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Showing posts from March, 2014

Companies Act: 1956 VS 2013- New Rules to the Game

The Companies Act, 2013- a new era for corporate India.  This modern legislation is to change the rules of game in Indian corporate law in the context of changing economic and business environment. To help decode the nuances and implications of this 2013 Act, we have analysed the key changes w.r.t. 1956 Act. The 2013 Act is more concise as compared to the 1956 Act, with just 470 sections and 7 schedules. There are over 300 references in the 2013 Act to Rules that may be prescribed to implement and operationalise those sections. Therefore, the full impact of the 2013 Act can only be understood when the related Rules get finalized and two are read together.
S.No. Particulars 1956 2013 Comments Number of members of Private Company Upto 50 Increased upto 200 Allows access to large pool of capital without the need to go public One Person Company No Provision Separate regime for ‘one person company’ introduced Allows individuals to adopt corporate structures for carrying out business unde…

Indian Hospitality Industry

Hospitality is one of the oldest and most complex and commercial activities in the world. India- a country with 5000 years old history, culture, religion, alternative medicine which fascinate both budget and luxury travelers alike. Tourism in India is the third largest foreign exchange earner accounting for 2.5% GDP. The World Travel and Tourism Council (WTTC) have named India as one of the fastest growing tourism industries for next 10-15 years. Hotels in India are broadly classified into 6 categories- (five star, four star, three star, two star, one star & heritage hotels) by the Ministry of Tourism, Government of India, based on the general features and facilities offered. The ratings are renewed every year. Foreign Trade Policies: Hotels & Restaurants are allowed to import duty free equipment & other items including liquor, against their foreign exchange earnings under the Served from India Scheme. Benefits of scheme earned by one service provider of a Group Company can n…

Regulating the Collective Investment Schemes in India

Collective Investment Scheme (“CIS”)- An investment scheme wherein several individuals come together to pool their money for investing in a particular asset(s) and for sharing the returns arising from that investment as per the agreement reached between them prior to pooling in the money. Many companies especially in semi-urban and rural areas are accepting deposits in their firm’s name and also promising two to three times returns in two to four years without taking any legal permissions. These ponzi schemes are running on the false promise of doling out high returns to the gullible investors. Ponzi scheme may be treated as either a chit fund or a collective investment scheme. But then a further complication arises who will regulate a ponzi scheme???? Collective investment scheme as a subject for monitoring came under the SEBI ambit after amendment to the SEBI Act, however there are several exemptions for schemes such as chit funds, nidhi funds, co-operatives, NBFCS. They are exempted…