Companies (Accounts) (Amendment) Rules, 2023 G.S.R. 40(E)dated 20th January 2023issued by MCA In exercise of the powers conferred under sub-sections (1) and (3) of section 128, sub-section (3) of section 129, section 133, section 134, sub-section (4) of section 135, sub-section (1) of section 136, section 137 and section 138 read with section 469 of the Companies Act, 2013 (18 of 2013), the Central Government hereby makes the following rules further to amend the Companies (Accounts) Rules, 2014, namely:- Short title and commencement.-

Companies (Authorised to Register)(Amendment) Rules, 2023 G.S.R. 39(E)dated 19th January 2023issued by MCA In exercise of the powers conferred by sub-section (1) of section 164, sub-section (1) of section 466, section 367 and section 374 read with sub-sections (1) and (2) of section 469 of the Companies Act, 2013 (18 of 2013), the Central Government hereby makes the following rules further to amend the Companies (Authorised to Register) Rules, 2014, namely:— Short title and commencement.— These rules may be called the Companies (Authorised to

Invitation of comments from the public on changes being considered to the Insolvency and Bankruptcy Code, 2016 Notice File No. 30/38/2021-Insolvency dated 18th January 2023 issued by MCA Background An efficient insolvency resolution framework is key to economic stability and growth. In 2016, India took a landmark step in this direction with the enactment of a robust, modern, and sophisticated insolvency framework, the Insolvency and Bankruptcy Code, 2016 (“IBC” or “Code”). The IBC is the nation’s first comprehensive law to address the insolvency

SECURITIES AND EXCHANGE BOARD OF INDIA (CHANGE IN CONTROL IN INTERMEDIARIES) (AMENDMENT) REGULATIONS, 2023 No. SEBI/LAD-NRO/GN/2023/115 dated 17th January 2023issued by SEBI In exercise of the powers conferred by section 30 read with clauses (b) and (ba) of sub-section (2) of section 11, section 12 of the Securities and Exchange Board of India Act, 1992 (15 of 1992) and section 25 of the Depositories Act, 1996 (22 of 1996), the Board hereby makes the following regulations to further amend the Securities and

Securities and Exchange Board of India (Stock Brokers) (Amendment) Regulations, 2023 No. SEBI/LAD-NRO/GN/2023/116 dated 17th January 2023issued by SEBI In exercise of the powers conferred under Section 30 of the Securities and Exchange Board of India Act, 1992 (15 of 1992), the Board hereby makes the following regulations to amend the Securities and Exchange Board of India (Stock Brokers) Regulations, 1992, namely: - 1. These regulations may be called the Securities and Exchange Board of India (Stock Brokers) (Amendment) Regulations, 2023. 2. They shall come into

Securities and Exchange Board of India (Settlement Proceedings) (Amendment) Regulations, 2023 No. SEBI/LAD-NRO/GN/2023/118 dated 17th January 2023issued by SEBI In exercise of the powers conferred by Section 15JB of the Securities and Exchange Board of India Act, 1992, Section 23JA of the Securities Contracts (Regulation)Act, 1956 and Section 19-IA of the Depositories Act, 1996 read with Section 30 of the

Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) (Amendment) Regulations, 2023 No. SEBI/LAD-NRO/GN/2023/117 dated 17th January 2023issued by SEBI In exercise of the powers conferred by section 11, sub-section (2) of section 11A and section 30 of the Securities and Exchange Board of India Act, 1992 (15 of 1992) read with section 31 of the Securities Contracts (Regulation) Act, 1956 (42 of 1956), the Board hereby makes the following regulations to further amend the Securities and Exchange Board of

Consultation Paper on Review of Regulatory Framework for Sponsors of a Mutual Fund Dated 13th January 2023issued by SEBI A. Objective The objective of this consultation paper is to seek comments / views from the public on the proposals intending to review the regulatory framework for sponsor(s) of a mutual fund so as to explore the possibility of enabling diverse set of entities, who otherwise may not have been eligible, to be associated with mutual funds with requisite safeguards in place. B. Background I. A

