Photo of Sindhushri Badarinath

Director in the General Corporate Practice at the Bangalore office of Cyril Amarchand Mangaldas. Sindhushri advises on India entry strategy, corporate governance, employment and general corporate advisory specializing in employee benefit schemes (including employee stock options and share appreciation rights) and restructuring of employee benefit schemes, executive appointment and remuneration, and business/asset transfers. She can be reached at sindhushri.badarinath@cyrilshroff.com

Crackdown on shell companies MCA amends the Companies Incorporation Rules to provide for additional physical verification of registered offices

Background:

The Ministry of Corporate Affairs (“MCA”), vide notification dated August 18, 2022, notified the Companies (Incorporation) Third Amendment Rules, 2022, which further amended the Companies (Incorporation) Rules, 2014 (“Companies Incorporation Rules”), through the introduction of Rule 25B. This amendment sets out the process to be followed by the Registrar of Companies (“ROC”) to carry out physical verification of a registered office of a company.[1]

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ESOP Has SEBI Put an End to ‘Sell All’ Method of Cashless Exercise

Employee stock options are frequently used as an employee incentivisation and retention tool, given the benefit accrued over time. An ESOP-wrapped compensation is attractive because the gains from the shares acquired on exercise of employee stock options are much higher than the exercise price paid for the options. While the maximum or minimum price payable on exercise of the options is not prescribed by the law – which only lays down the requirement for the price to be accounting-standard compliant –  the price typically ranges from the face value of the share to the fair market value of the share.

Continue Reading ESOP: Has SEBI Put an End to ‘Sell All’ Method of Cashless Exercise?