiguity and settlement of such claims arising out of it has inconvenienced the parties concerned since the advent of the Insolvency and Bankruptcy Code, 2016 (Code). ...

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TCS On E-Commerce Operators

Under the GST Regime, on and from October 1, 2018, all e-commerce operators, except agents, shall be liable to deduct tax at source at the rate of 1% i.e. 0.5% CGST + 0.5% SGST, of the net value of intra-State taxable supplies made through it by other suppliers....

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Posted Under: Fema / RBI |

Who Can File an Affidavit ? Beware before you swear!

People file affidavits being unaware of what its repercussions might be and also unaware of the fact whether they are at all competent to make the affidavit. Before analysing who can file an affidvit, it is important to understand the duty bestowed upon a person providing affidavit. Even before that let us first understand what an affidav...

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Posted Under: Fema / RBI |

SEBI amends Buyback Regulations: Aligning and re-framing requirements with other laws

Buyback period’ means the period between the date of board of directors resolution or date of declaration of results of the postal ballot for special resolution, as the case may be, to authorize buyback of shares of the company and the date on which the payment of consideration to shareholders who have accepted the buyback offer is made...

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Posted Under: Fema / RBI |

Revised guidelines for companies to facilitate claimant’s refund by IEPF Authority

MCA Vide its Notification No. 07/05/2017-IEPFA, dated July 19, 2018 has revised and updated the guidelines for the company to facilitate refund of claims by IEPF Authority in light of resubmission option provided in e-form IEPF-5....

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Posted Under: Fema / RBI |

Hybrid Financing: An aid or an impediment

Nothing is available for free, even the air we inhale necessitates exhalation. Similarly, a startup requires funding in order to uplift itself from the nascent stage to a mature one. As an aid to the upliftment process, the Government of India has put forward an overture for hybrid instruments deviating itself from the traditional way of ...

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Posted Under: Fema / RBI |

HFCs to seek approval from NHB for the 10-26 criteria

National Housing Bank (NHB) came out with a notification on 19th July, 2018, amending the Housing Finance Companies (National Housing Bank) Directions, 2010 with respect to change in control of housing finance companies....

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Posted Under: Fema / RBI |

Indian Securitisation market opens big in FY 2019

The financial year 2017-18 witnessed one of the major reforms in the country, that is, the exordium of Goods and Services Tax (GST). GST replaced the erstwhile central excise duty, sales tax and service tax laws, thereby changing the indirect tax regime entirely. ...

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Posted Under: Fema / RBI |

SEBI’s yet another attempt to give domestic bond market a push

SEBI proposed that listed Companies with outstanding long-term borrowings of Rs. 100 crores and a credit rating of AA and above will have to compulsorily raise 25% of their debt from the bond market from the next financial year, as a part of corroborating the same. Lower rated corporates have been exempted from the framework for the time ...

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Posted Under: Fema / RBI |

Sections not yet enforced of Companies (Amendment) Act, 2017

MCA has so far issued Notification S.O. 351(E) dated: 23/01/2018, S.O. 630(E) dated: 09/02/2018 and S.O. 1833(E) dated: 07/05/2018 by which various provisions of Companies (Amendment) Act, 2017 is been made effective. This Article discusses Provisions of Companies (Amendment) Act, 2017 which are not yet enforced-...

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Posted Under: Fema / RBI |

MCA notifies 5 more Sections of Companies Amendment Act 2017

MCA vide its notification dated July 6 2018 notified 5 Sections of the Companies Amendment (Act), 2017 of which Section 20 will be effective from July 5, 2018 while date of enforcement of remaining Sections is w.e.f. August 15, 2018....

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Posted Under: Fema / RBI |

Entities to report total foreign investments to RBI

After SEBIs circular dated April 10, 2018 for monitoring foreign investment limits in listed Indian companies, RBI on June 7, 2018 issued notification in relation to reporting of foreign investment in Indian companies/ LLPs/ start up. RBI is to provide interface from June 28, 2018 to July 12, 2018....

