Samagrata - Vinod Kothari Consultants
←
→
Page content transcription
If your browser does not render page correctly, please read the page content below
Vinod Kothari & Company
Samagrata
A collection of major
developments in
Corporate laws
What’s inside?
One might find it very difficult to find things that
are more dynamic than the business itself. In
order to keep pace with this dynamic business
world even the legal regime has to constantly
evolve.
While we constantly endeavour to keep our
people updated with regular amendments, it is
always good to get into intricacies of them.
This issue brings you our analysis on certain major
regulatory changes made during the month of
February 2021 in the corporate law regime.
1
We are glad to present before you the latest
issue of ‘Samagrata’ for the month of
February, 2021.
This edition brings you all the major
developments in and around corporate
laws. We hope you would like our efforts and
we will be glad to receive your valuable
feedback on this issue at email ID given
below.
-Payal Agarwal
payal@vinodkothari.com
2
CONTENTS
Corporate law reforms: Union Budget 2021- 4
22
SEBIaligns disclosure formats with amended
5
PIT Regulations
Maharashtra Stamp Act amended to clarify
legal stand 6
Snapshot
of Companies (Share Capital and 7
Debentures) Amendment Rules
RBI
directs NBFCs to limit fresh investments
from FATF non compliant jurisdictions 8
Understandingthe borderline between 9
implementing agencies and beneficiaries
Extending provisions of the Companies Act,
10
2013 to Limited Liability Partnership
LLPs Slated To More Stringent Reforms 11
Ease
of doing business: Debt listed 12
companies slide down
MCA eases the requirement for setting up
and conversion of an OPC 13
Contact us 14
3
CORPORATE LAW REFORMS: UNION BUDGET
2021-22
- Pammy Jaiswal And Abhishek Saraf
Introduction
While the Union Budget for the FY 2021-2022 was focused on
infrastructure development, the Hon. Finance Minister in her
Budget Speech also mentioned about several significant
changes in the area of corporate laws. Changes have
been proposed to decriminalize the LLP Act, 2008, increase
in the threshold of the definition for small companies,
introduction of an updated version of the MCA, changes in
the OPC framework, increase in the FDI limits in an insurance
company, etc.
We have covered each one of these in detail in our write up
for the sake of understanding the relevance of these
proposals.
Read
more
4SEBI ALIGNS DISCLOSURE FORMATS WITH
AMENDED PIT REGULATIONS
- Aisha Begum Ansari
Securities and Exchange Board of India (‘SEBI’) had
specified the formats for disclosures under Regulation 7 of
SEBI (Prohibition of Insider Trading) Regulations, 2015 (‘PIT
Regulations’) on 11th May, 2015 and thereafter revised the
formats on 16th September, 2015.
SEBI has revisited the formats and carried out further
modifications to align the format with amendments in the
PIT Regulations and certain edits for clarification purpose,
vide circular dated 9th February, 2021 with immediate
effect.
This article provides a gist of the amendments carried out in
the formats. Before discussing the amendments, a brief
synopsis of various disclosure requirements under regulation
7 of PIT Regulations is as under:
Read
more
5MAHARASHTRA STAMP ACT AMENDED TO
CLARIFY LEGAL STAND IN CASE OF
MORTGAGE DEEDS EXECUTED FOR DISTINCT
TRANSACTIONS
- Aanchal Kaur Nagpal
Stamp duty computation, especially in case of complex
transactions involving multiple transactions being given
effect vide a single instrument, received the sanctity of
Hon’ble Supreme Court (SC) in a landmark judgement in
case of Controlling Revenue Authority v. Coastal Gujarat
Power Ltd, where the SC upheld payment of separate
stamp duty for different transactions involved interpreting
Section 5 of Gujarat Stamp Act, 1958. Following the said
judgement, Maharashtra stamp authorities rolled out a
circular on September 28, 2015 informing the stand taken by
SC; however, no amendment was carried out in
Maharashtra Stamp Act, 1958.
Further, it was observed by the stamp authorities that in
view of rate difference in case of stamp duty on equitable
mortgage (mortgage by deposit of title deeds) as per
article 6 (1) and simple mortgage as per article 40, parties
played about the same in the instruments thereby creating
difficulties in adjudication of amount of proper stamp duty
chargeable for them.
Read
more
6SNAPSHOT OF COMPANIES (SHARE CAPITAL
AND DEBENTURES) AMENDMENT RULES, 2021
- Team Vinod Kothari & Co.
The Companies (Share Capital and Debentures)
Amendment Rules, 2021 has been notified on 11th February,
2021. It has the effect of reducing the minimum offer period
from existing 15 days to 7 days w.e.f. 1st April, 2021.
Our snippet on the same can be accessed below.
Read
more
7RBI DIRECTS NBFCS TO LIMIT FRESH
INVESTMENTS FROM FATF NON-COMPLIANT
JURISDICTIONS TO 20% OF VOTING RIGHTS
- Vinita Nair
Reserve Bank of India (RBI) continues to strengthen the
regulations to govern non-banking financial companies
(NBFCs) that are regarded as shadow banks. With the onset
of year 2021, RBI rolled out a discussion paper on the revised
regulatory framework for NBFCs, thereby adopting a scalar
approach).
