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% shareh...

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 y...

Giving Loans and making Investment is quite common in big companies because there is always a tendency of routing of funds from one entity to another. Therefore, knowing proper compliances is inevitable, else your company can be caught up by the regulator. Here is a brief process you must follow while giving a loan or making the investment:

Few Important points regarding stamp duty on share certificate: 1. Stamp duty is payable on issue price not on the value of the security. 2. In a case of a large number of shares, stamp duty can be payable in a lump sum and this fact should be mentioned on share certificate. 3.  STAMP DUTY ON SHARE IS STATE SUBJECT BUT STAMP DUTY ON DEBENTURE IS UNION SUBJECT . 4. The company should pay the stamp duty according to the state in which the registered office of the company is situated, not in the state where Board Meeting is held to consider an issue of shares. 5. One issue is whether the stamp duty is  payable on duplicate/split share certificate  or not. Section3 of the Indian Stamp Act states that every instrument mentioned in the schedule of the Indian stamp act which, not having been previously executed by any person is executed in India; shall be chargeable with stamp duty of the amount indicated in  schedule I . 6. Stamp duty is payable on a fa...

If there is an audit committee, then first the audit committee shall consider the appointment of the auditor and recommend the same to the Board.

MEANING: Private placement of securities is one of the modes to raise funds. The term 'private placement' means any offer of securities or invitation to subscribe (purchase) securities to a selected group of persons by a company. The offer or invitation to subscribe securities on a private placement basis can not be made to more than 200 persons (excluding QIB and employees) in a  financial year . It was decided in  Sahara India Real Estate Corpn. V .SEBI [2012]  that if an unlisted company made an offer of shares or debentures to more than the threshold limit of 200, it is mandatory for the company to follow 'public offer' norms and SEBI has proper jurisdiction over such issue. PRE-ISSUE COMPLIANCE : If it is an unlisted company, then make sure the entire holding of securities of its promoters, directors, KMP has been dematerialized. [ September 10, 2018 MCA Notification] Make sure proposed issue must be as per Article of Association ( AOA ) Authorized Capital ...

1. Hold board meeting to consider a new name and pass a resolution to apply for reservation of new name. 2. File an application through "RUN" on MCA Portal for reservation of name. Once an application is approved, then the new name is available for a period of 60 days from the date of approval. 3. Hold Extra-Ordinary Meeting (EGM)to pass a special resolution subject to the approval of Central Government. 4. File an application in Form No. INC.24 for change in name. 5. File a copy of a special resolution together with explanatory statement and Central Government approval in Form MGT.14 6. The ROC issue a new certificate of incorporation in Form INC.25 Note: Such change in name shall be noted in every copy of MOA