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Companies Act

Background

Key Managerial Personnel (“KMP”) play an integral role in the management and functioning of a company. Earlier, the Companies Act, 1956 under Section 269, provided for the appointment of managing or whole-time director or manager in certain cases. However, the Dr. J.J. Irani Report[1], recognized that the board of directors (“Board”) typically look towards KMP for formulation and execution of policies and recognized their role in conducting the affairs of the company. The Committee highlighted the need to recognise the concept of KMP, govern such appointments and identify them as officers responsible for certain functions of the company, along with making them liable for any related non-compliances. Further, the Parliamentary Standing Committees on the Companies Bill in 2009 and 2011[2] also discussed the necessity for the concept of KMP to be included in the Companies Act, 2013 (“Companies Act”). Accordingly, the Companies Act, re-envisioned the importance of KMP and for the first time provided for a detailed definition of KMP along with the provisions governing their appointment.

Continue Reading Key Managerial Personnel Appointments: Applicability of Section 203 of the Companies Act, 2013 to private companies: does the NCLAT order cast the net too wide?

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Compulsory Pre-Litigation Mediation for Commercial Suits – A Boon or a Bane

Introduction

The increased sophistication with which mammoth corporates, mid-segment businesses and even small & gig economy players conduct their businesses today has bred a trusting atmosphere in which entities are willing to accept amicable forms of dispute resolution, such as mediation, instead of turning to traditional litigation. Commercial entities are benefited from this shift since it helps them to maintain a healthy business relationship with their contemporaries even in the face of commercial disputes that may arise in the course of business, without having to compromise on confidentiality or reputation.

Continue Reading Compulsory Pre-Litigation Mediation for Commercial Suits – A Boon or a Bane?

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Moonlighting

Introduction

Moonlighting is the colloquial term used to refer to the practice of employees working a second job, in addition to their primary job. The last few weeks saw myriad news reports on this practice in start-ups and the IT/ITES industry. Most companies have released statements opposing the practice and some have even taken action against moonlighting employees. Some companies have, however, indicated that they are open to allowing employees to moonlight within a defined framework.

Continue Reading Moonlighting – Legal Considerations and Contractual Regulation

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New ODI Regime

Background

The Ministry of Finance (“MoF”) and Reserve Bank of India (“RBI”) notified the new overseas investment (“OI”) regime on August 22, 2022 (“New Regime”).

The New Regime inter alia comprises the OI Rules, 2022[1] notified by the MoF (“Rules”), the OI Regulations, 2022[2] notified by the RBI and the Master Directions issued by the RBI to authorised persons. It supersedes FEMA 120[3] and the circulars and directions issued thereunder (“Old Regime”).

Continue Reading New ODI Regime: What RBI needs to clarify?

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Ship Leasing in IFSC

India has a vast coastline and easy access to shipping routes, yet India contributes only 1% in global trade.[1] Many major shipowners and operators have chosen key international maritime centres such as Singapore, Hong Kong, and Dubai as their base for operations.

To create a stimulating ecosystem that can help Indian entities compete with global marine hubs by accelerating and boosting their presence internationally, IFSCA has constituted a Committee on Development of Avenues for Ship Acquisition, Financing and Leasing Activities (“SAFAL Committee”) to obtain a complete overview and assessment of the existing legal and regulatory regime in IFSC in India for ship acquisition, financing and leasing.

Continue Reading Ship Leasing in IFSC – A New Regime

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Telcom Bill

On September 21, 2022, the Department of Telecommunications (“DoT”) at the Ministry of Communications, Government of India (“Government”), proposed to replace the existing legislation governing telecommunications in India, namely, Indian Telegraph Act, 1885, the Wireless Telegraphy Act, 1933, and the Telegraph Wires (Unlawful Possession) Act, 1950 (collectively, “Telegraph Laws”), with the draft Indian Telecommunication Bill, 2022 (“Draft Bill”).[1]

Continue Reading The Draft Indian Telecommunication Bill, 2022: A Work in Progress

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Genetic Testing

Since the Covid-19 pandemic, people’s perception of healthcare has undergone a change. While the top 10 causes of death in India continue to be non-communicable diseases like diabetes, cardiac diseases, and respiratory diseases, these are easily preventable/ manageable if addressed at an early stage through vital screening and consultation at regular intervals. Furthermore, routine testing might reduce the severity of rare disorders, including auto-immune deficiencies, and also help lower cancer-induced mortality.

Continue Reading Genetic Testing: A new doorway towards opportunities, challenges in preventive healthcare

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Appointment of Common Directors between Intermediaries and Insurers IRDAI Resolves the Conundrum!

Common Directors under Section 48A of the Insurance Act, 1938

The appointment of the same individual on the Board of Directors (“Board”) of both an insurer and an insurance intermediary (brokers, corporate agents and web aggregators) (“Common Director”) is currently prohibited under Section 48A[1] of the Insurance Act, 1938 (“Act”). However, the Insurance Regulatory and Development Authority of India (“IRDAI”) is empowered to permit an intermediary to be a director on the Board of an insurance company subject to the conditions and restrictions as may be imposed by the IRDAI. Therefore, if an insurer were to appoint Common Directors on its Board, a prior IRDAI approval is a critical requirement.

Continue Reading Appointment of Common Directors between Intermediaries and Insurers: IRDAI Resolves the Conundrum!

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FIG Paper

Pursuant to the Report of the Reserve Bank of India (“RBI”) Working Group on Digital Lending, issued on November 18, 2021, and the RBI Press Release on ‘Recommendations of the Working Group on Digital Lending – Implementation’, dated August 10, 2022 (“August Press Release”), the RBI released the Guidelines on Digital Lending on September 2, 2022 (“Guidelines”). Our Alert examines the key changes introduced and industry implications.

Continue Reading FIG Paper (No. 17 – Series 2) – New Digital Lending Guidelines – Industry Implications