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Posted Under: Fema / RBI |

MCA raises curtain on Significant Beneficial Ownership (SBO) Rules- Notifies final rules with several changes

Every significant beneficial owner is required to file a declaration in Form No. BEN-1 to the company in which he holds the significant beneficial ownership:...

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Posted Under: Fema / RBI |

Actionables for LODR (Amendment) Regulations, 2018

Pursuant to the recommendations made by Uday Kotak Committee Report, Securities and Exchange Board of India (SEBI) notified SEBI (Listing Obligations and Disclosure Requirements) (Amendment) Regulations, 2018 (Amendment Regulations) on May 9, 2018. The Amendment Regulations specifies various dates from which the amendments made shall come...

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Posted Under: Fema / RBI |

Privileges & Exemptions to Small Companies under Companies Act, 2013

Section 2(85) of the Companies Act, 2013 defines small company. A company (other than public company) will be considered small if; 1. Paid-up share capital doesn’t exceed fifty lakh rupees or such higher amount as may be prescribed which shall not be more than ten crore rupees[1] and...

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Posted Under: Fema / RBI |

SEBI qualifies QIP for achieving MPS

SEBI, in its board meeting held on December 28, 2017[1] decided to introduce Qualified Institutions Placement (QIP) and Sale of shares up to 2% held by promoters/promoter group in open market, subject to certain conditions, to enable listed companies to comply with the MPS requirement....

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Posted Under: Fema / RBI |

MCA set to place Private Placement rules- Issues draft rules to amend Rule 14 of PAS Rules

Substitution of Section 42 is one of the key amendments proposed in Companies (Amendment) Act, 2017 (Amendment Act). While, the Amendment Act is being enforced in phases, stakeholders have been awaiting the draft rules in relation to private placement. MCA on 15.02.2018 issued draft Companies (Prospectus and Allotment of Securities) (Amen...

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Posted Under: Fema / RBI |

MCA notifies 43 Sections of the Companies (Amendment) Act, 2017

The reforms in the Corporate Sector become a reality with the advent of the Companies Act, 2013 which increased the compatibility of Indian Companies on the global platform and raised the standards of Corporate Governance, Investor protection, Accountability and disclosures. ...

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Posted Under: Fema / RBI |

Liquidation of Corporate Debtor: Numerous swing for Corporate Debtor and its associates

Since inception, Insolvency and Bankruptcy Code, 2016 (‘Code’), has made great strides. As per the Financial Stability Report of the RBI, this Code that came into existence only in December, 2016, had around 4300 applications registered with the National Company Law Tribunal (‘NCLT’) by November, 2017. ...

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Posted Under: Fema / RBI |

Actionables pursuant to passing of Companies (Amendment) Act, 2017

In accordance with the amendments proposed in Companies (Amendment) Act, 2017, companies are required to take care of the impacts of the same on the provisions of the Companies Act, 2013 while carrying out its operations in order to avoid non-compliance and penalties prescribed under Companies Act, 2013....

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Posted Under: Fema / RBI |

MCA liberalizes acceptance of deposits from members

Ministry of Corporate Affairs has yet again revised the provisions relating to acceptance of deposits under the Act, 2013 with its notification dated September 19, 2017. The Companies (Acceptance of Deposits) Second Amendment Rules, 2017 substitutes the proviso to sub-rule (3) of rule 3 relating to acceptance of deposits by members and br...

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Posted Under: Fema / RBI |

Hundreds of LLPs may be vanishing soon

After issuing of show cause notices[1] (SCNs) for striking of names of more than 3 lakh non-operating companies, the Registrar has now taken the same action for LLPs. It seems that government has decided to heavily come down on existence of non-operative Limited Liability Partnerships (‘LLPs’) or say fake firms which are causing signi...

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Posted Under: Fema / RBI |

Analysis on revised Secretarial Standard 2

The Institute of Company Secretaries of India (ICSI) has recently revised the Secretarial Standard on Meeting of the Board of Directors (SS 1) and General Meeting (SS 2). The enforce ability of SS 1 and SS 2 comes from the provisions of section 118(10) of the Companies Act, 2013 (Act, 2013). The earlier SS 1 and SS 2 were made effective f...

