Latest news with #CompanyLaw
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Business Standard
6 days ago
- Business
- Business Standard
Trump trade tariffs: MCA planning to ease compliance burden for MSMEs
As part of a broader strategy to shield domestic industry from US tariffs, the Ministry of Corporate Affairs (MCA) is planning to ease compliance reforms for medium, small and micro enterprises (MSMEs), according to official sources. 'We are looking at it very seriously and taking inputs from the MSME ministry as well,' a government source said. The MCA may also consider amendments to the existing Companies Act for simpler certification processes for MSMEs and doing away with certain compliances for such companies, sources said. Some of the measures which were recommended in the expert committee report regarding Company Law in 2022 included reducing fines and penalties which are designed keeping larger companies in mind. Suggestions made by the Federation of Indian MSMEs (FISME) include exemption for unlisted companies up to a turnover of ₹1,000 crore from mandatory Corporate Social Responsibility (CSR) obligation to provide them with greater flexibility in their board structure and reduce their compliance costs. The MSME body has sought relaxation in the requirement to appoint independent and women directors, which it says can be costly and time-consuming for unlisted companies, especially those with limited resources. With a global environment marked by trade tensions and geopolitical volatility, the government is expected to look for ways to support domestic industries. 'Direct assistance to MSMEs and assistance through processes - both are important since macro-economy may not be impacted much by tariffs, but MSMEs will face some challenges and require support from the government,' said Madan Sabnavis, chief economist, Bank of Baroda. Sabnavis said that help with administrative hassles may not give direct support to MSMEs, but would still bring ease of doing business for the sector. Experts said that the government should allow self-certification or deemed acceptance for various procedures under Companies Act, instead of demanding a host of documents from MSMEs. 'They could do risk profiling and have automated acceptance for smaller companies. Departments across governments often ask for the same data and if there was better sharing of information between ministries, it would also ease compliance burden on MSMEs,' an industry expert, who did not wish to be named said. According to the Ministry of Statistics & Programme Implementation, MSME contribution to the country's GDP was marginally lower in 2023-24 to 31.1 per cent, compared to 31.3 per cent in the previous year. Under the present Companies Act, MSMEs are granted certain exemptions. For instance, the requirement that the cash flow statement should be part of the financial statement has been made optional. Small companies are not required to rotate auditors and disclosures, such as auditor's report on internal financial controls do not apply to MSMEs. Small companies are also exempt from requirements of pre-certification of forms by professionals. All companies with authorised capital up to ₹15 lakh or with up to 20 members where no share capital is applicable are charged zero fees for incorporation.
Mint
19-05-2025
- Business
- Mint
IDFC First Bank shareholders reject resolution to allow board seat to PE firm Warburg Pincus arm
IDFC First Bank on Monday said its shareholders have rejected the proposal to allow global private equity firm Warburg Pincus' arm to nominate a non-executive director on the bank board. Last month, IDFC First Bank board had approved a preferential equity issue of about ₹ 4,876 crore to Currant Sea Investments BV, an affiliate company of investor Warburg Pincus LLC. Following that, the bank sought shareholders' nod through postal ballot to amend the Articles of Association of the bank. It sought their approval to provide a right to Currant Sea Investments BV(or any of its assignees) to nominate one non-retiring non-executive director by way of a special resolution. As per the results of the postal ballot disclosed to the stock exchanges on Monday, only 64.10 per cent of the votes were in favour of the resolution, while 35.90 per cent were against it. "... The special resolution... has not been passed due to lack of requisite majority," IDFC First Bank said in a BSE filing. Under Company Law, a special resolution is passed if the proposal gets at least 75 per cent of votes in favour of it. In the IDFC First Bank special resolution, votes were cast by 76.08 per cent of the total institutional investors, and 27.53 per cent of the total non-institutional or retail investors. Notably, 51.30 per cent of institutional investors in the bank voted against the resolution, while the remaining 48.7 per cent were in favour of the appointment of a director by Currant Sea Investments on the bank board. However, 98.67 per cent of the total non-institutional or retail investor votes were in favour of the resolution and 1.33 per cent against it. Thus, the total votes polled by institutions and retail investors in favour of the resolution stood at 64.10 per cent and 35.90 per cent against it. Separately, the bank's shareholders have approved the other two resolutions through postal ballot. One of them pertained to a special resolution to issue, offer and allot compulsorily convertible cumulative preference shares of ₹ 7,500 crore on preferential basis, to be compulsorily converted to equity shares. It was passed with 99.18 per cent of votes in favour. The second was ordinary resolution to re-classify authorised share capital of the bank and consequent amendment in the capital clause of the Memorandum of Association of the bank. This saw 99.61 per cent votes polled in favour. Earlier this month, Warburg Pincus, through its arm Currant Sea Investments, had sought Competition Commission of India (CCI) nod to acquire 9.99 per cent stake in IDFC First Bank by subscribing to over 81.26 crore compulsorily convertible cumulative preference shares. Shares of IDFC First Bank were trading at ₹ 69.14 apiece, down 0.16 per cent over previous close on BSE.
