Related Party Transactions- Compliances and Penalties for a Private Limited Company in India
For an Indian private limited company, related party transactions (RPTs) under the Companies Act, 2013 require: Non-compliance may render the contract voidable at the option of the company or its shareholders, may require ratification within a prescribed period, and could result in indemnification by the concerned director and monetary penalties under Section 188(5). 2.1 Section […]
Are Employment Bonds Requiring Reimbursement of Training Expenses Legally Valid in India?
This Article elucidates key aspects of employment bonds and their legal ramifications. It underscores the Supreme Court of India’s affirmation of the validity of clauses in employment contracts, particularly regarding reimbursement of training expenses should an employee resign prematurely. Furthermore, the requisites for a valid employment bond are delineated, emphasizing the importance of free consent, […]
“Seat” and “Venue” in Arbitration: Significance, Ambiguity, and Drafting Recommendations
Most arbitration agreements refer to the terms “seat” and “venue.” Understanding these terms is essential because they directly influence the conduct of arbitration proceedings and the jurisdiction of courts. This article, while outlining the current arbitration landscape in India, explains the legal significance of “seat” and “venue,” and highlights the importance of clearly drafting these […]
Legal Framework Governing Redeemable Preference Shares under the Companies Act, 2013
This Article provides an overview of the statutory framework regulating redeemable preference shares under the Companies Act, 2013 (“Act”), read with the Companies (Share Capital and Debentures) Rules, 2014 (“Rules”). The primary governing provision is Section 55 of the Act. Under Section 55(1), a company limited by shares is expressly prohibited from issuing irredeemable preference […]
Regulatory Framework Governing Slump Sale Under the Companies Act, 2013
This Article provides a detailed analysis of how a slump sale is regulated under the Companies Act, 2013, specifically in the context of a private limited company. Although the Act does not define “slump sale” (a concept primarily arising from income tax law), its execution by a company is governed principally through provisions dealing with […]
Procedure for removal and appointment of a Company Secretary under the Companies Act, 2013.
A. IntroductionThis memorandum provides a professional outline of the legally compliant process for removal andappointment of a new Company Secretary (CS) in accordance with the Companies Act, 2013.B. Legal FrameworkA Company Secretary may be removed due to:
Analysing Key Aspects of India’s DPDPA in Global Data Privacy Context
India is undergoing significant transformation with the enactment of the Digital Personal Data Protection Act, 2023 (DPDPA), to comprehensively gauge the significance of the DPDPA, it becomes essential to engage in a comparative exploration, against two influential global counterparts: the European Union General Data Protection Regulation (EUGDPR) which came into effect in 2018 and Singapore […]
Compliance Procedure: Fast Track Exit Mechanism under the Companies Act, 2013
The Fast Track Exit (FTE) mechanism under the Companies Act, 2013, offers an efficient way for defunct companies to strike off their names from the Register of Companies. It provides a simplified alternative to lengthy winding-up proceedings while ensuring protection of stakeholders’ interests. This article outlines the eligibility, procedure, and compliances required for companies opting […]