Introduction of Future Contracts on Corporate Bond Indices SEBI/HO/MRD/MRD-PoD-3/P/CIR/2023/11 dated 10th January 2023 issued by SEBI 1. In order to enhance liquidity in the bond market and also to provide opportunity to the investors to hedge their positions, SEBI had constituted a working group of representatives of NSE, BSE and MSEI to make recommendations on the matter of ‘Derivatives on Bond Indices.’ 2. Based on the submissions made by the working group and recommendations of Secondary Market

Change in Control of Portfolio Managers Providing Co-investment Services SEBI/HO/IMD/IMD-PoD-1/P/CIR/2023/8 dated 10th January 2023issued by SEBI 1. SEBI vide Circular No. SEBI/HO/IMD-1/ DOF1/P/CIR/2022/77 dated June 02, 2022 specified the procedure for seeking prior approval in case of change in control of Portfolio Manager. The Circular stands partially modified and para 2 (iv) of the said Circular may be read as under: “Pursuant to grant of prior approval by SEBI, in order to enable existing investors/ clients to take well

Comprehensive Framework on Offer for Sale (OFS) of Shares through Stock Exchange Mechanism SEBI/HO/MRD/MRD-PoD-3/P/CIR/2023/10 dated 10th January 2023issued by SEBI A. Based on the feedback received from various market participants, discussions with Stock Exchanges, Clearing Corporations and deliberations in Secondary Market Advisory Committee (SMAC) of SEBI, it has been decided to modify certain provisions of the existing OFS framework through Stock Exchange Mechanism. The comprehensive OFS framework is given as under: 1.0 Definitions 1.1 “Floor Price” is the minimum price at

Standard Operating Procedure for Handling of Stock Exchange Outage and Extension of Trading Hours Thereof SEBI/HO/MRD-TPD-1/CIR/P/2023/7 dated 9th January 2023issued by SEBI 1. Trading hours of stock exchanges are pre-defined and known to all market participants including the other Market Infrastructure Institutions (MIIs) to enable them to carry out activities related to continuous trading in securities. 2. If due to any technical reason or otherwise, continuous trading on stock exchanges is disrupted, it is of paramount importance that not only all

Securities and Exchange Board of India (Registrars to an Issue and Share Transfer Agents) (Amendment) Regulations, 2023 No. SEBI/LAD-NRO/GN/2023/112 dated 9th January 2023issued by SEBI In exercise of the powers conferred under section 30 of the Securities and Exchange Board of India Act, 1992 (15 of 1992), the Board hereby makes the following regulations to further amend the Securities and Exchange Board of India (Registrars to an Issue and Share Transfer Agents) Regulations, 1993, namely: - 1. These regulations may be

Securities and Exchange Board of India (Alternative Investment Funds) (Amendment) Regulations, 2023 No. SEBI/LAD-NRO/GN/2023/113 dated 9th January 2023issued by SEBI In exercise of the powers conferred by sub-section (1) of Section 30 read with sub-section (1) of Section 11, clause (ba) and clause (c) of sub-section (2) of Section 11 and sub-section (1) and (1B) of Section 12 of the Securities and Exchange Board of India Act, 1992 (15 of 1992), the Board hereby makes

Mode of Settlement for Trades Executed on the Request for Quote (RFQ) Platform SEBI/HO/DDHS/DDHS-RACPOD1/P/CIR/2023/9 dated 9th January 2023issued by SEBI 1. SEBI vide circular no. SEBI/HO/DDHS/DDHS_Div1/P/CIR/2022/142 dated October 19, 2022 on ‘Request for Quote (RFQ) platform for trade execution and settlement of trades in listed Non-convertible Securities, Securitised Debt Instruments, Municipal Debt Securities and Commercial Paper’ has permitted stock brokers registered under the debt segment of the Stock Exchange(s) to place/ seek bids on the RFQ platform

Filing of Forms GNL-2 (Filing of Prospectus Related Documents) and MGT-14 (Filing of Resolutions Relating to Prospectus Related Documents) Due to Migration from V2 Version to V3 Version in MCA 21 Portal from 7th January, 2023 to 22nd January, 2023 General Circular No. 02/2023 dated 9th January 2023issued by MCA Representations have been received in the Ministry requesting for clarification about filing of Form GNL-2, for the purposes of filing prospectus related documents and MGT-14 during 7th January,

