Corporate Professionals Blog

Employee Welfare Trust has emerged as an important nexus for rewarding the most valuable asset of the Organisation i.e. Employees for their association and performance. With the promulgation of the New Companies Act, the framework involving designing and functioning of Employee Welfare Trusts will undergo various modalties as Rule 16 of the Companies Act, 2013 casts certain stipulations for provisioning of money by the Company for purchase of its own shares for the benefits of the Employees. Ms. Mohini Varshney Assistant Vice President +919971673332 mohini@indiacp.com The gist of the stipulations imposed by the Companies Act, 2013 for provisioning of money for purchase/subscription of the shares via Trust Route are outlined as follows:

In a step towards ensuring lucidity in the regime, the Capital Market Regulator, SEBI, has floated new Corporate Governance Norms and revised Clause 35B with the basic premise of promoting interest of varied stakeholders on one hand and aligning the provisions of extant Clause 49 of the Listing Agreement with the Companies Act, 2013 on the other. The new norms aim to intensify the corporate governance framework for listed companies in India and are considered as a step forward to increment harmonisation in SEBI & MCA laws.

Central Board of Direct Tax (CBDT) vide its letter dated April 11th, 2014 addressed to all Chief Commissioner of Income Tax, noted that, recently, schemes of amalgamation, were designed, with retrospective dates, seeking set off of losses of loss making company with the Profits of the profit making company of the Groups and hence adversely impacting the public revenue. It further reiterated that, since the Income Tax Department has not been delegated power to scrutinize the documents, hence, its intervention in the Scheme, were rejected by the High Court as it has no locus standi to oppose such scheme.

The much awaited Companies Act, 2013 (“New Act”) has finally been notified to replace most of the provisions of the Companies Act, 1956 (“Old Act”). The economic scenario globally has undergone major transformation and structural changes and promulgation of the New Act is a step towards globalization and is a successful attempt to meet the changing environment and liberalization. The New Act is progressive and futuristic as it duly envisages the technological and legal developments. The New Act aims to: Mr. Pankaj Singla Sr. Associate +919971508320 pankaj@indiacp.com revise and modify the Companies Act, 1956 in consonance with the changes in the national and international economy. bring about compactness by deleting the provisions that had become redundant over time and by regrouping the scattered provisions relating to specific subjects;  re-write various provisions of the Old Act to enable easy interpretation;  delink the procedural aspects from the substan...

With the notification of 282 sections of the Companies Act 2013 along with rules , more than 50% of the new law has become operational w.e.f 1st April 2014. The rules notified are very exhaustive and therefore it will take time to acquaint with its nitty-gritties. In order to provide you an overall understanding of the new law taking in account the notified rules , we have created a list of top 100 highlights of the law. The same is outlined below under various topics, hope you will find the same useful.

The Competition Commission of India (CCI) has vide notification F. No. CCI/CD/Amend/Comb. Regl./2014 dated 28th March, 2014 made The Competition Commission of India (Procedure in regard to the transaction of business relating to combinations) Amendment Regulations, 2014 to amend the existing CCI (Procedure in regard to the transaction of business relating to combinations) Regulations, 2011. Ms. Deepika Vijay Sawhney Partner ++919818316936 deepika@indiacp.com Following are the highlights of the amendments made to the Combination Regulations: 1. Sub-regulation 5 has been added to Regulation 9 that seeks to cover combination transactions that are structured in such a manner so as to avoid the requirement of notice under Regulation 5 in respect of the whole or a part of the combination. It has been clarified that the filing of notice under Regulation 5 shall therefore be determined with respect to the substance of the transaction.

Mr. Chander Sawhney Vice President +9810557353 chander@indiacp.com RBI in its monetary policy dated 1st April 2014 as regards Foreign Direct Investment (FDI), has decided to withdraw all the existing guidelines relating to valuation in case of any acquisition/sale of shares and accordingly, such transactions will henceforth be based on acceptable market practices. Operating guidelines will be notified separately.

MCA notifies rules for additional chapters MCA vide its notification dated 28th & 31st March 2014 issued rules for additional 4 chapters under the Companies Act 2013. Till now the rules have issued for 14 chapters. New rules issued are : Chapter XXVI - Nidhi Rules 2014 Chapter XXIX - Companies (Adjudication of Penalties ) Rules 2014 Chapter XXIX - Companies (Miscellaneous ) Rules 2014 Chapter V - The Companies (Acceptance of Deposits) Rules, 2014 Chapter X - The Companies (Audit and Auditors) Rules, 2014