MCA’s Notification on Section 67 of the Companies Act, 2013

Introduction

One aspect which English Company Law has always grappled with is the manner in which the capital of a company should be protected for the benefit of its creditors. Way back in 1887, in its celebrated decision in Trevor v Whitworth[1], the House of Lords held that the statutory restrictions on a company’s power to reduce its capital “is to prohibit every transaction between a company and a shareholder, by means of which the money already paid to the company in respect of his shares is returned to him”.


Continue Reading MCA’s Notification on Section 67 of the Companies Act, 2013 – Is it an Exemption or an Inclusion under the Henry VIII Clause?

Benami Act

Introduction

Coinciding with the demonetisation of currencies by the Government of India in 2016, the Benami Transactions (Prohibition) Act, 1988, was substantially amended and renamed as the Prohibition of Benami Property Transactions Act, 1988 (“Benami Act”). The Benami Act was brought into effect from November 01, 2016. It was a well-timed move to ensure that demonetisation doesn’t become a futile exercise.


Continue Reading Declarations of beneficial interest under the Companies Act vis-à-vis the Benami Act: No immunity and no “Ganga Snan”!

Rights Issue – Is the Board’s Discretion to Allot Unsubscribed Shares Absolute?

Introduction

Rights issue, as the term denotes, is the recognition of an inherent right of an equity shareholder against dilution of his shareholding in the company. It is a pre-emptive right of the equity shareholder to subscribe to his proportionate share in all further issuance of equity shares.


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Draft Consumer Protection (Direct Selling) Rules, 2021

Unlike the erstwhile Consumer Protection Act, 1986, the Consumer Protection Act, 2019 (“CPA 2019”), has defined ‘direct selling’[1], and expressly included any person who buys products or avails services through direct selling or multi-level marketing within the definition of ‘consumer’. However, a framework for regulating direct selling under the CPA 2019 has not been put into place till now. With the recently released draft Consumer Protection (Direct Selling) Rules, 2021 (“Draft Rules”), the Department of Consumer Affairs has finally taken demonstrable steps towards formalising the regulatory framework for direct selling entities in India.


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Corporate Defamation: A Perspective on Analyst Reports

In 2008, Bank Atlantic, a Florida based bank, sued a prominent Wall Street analyst over a report on potential bank failures titled “Who’s Next?” The Bank stated that the analyst had defamed the bank by suggesting that it might fail. Bank Atlantic had previously sued ABC over a news report in 1991. In 2009, Hertz Global Holdings Inc., sued an analyst for defamation over a report that Hertz claimed, suggests that the world’s largest car rental company could go bankrupt.


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Legal Privilege and Covid-19 - Part I

Part I discuses the concept of attorney-client privilege, work product doctrine and the legal position in the US and the UK.

Legal privilege and attorney work product

The legal privilege or attorney-client privilege is often regarded as the crown jewel of the legal profession. It provides protection from disclosure of communications between a client and an attorney made for the purpose of seeking legal advice.
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New CSR Regime – Is it a philanthropy or a tax levy?

The Ministry of Corporate Affairs (“MCA”), Govt of India, notified the amendments to Section 135 of the Companies Act, 2013 (“the Act”), (dealing with CSR contribution), by the Companies (Amendment) Act, 2019 (“2019 Amendment”), and the Companies (Amendment) Act, 2020 (“2020 Amendment”), on January 22, 2021. The MCA has also notified the Companies (CSR Policy) Amendment Rules, 2021 (“new CSR Rules”), which has made some fundamental changes to the CSR Rules, 2014.
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