Release Plan of 45 Company e-Forms in MCA 21 Version 3.0 General Circular No. 01/2023 dated 9th January 2023issued by MCA I am directed to inform all the stakeholders that this Ministry is in the process of introducing certain company e-Forms in MCA21 Version 3.0 (as per Annexure) and thus these e-Forms will not be available in MCA21 Version-2 from 07.01.2023 to 22.01.2023. 2. Therefore, keeping in view the fact above, it has been decided by the Competent Authority to allow

Consultation Paper on standardised approach to valuation of investment portfolio of Alternative Investment Funds Dated 6th January 2023issued by SEBI Objective 1. The objective of this consultation paper is to seek comments / views / suggestions from the public on the proposals relating to valuation of investment portfolio of Alternative Investment Funds (AIFs) under the SEBI (Alternative Investment Funds) Regulations, 2012 (“AIF Regulations”). Background 2. As regards valuation of investment portfolio of AIFs, presently, AIF Regulations focus on disclosures to investors and do

Management and advisory services by AMCs to Foreign Portfolio Investors SEBI/HO/IMD/IMD-POD1/P/CIR/2023/005 dated 6th January 2023issued by SEBI 1. SEBI Circular No. SEBI/HO/IMD/DF2/CIR/P/2019/155 dated December 16, 2019 specifies the categories of Foreign Portfolio Investors (FPIs), to which the AMCs may provide management and advisory services in terms of Regulation 24(b) of SEBI (Mutual Funds) Regulations, 1996. Accordingly, AMCs may provide management and advisory services to FPIs operating from International Financial Services Centres (IFSC) and regulated by International Financial

Relaxation from compliance with certain provisions of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 SEBI/HO/CFD/PoD-2/P/CIR/2023/4 dated 5th January 2023issued by SEBI 1. SEBI, vide circular no. SEBI/HO/CFD/CMD1/CIR/P/2020/79 dated May 12, 2020, had inter- alia relaxed the requirements specified in regulation 36(1)(b) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (“LODR Regulations”) relating to dispatching hard copy of the statement containing salient features of all the documents as prescribed

Interpretation of section 141 of the Negotiable Instruments Act cannot be applied to section 34 of the Drugs and Cosmetic Act. Ignoring nature of offence charged with will only lead to miscarriage of justice The interpretation of expression used in section 141 of the Negotiable Instruments Act, cannot be applied to section 34 of the Drugs and Cosmetic Act, though if read in isolation look in pari materia. When the offences are not cognate and enabling section is to prosecute the

The stock broker not only has to obtain a certificate of registration from SEBI for each of the stock exchange where he operates, at the same time, has also to pay prescribed ad valorem fee in reference to each certificate of registration A conjoint reading of the expression ‘a certificate’ as referred to in sub-section (1) of section 12 of the Act read with the scheme of SEBI (Stock Brokers and Sub-brokers) Rules, 1992 (‘Rules, 1992‘) and SEBI (Stock Brokers

Whenever fraud on a creditor is perpetrated in the course of carrying on business, it does not necessarily follow that the business is being carried on with an intent to defraud the creditor. If the directors of a company had acted on a bona fide belief that the company would recover from its financial problems/difficulties, then, they will not be held liable for the act/offence of fraudulent trading The aspect of fraudulent trading requires a very high degree of proof,

Once all the requirements under section 14 are complied with by the secured creditor, it is the duty cast upon the CMM/DM to assist the secured creditor in obtaining the possession as well as the documents. At this stage, the CMM/DM is not required to adjudicate the depute The powers exercisable by CMM/DM under section 14 are ministerial step and section 14 does not involve any adjudicatory process qua points raised by the borrowers against the secured creditor in taking possession