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Posted Under: Fema / RBI |

Concurrence of Pledgee Sufficient For Creating Pledge

The Securities and Exchange Board of India (SEBI) vide its notification dated July 25th, 2017 has come up with SEBI (Depositories and Participants) (Second Amendment) Regulations, 2017 (hereinafter referred to as “DP Second Amendment Regulations, 2017) substituting sub-regulation (3) of regulation 58 of the SEBI (Depositories and Partic...

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Posted Under: Fema / RBI |

SEBI allows Category III AIFs to invest in commodities market

Alternate Investment Funds (AIFs) are privately pooled investment funds, incorporated in India, in the form of a trust, company, LLP or body corporate not covered under any other regulations prescribed by SEBI. These funds are governed by Securities and Exchange Board of India (Alternative Investment Funds) Regulations, 2012[1]....

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Posted Under: Fema / RBI |

MCA continues to shower relaxations on private companies

MCA vide notification dated 22nd June, 2017 issued Companies (Audit and Auditors) Second Amendment Rules, 2017, effective immediately from the above date. The Rules are meant to further amend the Companies (Audit and Auditors) Rules, 2014. The amendment pertains to corresponding rule for Section 139(2), regarding rotation of auditors in t...

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Posted Under: Fema / RBI |

Principle of imposition of minimum penalty is non-mandatory in compounding of offenses cases: NCLT

Re. M/S UW International Training & Education Centre for Health Pvt. Ltd. (NCLT Delhi)

NCLT held that the principle of imposition of minimum penalty is non-mandatory in compounding of offenses cases, it is necessary to define and understand offense. The term offence has been defined by s 3(38) of General Clauses Act, as any act or omission made punishable by any law for the time being in force....

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Posted Under: Fema / RBI |

GST implications for sale of repossessed assets

Lending is always to good borrowers but often the good borrowers become bad borrowers. Thus, the business of lending brings with it the trouble of enforcement of security interests as well. The repossession of the collateral asset and eventual sale for recovery of the losses due to default are a common phenomenon in lending business. This...

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Posted Under: Fema / RBI |

Analysis of recent Exemption notification for Section 8 Company

Section 149(1) of the Act, 2013- Every company shall have a Board of Directors consisting of individuals as directors and shall have- a minimum number of three directors in the case of a public company, two directors in the case of a private company, and one director in the case of a One Person Company; and a maximum of fifteen directors...

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Posted Under: Fema / RBI |

MCA favorably revisits exemption notification relating to private companies

The proviso to section 2(40) of Act, 2013 has been substituted to provide exemption from furnishing cash flow statement by such private companies that are recognized as start-up in accordance with DIPP notification....

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Posted Under: Fema / RBI |

Beneficial Interest and the concept of property

Through this article, we try and understand a very interesting question of whether beneficial interest can be considered a property. To get a better insight, we first need to understand the concept of beneficial interest in law and what amounts to property....

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Posted Under: Fema / RBI |

Analysis of IBC (Removal of Difficulties) Order 2017

The Government on 24th May 2017 released the Insolvency and Bankruptcy Code (Removal of Difficulties) Order, 2017 making additions in the Eighth Schedule of the Code, which originally amends the Sick Industrial Companies (Special Provisions) Repeal Act, 2003 (SICA), in order to clarify the matter in view of the repeal of the Sick Industri...

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Posted Under: Fema / RBI |

Amendments to SEBI (Debenture Trustee) Regulations, 1993

The Companies acts, 2013, as well as the SEBI regulations, prescribe the framework pertaining to debenture trustees. This led to several overlaps and ambiguities. Thus with a view toaddress this issue, SEBI formed a task force comprising of SEBI officials and representatives of the debenture trustees to conform the Debenture Trustee Regul...

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Posted Under: Fema / RBI |

Action Plan for NPA Ordinance – Sequel 2

Complementing the Ordinance on Non-Performing Assets (NPA) which originally brought a whole new breeze in the resolution space in India, RBI has come up with a press release as a further to the first step in crystallizing the concept as laid down in the Ordinance. RBI has brought a lot of changes for the purpose of implementation of the ...