Our article as published in Moneylife can be accessed
through the link below:
https://www.moneylife.in/article/nbfcs-asked-to-limit-fresh-
investments-to-20-percentage-of-voting-rights-from-fatf-
non-compliant-jurisdictions/62964.html
Read
more
8UNDERSTANDING THE BORDERLINE BETWEEN
IMPLEMENTING AGENCIES AND
BENEFICIARIES
- Shikha Bansal And Payal Agarwal
Corporate Social Responsibility or CSR regime has
undergone a drastic change with the issue of the
Companies (Corporate Social Responsibility Policy)
Amendment Rules, 2021, vide notification dated 22nd of
January, 2021 (‘Amendment Rules’) brought by MCA. The
Amendment Rules have come into force with immediate
effect, except for certain relaxations otherwise provided for
in the said rules.
One of the substantive changes which the Amendment
Rules have brought in, pertains to CSR implementation.
While the companies always had the liberty to ‘undertake’
CSR activities either itself or through certain ‘entities’; the
Amendment Rules take a step ahead in regulating such
entities by prescribing registration requirements, etc.
However, there are more important questions, for example,
– with newly introduced provisions as to ‘ongoing projects’
and requirement of transfer of ‘unspent amount’ to
scheduled funds and related ‘penal’ provisions (which were
not there earlier), do we need to relook how the amounts
‘disbursed’ to such entities shall be treated?
Read
more
9EXTENDING PROVISIONS OF THE COMPANIES
ACT, 2013 TO LIMITED LIABILITY PARTNERSHIPS
- Team Vinod Kothari & Co.
As per MCA news and updates certain provisions of
Companies Act, 2013 (“CA, 2013”) will now be extended to
Limited Liability Partnerships (“LLPs”). Below is a snippet
covering list of provisions of CA, 2013 extended to LLPs.
Read
more
10LLPS SLATED TO MORE STRINGENT REFORMS
- Payal Agarwal
Limited Liability Partnerships (LLPs) being a hybrid form of
entity with characteristics of both companies as well as
partnerships are governed by the provisions of Limited
Liability Partnership Act 2008 (LLP Act). LLPs are popular
since due to less compliance requirements as compared
with a company.
In view of the existing framework for LLPs, the Ministry of
Corporate Affairs (MCA) has published a news material on
its website on 18th February 2021 stating that certain
provisions of the Companies Act 2013 (the Act) will be soon
made applicable on the LLPs. Having said that while this
news has been flashed, the notification in this regard is still
not available.
While the notification in this regard is still not in place as well
and so as the rules containing the details of the
amendment, however, the notice on the MCA website has
indicated the various sections of the Act which may soon
be made applicable on the LLPs.
Read
more
11EASE OF DOING BUSINESS: DEBT LISTED
COMPANIES SLIDE DOWN TO UNLISTED
COMPANIES
- Vinita Nair
With an intent to promote listing of securities and bond
market, Ministry of Corporate Affairs (MCA) in consultation
with Securities and Exchange Board of India (SEBI),
intended to exclude certain class of companies from the
definition of ‘listed company’ as defined under Section 2
(52) of Companies Act, 2013 (CA, 2013). The existing
provisions of CA, 2013 applicable to a listed company did
not distinguish between private companies and public
companies. As a result, private companies were
unintendedly subject to similar compliance as a public
company. A browse through the list of companies with listed
privately placed debentures, shows private companies
abound in the list. On the other hand, public companies
that listed debt securities on a private placement basis,
were subject to similar compliances as a public company
issuing debt securities to public.
Accordingly, one of major amendments proposed in
Companies (Amendment) Act, 2020 (CAA, 2020) was to
revisit definition of listed company and provide a suitable
carve out to certain class of companies to be determined
in consultation with SEBI. Read
more
12MCA EASES THE REQUIREMENT FOR SETTING
UP AND CONVERSION OF AN OPC
- Abhishek Saraf
The concept of One Person Company (“OPC”) was
discussed for the first time in India in the year 2005 by the JJ
Irani Expert Committee which suggested that with
increasing use of information technology and computers,
emergence of service sector, the entrepreneurial
capabilities of the people must be given an outlet for
participation in economic activity and was of the opinion
that it was not reasonable to expect that every
entrepreneur who was capable of developing his ideas and
participating in the market place should do it through an
association of persons. It may therefore, be possible for
individuals to operate in the economic domain and
contribute effectively. With this, the Committee
recommended the formation of OPC. It suggested that
such an entity may be provided with a simpler legal regime
through exemptions so that the small entrepreneur is not
compelled to devote considerable time, energy and
resources on complex legal compliance.
OPC is a combination of a sole proprietorship and an
incorporated form of business and takes the form and is
registered as a private company. Read
more
13CONTACT US
KOLKATA OFFICE
1006-1009, Krishna Building
224, A. J. C. Bose Road
Kolkata- 700017, India
Phone: +91-33-22817715/ 1276/ 3742 , 033-40010157
MUMBAI OFFICE
403-406, 175, Shreyas Chambers, D. N. Road, Fort,
Mumbai-400001
Phone: 022-43472206
NEW DELHI OFFICE
A-467, First floor, Defence Colony
New Delhi – 110024
Phone: 011-41315340
Mail to:
payal@vinodkothari.com
14You can also read
