LAW DECODED

M ost people consider Boardroom  a picnic spot, and attending or holding board meeting is considered as a time-pass compliance process by most of the listed and unlisted companies. But, let me tell you board meeting minutes is one of the most important evidences of company's proper functioning, and the Courts also rely on papers of board meeting be it directors notice, attendance register, minutes etc. NOT HOLDING BOARD MEETING COULD RESULT INTO LAND DEAL CANCELLATION This case happened when NCLT declared the sale to be null and void in oppression & mismanagement case [ Elaine Info Solution Pvt. Ltd. v. Avenues India Pvt. Ltd. & others ] and the same uphold by NCLAT . FACTS OF THE CASE: Appellant : Elain Info Sol Pvt Ltd. ( A1 ) Respondents : J&A Avenues India Pvt Ltd ( R1 ) | Mrs. Vishnumolaka Govardhanamma ( R2 ) | Mr. V. Lakshmi Chenuchu Venkata ( R3 ) | Sub-registrar ( R4 ) R2 and R3 are the only directors of R1, and R2 is mother of R3. R3 held 50% shareholding of

As we are aware that after COVID-19 share prices of most of Indian Companies are trading at very low price and China wants to acquire shares of such companies at low price to control most of Indian Companies. Therefore, Government of India has reviewed the extant FDI policy for curbing opportunistic takeover/acquisitions of Indian companies and accordingly amended para 3.1.1 of Consolidated FDI Policy 2017. REVISED POSITION : A non-resident entity can invest in India, subject to the FDI Policy except in those sectors/activities which are prohibited. However, an entity of a country, which shares land border with India or where the beneficial owner of an investment into India is situated in or is a citizen of any such country, can invest only under the Government route. Further, a citizen of Pakistan or an entity incorporated in Pakistan can invest, only under the Government route, in sectors/activities other than defence, space, atomic energy and sectors/activities prohibited for fore

WHY NEED ARISE OF NEW PROFESSIONAL, A VALUER? As of today, there is neither standardised formula for valuing assets of corporates nor proper regulatory framework  governing the valuation professionals which are very important to unlock the real value of assets. Currently, there is an ad-hoc framework for valuation professionals and they are basically governed under Companies Act, and IBBI is empowered to implement regime of registered valuers.  For long, such valuation services are provided by CA & Merchant Bankers under various legislations such as Companies Act, Income Tax Laws, SEBI, FEMA etc in a non-standardised manner involving high degree of subjectivity of valuer which most of the time resulted into mis-matching between reality & excel figures .  Moreover, a valuation can not be a part-time services for CS or CA. This requires altogether different set of skills which are beyond Accounting, Tax, and Excel Sheets. Therefore, the panel headed by IBBI Chairperson M S Sahoo,

Indian Government has very good track record of killing our own country growth by taking stupid decisions. Our bureaucrats have taken oath not to learn from their past bad decisions. In this article, we will discuss how our Indian bureaucracy efforts are anti-growth. HOW STORY OF RED TAPISM STARTED? Idea-Vodafone merger was quite famous and it was said that this would help to boost Vodafone earning which have been showing very dismal picture. To go through this merger process, this deal had to navigate various regulatory windows and Department of Telecommunication (DoT) was one them. Such kind of departmental approval is required in big transactions. Our government departments are well equipped to squeeze, and they did in this case as well. DoT approved the merger but put one rider that merged entity would pay $1.1 Billion to Government in the name of Spectrum charges which was the source of the dispute between government & Idea-Voda (merged entity) to meet their fiscal targets. A

Why you must file ITR Most people incur losses or their income does not exceed basic basic exemption limit, so they think there is no need to file ITR but this notion is wrong. Everyone must file ITR because of following reason. WHY YOU SHOULD FILE INCOME TAX RETURN 1. If you do not file ITR then you can not carry forward of your losses. Carry forward of losses means that taking losses in the next year, and if you have any income next year then you may set off your previous year loss against such income.  For Example, in current year you did trading in share market and incurred a loss of Rs. 2 Lakhs but in next year your income from share market is Rs. 3 Lakhs, then first you should reduce last year loss from this income then you shall pay tax on balance amount i.e. Rs. 1 Lakh [3 Lakh - 2 Lakhs] . 2. Sometime various purposes you need last 3 or 4 years ITR such as taking credit card, applying for bank loan, passport etc. Therefore, even if you do not have any income, still you must