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Posted Under: Fema / RBI |

SEBI’s proposal for more stringent Monitoring of Utilization of Issue Proceeds

SEBI (Issue of Capital and Disclosure Requirements) Regulations, 2009 (ICDR Regulations) requires that while raising funds from the public, the company has to mention the object for raising the fund. ...

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Posted Under: Fema / RBI |

Proposed framework for consolidation and re-issuance of debt securities issued under SEBI (Issue and Listing of Debt Securities) Regulations, 2008

The Companies Act,1956 had provisions regarding the consolidation and reissuance of debt securities under section 121.This section gave the company power to keep the same security alive for the purpose of re-issue after it's been redeemed....

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Posted Under: Fema / RBI |

RBI proposed draft regulations for Cross Border Mergers

The Reserve Bank of India (RBI) on 26th April, 2017 proposed draft of Foreign Exchange Management (Cross border Merger) Regulations, 2017 under Foreign Exchange Management Act, 1999 in relation to cross border mergers and is accepting public comments till 9th May, 2017....

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Posted Under: Fema / RBI |

Comparison of definition of Related Party as per AS -18 and IND -AS 24

Several entities will be required to comply with Indian Accounting Standards (IND-AS) w.e.f. 1st April, 2017 with the comparatives for the periods ending on 31st March, 2017, or thereafter....

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Posted Under: Fema / RBI |

SEBI revisits and recasts guidelines on scheme of arrangement

SEBI has been constantly revisiting the requirements for compliance and submission of documents to stock exchanges in accordance with the requirement under Listing Agreement/ Listing Regulations. ...

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Posted Under: Fema / RBI |

Analysis of Stewardship Code for Insurers in India

IRDA in its exposure draft has defined 7 Principles of Stewardship which an insurance company as an institutional investor will be required to adopt. Intention of Stewardship Code is to strengthen role of insurers as stewards on behalf of policyholders....

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Posted Under: Fema / RBI |

RBI Delegates additional power to its Regional Offices

RBI being the apex Bank of India regulating the Banking Sector and Non-Banking Financial Sector cannot perform all the functions at its Head office. Following were the powers delegated earlier in connection with the contravention of FEMA 1. Delay in reporting inward remittance...

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Posted Under: Fema / RBI |

RBI permits payment of coupon on AT1 bonds from statutory reserves

Basel III capital regulations are yet to be fully implemented. Total regulatory capital for Banks comprises of Tier 1 capital (Common Equity Tier 1 and Additional Tier 1) and Tier II capital. RBI has come up with yet another amendment widening the scope of ‘Distributable Items’ for making the coupon payments in case of Perpetual Debt...

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Posted Under: Fema / RBI |

Reduction of Share Capital: A comparison of procedures

A comparison between the National Company Law Tribunal (Procedure for reduction of share capital of Company) Rules, 2016[1](herein after referred to as the New Rules), the Draft National Company Law Tribunal Rules, 2015[2](herein after referred to as Draft Rules)...

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Posted Under: Fema / RBI |

Analysis of Delegation of powers to Regional Directors: Companies Act, 2013

Section 458 of Companies Act, 2013 empowers central Government to delegate its powers and functions to Regional Director or Registrar of Companies wherever required....

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Posted Under: Fema / RBI |

Analysis of NCLT (Amendment) Rules, 2016

The Central Government vide notification dated 1st June, 2016[1], constituted the National Company Law Tribunal and National Company Law Appellate Tribunal.....

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Posted Under: Fema / RBI |

New process for Share capital reduction before NCLT

In case of reduction of share capital, company cancels any paid-up share capital which is lost or is unrepresented by available assets or pays off excess paid-up share capital. ...

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Posted Under: Fema / RBI |

Standing Committee’s report on Companies (Amendment) Bill, 2016

Analysis of various changes proposed in Companies Amendment Bill 2016 along with recommendation made by CLC and Standing Committee Report...

