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Showing posts from May, 2014

Types of Companies under New Companies Act-2013

With new testament of Corporate law in force has introduced several different types of companies with special features.
ONE PERSON COMPANY (OPC) One Person Company is defined in Sub- Section 62 of Section 2 of The Companies Act, 2013, which reads as follows: 'One Person Company means a company which has only one member' It shall also be important to note that Section 3 classifies OPC as a Private Company for all the legal purposes with only one member. All the provisions related to the private company are applicable to an OPC, unless otherwise expressly excluded. ØOnly a natural person who is an Indian citizen and resident in India- üshall be eligible to incorporate a One Person Company; üshall be a nominee for the sole member of a One Person Company. ØNo person shall be eligible to incorporate more than a One Person Company or become nominee in more than one such company. ØNo minor shall become member or nominee of the One Person Company or can hold share with beneficial interest. ØT…

Related Party Transaction under New Companies Act 2013

The ministry has now released rules for ten chapters of the Companies Act. Notifications related to National Financial Reporting Authority (NFRA), Investor and Education Protection Fund, sick companies, special courts and National Company Law Tribunal (NCLT), among others, would come later. The latest rules pertain to registration of charges, management and administration, declaration and payment of dividend, meetings of board and its powers, appointment and qualification of directors. Last week, the ministry had notified more than 180 sections of the new Companies Act. The new law -- Companies Act, 2013 enacted on 29 August 2013 - replaces the nearly 60-year old Companies Act, 1956. The rules have brought clarity on 'related party' transactions, independent directors and imposes stiff norms on companies taking deposit. The "related party" under the Act, which earlier included a number of company executives, now leaves out all the functional heads in a company as relate…

NBFC & Companies Act 2013 w.r.t. issue of Debentures

With the new testament of corporate law, Companies Act, 2013 to be effective from April 01, 2014, NBFC are facing lack of oxygen supply for their survival as to ensure that debenture issuances did not trespass into the domain of public deposits and were beginning to understand that optionally convertible debentures market will die out slowly that the rules have thrown language open to interpretation. Section 71 of the Companies Act, 2013 along with the rules implies that the debenture issuances have to be secured by specific moveable and immoveable properties. NBFCs may face a rocky time in finding these specific moveable and immoveable properties for issue of secured debenture.  Section 71 of the Companies Act, 2013 states that – 1.A company may issue debentures with an option to convert such debentures into shares, either wholly or partly at the time of redemption: Provided that the issue of debentures with an option to convert such debentures into shares, wholly or partly, shall be ap…

One Person Company

Introduction The revolutionary new concept of 'One Person Company' (OPC) has been introduced by the Companies Act, 2013. This concept of OPC was first recommended by the expert committee of Dr. JJ Irani in 2005. OPC provides a whole new bracket of opportunities for those who look forward to start their own ventures with a structure of organized business. OPC will give the young businessman all benefits of a private limited company which categorically means they will have access to credits, bank loans, limited liability, legal protection for business, access to market etc all in the name of a separate legal entity. Though the concept of OPC is new in India but it is a very successful form of business in UK and several European countries since a very long time now. The concept with special features One Person Company is defined in Sub- Section 62 of Section 2 of The Companies Act, 2013, which reads as follows: 'One Person Company means a company which has only one member' It s…