Gravity of COVID-19 outbreak is being felt across the globe. Since nobody has ever imagined such a situation, so preparing to fight against it seems quite difficult. For Government, to continue with lockdown or managing economy, becomes a mutually exclusive decisions. Every economic sector is finding itself difficult to navigate through such a tough time and running a country is literally like chewing glasses. But, this unprecedented situation will definitely change the rules of doing business and will help some sectors to enter into boom phase when the dust settles. So, let's discuss the impact of COVID-19 on various sectors: 1. TEXTILE SECTOR: After agriculture, textile is biggest employment generator in Indian economy. This pandemic hit this sector at a time when the sector is facing sluggish growth with wafer-thin margin. Eleven countries buy 41 % of India's cotton yarn and these countries have reported COVID-19 cases [ According to Cotton Textile Export Promotion Council

Holding-Subsidiary Company Relationship In this article, we will discuss the various criteria which create holding and subsidiary relationship between two companies. Understanding holding-subsidiary relationship important to know status of related parties between two companies and to consolidation of books of account. DEFINITION UNDER COMPANIES ACT, 2013 Section 2(46) defines, "holding company", in relation to one or more other companies, means a company of which  such companies are subsidiary companies; Explanation:- For the purpose of this clause, the expression  "company"  includes any body corporate;] To understand this definition, we need to look subsidiary definition as well which is given u/s 2(87) : " subsidiary company " or " subsidiary ", in relation to any other company (that is to say the holding company), means a company in which the holding company— (i) controls the composition of the Board of Directors; or (ii) exercises or contr

Winding up of Companies after IBC In this article, we will discuss how the provisions or route related to winding up of companies changed after the introduction of the Insolvency & Bankruptcy Code 2016 (the " IBC " or " Code ") because before the enactment of IBC, winding up of companies was under purview of Companies Act 1956 2013 .   HOW IBC CHANGE THE SCENARIO OF WINDING UP OF COMPANIES? Before the enactment of IBC the term Winding up was not defined in the Companies Act, 2013 as well as 1956. It was November 15, 2016 when section 255 of the IBC was notified which caused so many changes in Companies Act, 2013 ( through XI schedule ) and introduced new section 2(94A) in the 2013 Act to define the term Winding up as follows: "winding up under this Act or liquidation under Insolvency and Bankruptcy Code, 2016" It means after November 15, 2016 winding up of the companies  shall be governed by both laws. Now the important question is how both Acts shall

I am going to share the book review of Ind-AS Balance Sheet by Vishal Thakkar & Ramanujam.This book is about the latest accounting standards which are being implemented in India across various sectors. Overview This book is very basic about new set of accounting standards i.e. Ind-AS. Author just touched the various concept spread across various standard very briefly except few. This book is written for layman or persons who have not much accounting knowledge.  Plus Points  Simple language. Topics divided into very small part for easy understanding. Very small book comprising of 276 pages. A separate list of accounting terms have been defined in easy manner. Minus Points Not good for professionals Experts can not even have for quick reference because book has not been written in that way. Conclusion: You may this book if you have very little knowledge of accounting, else this will not be of much help in your professional life.

In this article I will discuss, when disclosure from a director is required under section 184 of the Companies Act, form MBP-1, and concept of interested director. CONCEPT Taking disclosure is quite logical because when the matter or any material contract is discussed at the board meeting then every director must be aware that who is interested in particular agenda item and must check the conflict of interest. PROVISIONS OF SECTION 184: Every director must disclose his interest in any contract or arrangement at the Board Meeting in which such contract/arrangement is being discussed. Such disclosure shall be given in Form MBP-1 .  If any director is interested in any such contract, then he shall be prohibited from participating in such meeting. [ Private limited company is exempted from this , Notification dated 5th June 2015 ] TRIGGER POINT TO DISCLOSE INTEREST? First meeting of board in which he participates as a director. Thereafter, at the first meeting of every financial year or if