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Posted Under: Fema / RBI |

RBI relaxes norms on remittance of pre-incorporation expenses

Alternative option of issuing shares instead of remittance by wholly owned subsidiary for pre-incorporation/pre-operative expenses incurred by overseas holding entities may also be a favorable move for corporate sector. ...

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Posted Under: Fema / RBI |

Compensation Agreements under SEBI Regulations

Compensation agreement is an agreement between the private equity (PE) and the promoters, directors and Key Managerial Person (KMP) of the listed entities whereby the PE agrees to share an agreed proportion of the profits above a certain threshold limit made by them at the time of selling the shares...

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Posted Under: Fema / RBI |

RBI permits 49% FDI under automatic route in Pension Sector

The policy makers are determined to attract foreign investment through Foreign Direct Investment (FDI) and continue to revisit sectoral caps and mode of investment in various sectors of the economy. ...

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Posted Under: Fema / RBI |

Sections notified under the Bankruptcy Code

MCA, vide its notification dated November 1, 2016 notified the third tranche of sections applicable of Insolvency and Bankruptcy Code, 2016...

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Posted Under: Fema / RBI |

RBI amends FEMA regulations to allow 100% FDI in ARCs

Govt permitted FDI up to 100% subject to certain conditions (up to 49% under Automatic route and under Government route beyond 49%) in Asset Reconstruction Companies (ARCs)....

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Posted Under: Fema / RBI |

Liability of Directors for Events Taken Place Before Appointment- SAT Ruling

Mr. Nimain Charan Biswal (Securities And Exchange Board Of India)

In one of the recent rulings of the SAT, Mumbai, the interim order passed by SEBI in the matter of Neesa Technologies Limited(Company) has been quashed qua one of the directors i.e. Mr. Nimain Charan Biswal who had joined and resigned from the directorship of the Company before the issuance of Non-convertible Debentures (NCDs),the subject...

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Benami Transactions-Genesis and Analysis

The number of benami transactions in the real estate sector has increased astronomically. In the absence of an effective regulation, the black or ill-gotten money is easily parked in the opaque real estate industry. In the recent last couple of years, there has been immense hue and cry about curbing benami transactions and black money....

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Posted Under: Fema / RBI |

Relaxation of additional fees in filing annual e-Forms-a boon for stakeholders

Recently, MCA has come up with General Circular No. 08/2016 which although came on 31st August, 2016, but been dated 29th July, 2016, provides relief to all the stakeholders in filing of annual e-Forms by providing them extended time line without paying additional fees. ...

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Posted Under: Fema / RBI |

RBI proposes catalytic regime of bond market

Looking at last 12 months, the market regulators in India have been on action to come up with suitable avenues to strengthen the bond market in India. Recently, there have been changes sought to stimulate the action in bond market. On August 18, 2016, in a bid to deepen the corporate bond market in India a report of the Working Group on D...

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Posted Under: Fema / RBI |

Remuneration to be aligned with identified risk appetite & long term interests

Compensation packages of employees of financial institutions are designed in a manner to encourage them to align their interest to that of the organisation. Often the structure of packages comprises of bonuses and incentives linked with the short term profitability of these institutions whereas long-term growth and stability is aligned wi...

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Posted Under: Fema / RBI |

Winding up of Company: an overview

Winding up is a process by means of which the affairs of a company are wound up in a manner to dissolve the company and put an end to the life of a Company. In the process of winding up, the company’s assets and properties are administered for the benefit of the members and creditors of the Company. The administrator, called liquidator,...

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Posted Under: Fema / RBI |

Revamping FDI Policy continues..

Seems the continuing foreign tours taken up by the Prime Minister of our country is indeed resulting in tremendous international alliances for the country. One of the main focus areas of such international tie-ups and alliances is Foreign Direct Investment (FDI)....

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Posted Under: Fema / RBI |

Comparison: SARFAESI Act & Amendment Bill 2016

In this write-up we have analysed the amendments proposed vide The Enforcement of Security Interest and Recovery of Debts Laws and Miscellaneous Provisions (Amendment) Bill, 2016 which are specific to the SARFAESI Act, 2002 and their impact:...