Where corporate debtor had no specific fund towards provident fund, resolution professional was right in seeking lifting of attachment order on bank account Where there was no specific fund towards provident fund, resolution professional was right in seeking lifting of attachment order during moratorium on bank account of corporate debtor by employees provident fund authorities, and the Adjudicating Authority should have done accordingly. Insolvency and Bankruptcy Code, 2016 – Section 14 – Moratorium – Attachment on bank account of corporate debtor imposed

The ‘Adjudicating Authority’ is not authorised to pass any orders which would circumvent and attempt to frustrate the resolution plan pending before it for consideration under section 31. Such order would be per se illegal without application of mind and is liable to be set aside In terms of section 31, the Adjudicating Authority has to approve the resolution plan if it is satisfied that the plan has been approved by the committee of creditors (‘CoC’) and meets the requirements or

Insolvency and Bankruptcy Code permits withdrawal of application before the committee of creditors is constituted. The question of approval by the committee of creditors does not arise in such a case Section 12A permits withdrawal of an application under section 7 that has been admitted on an application made by the applicant. The question of approval of the committee of creditors by the requisite percentage of votes, can only arise after the committee of creditors is constituted. Before the committee of

Where co-borrower is also a pledger, that does not disentitle financial creditor to initiate proceedings under section 7 against such a co-borrower Where a co-borrower is also a pledger, that does not disentitle a non-banking financial company being a financial creditor, to initiate proceedings under section 7 against such a co-borrower. Insolvency and Bankruptcy Code, 2016 – Section 7 – Insolvency resolution process – Application by financial creditor to initiate – Financial creditors initiated proceedings against borrower based on loan documents –

Condition precedent for condonation of delay in filing an application or appeal is existence of ‘sufficient cause’ depends upon facts of each case The condition precedent for condonation of delay in filing an application or appeal is the existence of sufficient cause. Whether the explanation furnished for the delay would constitute ‘sufficient cause’ or not would be dependent upon facts of each case. Insolvency and Bankruptcy Code, 2016 – Sections 7 and 9 – Insolvency resolution process – Application by financial creditor/operational

The object of notice before the filing of the complaint is not just to give a chance to the drawer of the cheque to rectify his omission to make his stance clear so far as his liability under section 138 is concerned It is essential for the person to whom statutory notice is issued under section 138 to give an appropriate reply. The person concerned is expected to clarify his or her stance. If the person concerned has some unimpeachable and

Securities and Exchange Board of India has wide powers to take suitable coercive actions against research analysts. Mere possibility of abuse of such powers cannot be a ground to declare them violative of article 19(1)(a)/(g) or article 14 of the Constitution A wide range of powers is conferred on the Board under regulation 31 since different corrective actions may have to be taken depending on the nature of the violation committed by the research analyst. In a given case if such

Section 48 of the Gujarat Value Added Tax Act, 2013 (‘GVAT Act’), which provides for first charge on the property, does not override section 53 of the Code Section 48 of the GVAT Act is not contrary to or inconsistent with section 53 or any other provisions of the Code. Under sub-clause (ii) of clause (b) of sub-section (1) of section 53, the debts owed to a secured creditor, which would include the State under the GVAT Act, are to rank

Clause (a) of sub-section (7) of section 31 of confers a wide discretion upon the arbitrator in regard to the grant of pre-award interest The arbitrator has the discretion to determine the rate of reasonable interest, the sum on which the interest is to be paid, that is, whether on the whole or any part of the principal amount, and the period for which the payment of interest is to be made – Whether it should be for the whole or

Dues of a secured creditor [subject of course to creation of security interest with the central registry (CERSAI) registrations] and subject to proceedings under the Insolvency and Bankruptcy Code, 2016 would rank superior to the dues of the relevant department of the State Government Enforcement of Security Interest and Recovery of Debts Laws and Miscellaneous Provisions (Amendment Act), 2016 (‘Amendment Act, 2016’) ordains that the dues of a secured creditor will have priority, i.e., take precedence. Significantly, it is not only

On a conjoint reading of sections 33 and 35 and regulation 8, 31A, 32 and 33 of the Liquidation Process Regulations, 2016, it is evident that the liquidator is authorised to sell the immovable and movable property of the corporate debtor in liquidation through a public auction or a private contract, either collectively, or in a piece-meal manner Regulation 33 gives ample latitude to the liquidator, who may ‘ordinarily’ sell the assets through auction. In peculiar facts and circumstance, the liquidator

