Guidelines On First Loss Default Guarantee: Brief Summary And Takeaways

Preface and regulatory developmentsWith increased penetration of internet and technological innovation, there has been a surge of FinTech players. Especially in digital lending space, there has been an increased reliance placed by the regulated entities (i.e., the banks and non-bank financial companies who are permitted to carry out lending business) (“RE”) upon third party lending service providers (“LSPs”). The LSPs (mostly unregulated) are essentially technology-centric entities which have...

Economic Offences Are Serious But Severity Of Allegations Cannot Be Justification For Pre-Trial Incarceration: Delhi High Court

Observing that severity of allegations cannot be a justification for pre-trial incarceration, the Delhi High Court has granted bail to a Director of M/s Parul Polymers Pvt Ltd. in a case under Section 447 of the Companies Act, 2013.Justice Anup Jairam Bhambhani said, “Needless to add, that nothing in this judgment should be taken to detract from the position that economic offences are serious in nature, and the allegations against the petitioner and other co-accused, if proved at the trial, must...

MCA Approves Withdrawal Of 7,338 Prosecutions Pending In Courts Under Companies Act

The Ministry of Corporate Affairs (“MCA”), Government of India has issued a Press Release dated 14.07.2023, notifying that it has approved withdrawal of another 7,338 prosecutions pending before courts under Special Arrears Clearance Drive-II, in order to promote Ease of Doing Business and decriminalize compoundable offences under Companies Act, 2013. Withdrawal will lead to 21.86% reduction in pending prosecutions being pursued by Central Government. However, prosecutions related to...

Using Fairness Opinions By IFAs To Improve India’s RPT Framework

Related Party Transactions [‘RPT’] refers to dealings between parties with an existing relationship or a common motive. Due to concerns with conflicts of interest and abuse of power in such transactions, the Securities and Exchange Board of India [‘SEBI’] has put in place measures in the Companies Act as well as the SEBI Listing Obligations and Disclosure Requirement [‘LODR’] Rules to prevent misuse of the power that the agents possess. However, the same have fallen short in the past....

Singh & Singh Law Firm LLP Announces Its Attorney Promotions For 2023

Amidst a spree of promotions, Singh & Singh Law Firm LLP recently announced its promotions at the onset of the new financial year. The matrix is a well-balanced mix of attorneys with a range of skills and experiences being promoted across various profiles. Rohan Swarup, Kunal Vats, Nitya Sharma, and Devanshu Khanna are now Associate Partners in the Firm. This increases the number of Associate Partners to an updated count of 7. In addition to the new deck of Associate Partners, the...

Prosecution Can’t Only Recite From Complaint To Oppose Bail In Cases With Additional Conditions For Bail: Delhi High Court

The Delhi High Court has observed that the prosecution cannot only recite from a complaint or simply say that it has material against an accused in respect of those offences for which twin conditions are stipulated in a statute for grant of bail. Justice Anup Jairam Bhambhani said that the prosecution must show how the material collected during investigation supports allegations in the complaint and how they apply against the accused. “To reiterate, the opposition by the public prosecutor must...

Corporate Mismanagement And Oppression

Corporate mismanagement and oppression are persistent issues that have plagued organizations and their employees for many years. Mismanagement in various forms, including financial, ethical, and operational mismanagement, has resulted in decreased productivity, low morale, and reduced profitability. On the other hand, corporate oppression, which includes discrimination, harassment, and abuse, has dire consequences, such as employee turnover and decreased productivity. This research paper...

Small Shareholders Director Under The Companies Act, 2013

The concept of small shareholder director was introduced to safeguard the interests of small shareholders in a company. The appointment of a small shareholder director is a measure taken to ensure that the small shareholders of a company are adequately represented and to prevent the board of directors from taking any decisions that are detrimental to the interests of small shareholders. According to the Companies Act, 2013 small shareholders are those who have relatively less shares...

No Mandatory Requirement Of Aadhaar For MSME Udyam Registration: Centre To Gujarat High Court

The Ministry of Micro, Small and Medium Enterprises (MSME) on Monday informed the Gujarat High Court that there is no mandatory requirement of Aadhaar Number for registration of businesses with MSME Udyam Registration.The Court was hearing a PIL seeking quashing of the part of the Notification dated June 26, 2020 issued by MSME, so far as it allegedly mandatorily demands Aadhaar Number from the business persons for MSME Udyam registration.It was the grievance of the petitioner that by the...

Protection Of Minority Shareholders And Related Party Transactions

The Company is an artificial entity incorporated under the Companies Act, 2013[1] (hereinafter, ‘Company Act’), and conducts its affairs through its board of directors who owe a duty to take care towards all the stakeholders of the company and to conduct the affairs of the company in a neutral and unbiased manner. Shareholders of a Company can be in broad terms divided into majority shareholders and minority shareholders. Majority shareholders are those who have more than 51% or more...

Lifting Or Piercing Of Corporate Veil

Owing to the rising economic development and advancements within the corporate framework, the corporate world has witnessed various false statements, frauds, and insider trading. The concept of 'Corporate Veil' came into being in order to safeguard the members from the actions of the company. This piece of writing will discuss the "Piercing of Corporate Veil" underneath the "Companies Act of 2013". Concept Of Corporate Veil: "Salomon V. Salomon And Co. Ltd": The Salomon case...

A Move Towards Ease Of Doing Business: Amended Definition Of A Small Company

The Ministry of Corporate Affairs ("MCA") has recently implemented a number of initiatives aimed at making it easier for companies to conduct their business and function with ease, a few of these are as follows: extending fast track mergers to start-ups, encouraging the incorporation of One Person Company ("OPC"), decriminalizing certain aspects of the Companies Act, 2013 r/w the allied rules made thereunder ("Companies Act") and other similar steps to facilitate ease of doing business....