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Posted Under: Fema / RBI |

Need for FinTech operators to come up with new products?

With the markdown of valuations in start-ups last year, many fintech start-ups are now resorting to creating new market and products. As it shall be a faraway vision for these fintech firms to be earmarked as venture capitalists, they need to invest more in solving real world problems rather than merely addressing new problems....

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Posted Under: Fema / RBI |

DIPP to act as pullovers for Start-ups

It has been a very welcome move from the government to promote start ups in the era of sliding out through dip in valuations or non crystallization of their unique business ideas. The government is resorting to all possible mechanisms where these start-ups could provide an impetus to the country’s GDP. ...

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Posted Under: Fema / RBI |

Consolidated FDI Policy- a comparative analysis

Like every year, the Department of Industrial Policy and Promotion (DIPP), Ministry of Commerce & Industry had released the Consolidated Foreign Direct Investment Policy Circular, 2016 (FDI Policy 2016) which took effect from June 7, 2016. Several amendments were made in various sectors vide Press Note No. 12 dated November 24, 2015. FDI ...

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Posted Under: Fema / RBI |

SEBI: Process of Delisting

After a company becomes listed company, there are also regulations that govern the delisting of shares of the Company from one or more recognized stock exchanges. To delist means permanent removal of securities of a listed company from a stock exchange. As a result, the securities of that company would no longer be tradable at […]...

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Posted Under: Fema / RBI |

Amendment of Consolidation Rules: Creates year end dilemma

Section 129 (3) read with Rule 6 of Companies (Accounts) Rules, 2014 (Rules) provides manner of consolidation of financial statements of subsidiaries pursuant to Schedule III of the Act, 2013 and the applicable Accounting Standards. Also explanation to Section 129 (3) clearly states that for the purposes of this sub-section, the word subs...

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Posted Under: Fema / RBI |

RBI amends provisions relating to investments made by NRIs

This write-up discusses the changes made by way of the present notification in the definition of NRI and the Schedules to the principal regulation that govern the investments made by NRI on repatriation basis under portfolio investment scheme (Schedule 3) and Investment made on non-repatriation basis (Schedule 4)....

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Posted Under: Fema / RBI |

Company Fraud Reporting – Time To Act Now!

ICAI, has clarified that the applicability of this section on fraud reporting is applicable only to the statutory auditors of the company, the cost accountant in practice, conducting cost audit under section 148 of the Act; and to the company secretary in practice, conducting secretarial audit under Section 204 of the Act. It shall also ...

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Posted Under: Fema / RBI |

Rush of the hour! Declare interim dividend

With the provision of additional 10% tax to be imposed on the investor on receipt dividend income, the Indian market is witnessing a rush to declare interim dividends before the amendment comes to life, i.e. from April 01, 2016. Accordingly the companies need to adequately arrange for the declaration and payment of interim dividend before...

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Posted Under: Fema / RBI |

Infrastructure & Industrial Developments: Shout it out, India is flying – No doubt

Infrastructure and Industries, together they are amongst the few crucial areas of economy which determine the growth of a country by measuring the real development in their current state. Given the fact that investment in infrastructure is directly proportional to high economic growth; India has well utilized and encashed on the equation...

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Posted Under: Fema / RBI |

FAQ on Overseas JV and WOS

1.What is an overseas JV? 2. What is meant by wholly-owned subsidiary, first level subsidiary and second level subsidiary? 3. How can direct investments (DI)/ financial commitments (FC) in overseas wholly owned subsidiaries/JVs be made? 4. What are the conditions to be followed to invest or give FC in overseas JVs and WOS? 5. What is the ...

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Posted Under: Fema / RBI |

Institutional Trading Platform- Start-up India; Stand-up India

In order to facilitate capital raising by small and medium enterprises including start-up companies which are in their early stages of growth and to provide for easier exit options for informed investors like angel investors, VCFs and PEs etc., from such companies, SEBI has decided to permit listing without an Initial Public Offer and tra...