The Customs Act and the Code act in their own spheres. In case of any conflict, the Code overrides the Customs Act. The Customs Act and Code can be read in a harmonious manner wherein authorities under the Customs Act have a limited jurisdiction to determine the quantum of operational debt The Code would prevail over the Customs Act to the extent that once moratorium is imposed in terms of sections 14 or sub-section (5) of section 33 as the case

Claim of licence fee is ‘operational debt’ as it comes under ‘goods and services’ Claim of licensor for payment of license fee (by the corporate debtor who was permitted its use under the agreement ) falls within the ambit of definition of ‘operational debt’ within the meaning of clause (21) of section 5 being provision of goods and services for which the corporate debtor is contractually obligated to make the payments. Insolvency and Bankruptcy Code, 2016 – Section 5(21) and 9 –

Passing of a resolution plan does not ipso facto discharge the personal guarantor The Supreme Court in Lalit Kumar Jain v. UOI [2021] 162 CLA 312 (SC) has ruled very clearly that discharge of the corporate debtor from a debt owed by it to its creditors, by way of an insolvency process such as insolvency proceedings, does not absolve the guarantor of its liability, since it arises out of an independent contract. Financial creditor has right to proceed against security offered

Doctrine of res judicata is applicable even to the proceedings under the Code and challenge to the findings in incidental or collateral proceedings amounts to an abuse of process of the Court. Again raising such grounds in the second round of litigation in incidental proceedings is nothing but an abuse of process of court The principle of res judicata, though a part of Code of Civil Procedure, would be applicable to proceedings of the Appellate Tribunal and the Code. Only to

An advocate can, on behalf of the corporate debtor, issue a demand notice under section 8 and no document is required to establish his period of association with the company Section 30 of the Advocates Act deals with the fundamental right under article 19(1)(g) of the Constitution to practice one’s profession. Therefore, a conjoint reading of section 30 of the Advocates Act and sections 8 and 9 of the Code together with the Adjudicating Authority Rules and Forms thereunder would yield

In this article, the authors have analysed the recommendations of the Company Law Committee for the inclusion of the new concept of ‘forensic audit’ under the Companies Act, 2013. The article intends to provide insight into the role of forensic audit in deterring corporate crimes.

Societies Registration Act, 1860, a more than one and a half centuries old British-era enactment, is ripe for repeal as all existing societies registered under this Act may be converted into companies, in terms of section 8 of the Companies Act, 2013, meant for promotion of commerce, art, science, sports, education, research, literature, social welfare, religion, charity, health, environment, etc., which will provide greater transparency, governance, administration, regularisation, uniformity and information in public domain. Economic Times of 24th October, 2022

In State Tax Officer v. Rainbow Papers Ltd. [2022] 170 CLA 292 (SC), the preference has been given to the Government dues under the Gujarat Value Added Tax Act by reading it as a “Secured Creditor” and while doing so, the Supreme Court has created an altogether new insolvency jurisprudence in regard to the interpretation of Section 53 of the Insolvency and Bankruptcy Code, 2016 (‘the Code’) and thus, in this way, it has possibly drifted away from the very

Post-COVID-19 liberalisation and changing systems under the Companies Act, 2013 (‘the Act’) for holding general meetings have taken away shine of many age-old procedures and phrases. Author has discussed, in this article, the relevant provisions and reasons for losing significance of some of them. It is also emphasised that while “closure of register of members” is optional for all companies under the Act, ‘record date’ is mandatory for all listed companies under SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.

This article analyses the proposed amendments to the Companies Act, 2013 relating to related party and procedural or approval process in related party transactions.

This article deals with conduct of annual general meetings and fallacies faced with introduction of video conferencing/other audio visual means with respect to items of ordinary business, especially re-appointment of director liable to retire. In the end, the author has raised a few questions for consideration of stakeholders and action by the regulators.

In this Article, the author has analysed various recommendations of the Committee for amendments in the Companies Act and the Rules thereunder alongwith his own comments.

India is a secular country. But it comprises of people of various religions. To name a few, Hindus, Buddhists, Parsis, Christians, Muslims, etc. Every religion preaches its followers that it is their duty to take care of the downtrodden. Government has proclaimed that it is with ‘Sabke Sath’. Despite this, there are no administrators in this sacred land to take care of the interests of the holders of unredeemed preference shares as would be seen from this write up.

It is incredible and unbelievable that the Companies Act, 2013 bears, recognises, refers to, stipulates for and deals with more than three dozen (38) types of companies. In this article, the author has assimilated/tabulated all these companies along with their references, basic characteristics and his own comments.

In this article, the author makes in-depth analysis of Foss v. Harbottle Rule and its applicability in Indian and English legal framework. He concludes that while in India the rule does not have mechanical application as it is determined on case-to-case where the minority is squashed by the majority and the majority can get away with the fact that they are ‘in majority’.

In this article the author has discussed the status of non-compliances under various regulatory Acts when a corporate insolvency resolution plan is approved against the corporate debtor in view of the recent order of the Securities Appellate Tribunal in ArcelorMittal Nippon Steel India Ltd. v. SEBI [2022] 169 CLA 114

This article is intended to give a bird’s eye view of ‘Shadow Director’ as envisaged under various provisions of the Companies Act, 2013 and the Rules made thereunder.

This article seeks to look at the domestic Indian laws in regard to shell companies and critically analyse the same. Indian laws are being analysed and an effort has been made to figure out the discrepancies therein. Laws made in other countries have also been looked at.

In this article, inspired by one recommendation of the Company Law Committee in its report dated 21st March, 2022, the author has endeavoured to make a case for incorporation of a wholly-owned subsidiary (‘WOS’) as one person company (‘OPC’) for doing business with ease in accordance with clause (68) of section 2 of the Companies Act, 2013. Also, that rule 3 of the Companies (Incorporation) Rules, 2014 is ultra virus the statutory provision.

In this article, the author makes an attempt to answer the question as to whether holding of meetings of companies by video conferencing or other audio-visual means is vires of the Companies Act, 2013.

In this article the author analyses roles and responsibilities of the Audit Committee/Auditors in respect of related party transactions as envisaged in section 188 of the Companies Act, 2013.

This article is intended to give an overview of independent directors as envisaged in sub-section (6) of section 149 and Schedule IV of the Companies Act, 2013 and the Companies (Appointment and Qualification of Directors) Rules, 2014.

This article attempts to familiarise the readers with the recent circular issued by the Securities and Exchange Board of India on issuance of securities in dematerialised form in the case of investor service requests while processing certain requests of investors and to provide simplistic explanations of terminologies/concept related thereof.

This article highlights the benefits of digital governance in the process of digital transformation. A technology-driven wave has defined a new outlook for businesses. Factors like regulatory support and peer competition have been responsible for the adoption of digital transformation. From a small vendor to a big businessman, everyone aspires to run their business efficiently. In the wake of this, digital transformation has played a key role.

In this article, the author has discussed the relationship between a holding company and its wholly owned subsidiary company in the backdrop of the provisions of section 186 of the Companies Act, 2013.

Financial creditor – Is lessor of movable property a financial creditor – Since lease of machinery to the corporate debtor, no money passes from the lessor to the lessee, transaction is not a transaction resulting in financial debt and the other party is not a financial creditor.

Non-obstante clause – Two statutes containing – Which statute would prevail – It would be proper to assume that it is intention of the Legislature while passing the Bill, that the non-obstante clause in the later legislation should prevail.

Moratorium – Declared under section 14 – Will it extend limitation period for initiation of proceedings against corporate debtor – Sub-section (6) of section 60 of the Code would come to the rescue of the corporate debtor if the action proposed to exercise the right is within the period of limitation set out under the Limitation Act plus the exact period of the duration of the moratorium declared under section 14 of the Code.