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Posted Under: Fema / RBI |

Primer on External Commercial Borrowings (ECBs)

1. How does ECB compare with domestic borrowings in terms of costs? 2. What is the key difference between ECB and FDI? 3. What all instruments of borrowings /debt instruments are covered by the definition of “ECBs”? 4. What is the key difference between automatic route and approval route for ECBs? 5. What is the […]...

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Posted Under: Fema / RBI |

Two New Subsidies: Sweet Spot for NBFCs and Asset Leasing Companies

The present government ushers 2016 with all round developments in the country – from more and more renewable sources of energy to better quality of homemade garments. On 30th December, 2015, the policy makers gave nod to two of the most important subsidies: Amended Technology Upgradation Fund Scheme – for the textile sector. Subsidy f...

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Posted Under: Fema / RBI |

Secondment of employees: An understanding

Secondment of employees, as a concept, has evolved in the era of global commercial mobility. Secondment is where an employee of one organization is working for one or more other organization(s), basis a mutual understanding between the organizations. There are various concerns associated with secondment of employees like the payroll , emp...

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Posted Under: Fema / RBI |

FAQs on Share Warrants

Share warrants are a common source of funding used by companies, both public and private. As is clear from the nomenclature, warrants are issued with an option to convert into shares of the company. Having said so, share warrants are not similar to CCDs or ESOPs as has been explained further in this write-up. In […]...

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Posted Under: Fema / RBI |

Note on definition of factoring business

Factoring works mainly on the principle of seller selling the receivables of a debtor to a specialized financial intermediary called a factor. The sale of the receivables takes place at a discount and the ownership of the receivables is transferred to the factor who shall on purchase of receivables, collect the dues from the debtor [&hell...

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Posted Under: Fema / RBI |

Revised ECB framework widens the reach of NBFCs

The revised ECB framework which the RBI issued on the 30th of November, 2015 comprise of favorable amendments with regard to categories of eligible borrowers. One of the components of the financial sector of the economy, the NBFCs, will be benefitted by the framework. The earlier framework was not as liberal and considerate as the revised...

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Posted Under: Fema / RBI |

Section 47(2)- an unclear provision?

Section 47 of Companies Act, 2013 provides for voting rights of the shareholders. The same corresponds to Section 87 of the Companies Act, 1956 (Act, 1956). Section 87 of Act, 1956 clearly demarcated the rights of cumulative and non-cumulative preference shareholders in case of default in payment of dividend; whereas Section 47 of Act, ...

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Posted Under: Fema / RBI |

DIPP permits LLPs to make downstream investments

Minimum government and maximum governance is surely a welcomed initiative. With an objective of achieving the ease of doing business in the country and to fast-tack the hindered projects, NDA government has launched various campaigns. ‘Start-up India’ and ‘Make in India’ have been the recent initiative. DIPP issued press note no. ...

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Posted Under: Fema / RBI |

Peer to Peer (P2P) Lending: Business Models

With the advancement in technology, there has been a dramatic change in the lifestyle and perception of people, from sharing their mood on facebook or becoming an overnight celebrity by trolling on Instagram or twitter to crowd funding from across globe for a social cause, to starting a business idea online. ...

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Posted Under: Fema / RBI |

Diwali Bonanza – DIPP floats exciting offers to lure foreign investors

DIPP seems determined to bring achche din for India Inc. The pace at which the current government is mending the FDI norms is really astonishing. After the launch of Make in India initiatives in September 2014, there has been a 48 percent increase in FDI equity inflows during October 2014 to April 2015. ...

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Posted Under: Fema / RBI |

Particulars of penalties and punishments in e-form MGT-7

There are two expressions used in point XII of e-form MGT-7 – ‘Penalties and Punishments’. What do the two mean and how are they different? a. Penalties are penalties as in sec 42, 60, 91, 94, 111, 118, 119, 132, 136, 173 etc. b. Punishment refers to punishment by way of fine or imprisonment....

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Posted Under: Fema / RBI |

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