NCLT – Residual powers – Can NCLT exercise power to adjudicate a contract which is unrelated to proceedings for insolvency resolution process - The residuary jurisdiction of NCLT cannot be invoked if the termination of the contract is based on grounds unrelated to the insolvency of the corporate debtor

Partnership – Conversion into LLP – Is stamp duty payable thereon – There being no instrument of transfer of assets of the erstwhile partnership firm to the LLP, the question of payment of stamp duty and registration charges does not arise as these are chargeable only on the instruments indicated in section 3 of the Stamp Act and section 17 of the Registration Act.

Income-tax payable by corporate debtor – Is the Income-tax Department to the extent thereof a secured creditor of corporate debtor – The Income-tax Department meets with the definition of the secured creditor for the purposes of the Code.

Holder of recovery certificate under the Debts Recovery Act – Can he be considered as a financial creditor for initiation of insolvency resolution process under section 7 of the Code – Liability in respect of a claim arising out of recovery certificate would be a “financial debt” within the meaning of Clause (8) of section 5 of the Code. Consequently, the holder of the recovery certificate would be a ‘financial creditor’ within the meaning of clause (7) of section 5

Annual financial statements/Report of Board of directors – Are they to be considered and approved at one and the same Board meeting – Report of the Board of directors can be considered and approved at the same meeting after the relative financial statement is considered and approved by it and after the report of the auditors is adopted. It can be at the same meeting, as usually the case or at a later meeting.

‘Control’ – Used in Company Law – What does it mean – By exercising power in the negative covenants in the agreement/articles of association, person or entity cannot be said to have control over the affairs of the company.

Reduction of Capital – Can securities premium account be utilised therefor – By following the procedure prescribed for reduction of capital, the credit balance at the foot of the Securities Premium Account can be used for purposes other than that mentioned in sub-section (2) of section 52 of the Companies Act, 2013.

Subsidiary – When it could be classified as a wholly-owned subsidiary of its holding company - Unless the entire shares with voting rights is owned by a holding company (and not partly by it and the remaining by one or more of its subsidiaries) in a subsidiary, the latter cannot be called the fully owned subsidiary of the former.

Acquisition of shares – In compliance with the order of the NCLT – Will compliance require company to comply with section 66 relating to reduction of capital – Compliance need not be established.

Voting rights – Pledged shares – In whom will it vest – Voting rights in respect of shares pledged with the pawnor until, if and when, the pawnee sells the shares to third parties would vest with the pawnor.

Financial statements – Circulated to members - Can it be corrected after circulation – Financial statements after incorporating corrections/amendments duly approved by the Board of directors can be adopted in the annual general meeting.

Resolution professional – Fixation of remuneration – Is it necessary for the NCLT to pass a speaking order – The order of the NCLT should be a speaking order giving reasons for the order it has made.

Restoration of name – Struck off from register of companies – Can a company plead that its name be restored on the ground that it is carrying on business not authorised by memorandum of association – If the business is not authorised in the objects clause or incidental or ancillary thereto, then it is no business in the eye of law and in that situation it cannot successfully plead for restoration of its name.

Insolvency resolution process – Application for initiation by a financial creditor – Can it be filed against society – Financial creditor cannot file application for initiation of insolvency resolution process against a society which has not been notified by the Central Government.

Gratuity – Payable to a managing director/whole-time director who has been appointed from time-to-time for successive periods – Is it to be computed on the basis of the last drawn salary before cessation of appointment or salary drawn immediately before such appointment – It would be advisable to pay gratuity computed on the basis of the salary paid to managing director/whole-time director at the conclusion of each term of appointment.

Insolvency resolution process – Loan agreement on the basis of which application was made – Is it mandatory for loan agreement to be stamped fully - Adjudicating Authority cannot order initiation of corporate insolvency resolution process, if the application therefor is accompanied only by a copy of the loan agreement entered into by the financial creditor with the corporate debtor.

Insolvency resolution process – Application by financial creditor – Can it be signed on his behalf by its general power of attorney – The authorisation under the power of attorney includes the authority to take decision and to commence legal proceedings before any court or tribunal and to do all acts and deeds incidental, usual and consequential thereto. Therefore, an application under section 7 of the Insolvency and Bankruptcy Code, 2016 can be signed on behalf of the financial creditor