Time of India
19-05-2025
- Business
- Time of India
IDFC First Bank shareholders reject resolution to allow board seat to Warburg Pincus arm
IDFC First Bank on Monday said its shareholders have rejected the proposal to allow global private equity firm Warburg Pincus' arm to nominate a non-executive director on the bank board. Last month, IDFC First Bank board had approved a preferential equity issue of about Rs 4,876 crore to Currant Sea Investments BV, an affiliate company of investor Warburg Pincus LLC. Following that, the bank sought shareholders' nod through postal ballot to amend the Articles of Association of the bank. It sought their approval to provide a right to Currant Sea Investments BV(or any of its assignees) to nominate one non-retiring non-executive director by way of a special resolution. As per the results of the postal ballot disclosed to the stock exchanges on Monday, only 64.10 per cent of the votes were in favour of the resolution, while 35.90 per cent were against it. by Taboola by Taboola Sponsored Links Sponsored Links Promoted Links Promoted Links You May Like Play War Thunder now for free War Thunder Play Now Undo "... The special resolution... has not been passed due to lack of requisite majority," IDFC First Bank said in a BSE filing. Under Company Law, a special resolution is passed if the proposal gets at least 75 per cent of votes in favour of it. Live Events In the IDFC First Bank special resolution, votes were cast by 76.08 per cent of the total institutional investors, and 27.53 per cent of the total non-institutional or retail investors. Notably, 51.30 per cent of institutional investors in the bank voted against the resolution, while the remaining 48.7 per cent were in favour of the appointment of a director by Currant Sea Investments on the bank board. However, 98.67 per cent of the total non-institutional or retail investor votes were in favour of the resolution and 1.33 per cent against it. Thus, the total votes polled by institutions and retail investors in favour of the resolution stood at 64.10 per cent and 35.90 per cent against it. Separately, the bank's shareholders have approved the other two resolutions through postal ballot. One of them pertained to a special resolution to issue, offer and allot compulsorily convertible cumulative preference shares of Rs 7,500 crore on preferential basis, to be compulsorily converted to equity shares. It was passed with 99.18 per cent of votes in favour. The second was ordinary resolution to re-classify authorised share capital of the bank and consequent amendment in the capital clause of the Memorandum of Association of the bank. This saw 99.61 per cent votes polled in favour. Earlier this month, Warburg Pincus, through its arm Currant Sea Investments, had sought Competition Commission of India (CCI) nod to acquire 9.99 per cent stake in IDFC First Bank by subscribing to over 81.26 crore compulsorily convertible cumulative preference shares. Shares of IDFC First Bank were trading at Rs 69.14 apiece, down 0.16 per cent over previous close on BSE.
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Business Standard
15-05-2025
- Business
- Business Standard
NCLT a creature of statute, should stick to that: NCLT Chairperson
The National Company Law Tribunal (NCLT), Delhi, on Thursday reminded litigants that the tribunal is bound by the statutes of the Insolvency and Bankruptcy Code (IBC) and the Companies Act and should not operate beyond those frameworks. "Don't stretch your power beyond the statute (IBC, Company Law). We are judges, prosecutors, executioners, recovery agents," said R Sudhakar, Chairperson of the NCLT, addressing a litigant who had cited sections from criminal law during proceedings. 'I am going through the Bhushan Power and Steel Limited judgment again. We should restrict the court to the Companies Act and IBC. The Supreme Court has clearly said do not stretch your power beyond the statute. A number of applications are passed left, right and centre,' Justice Sudhakar added. The Supreme Court, on 2 May, had declared JSW Steel Limited's resolution plan for BPSL 'illegal' and ordered the liquidation of the company—four years after it was acquired by JSW Steel under the IBC. The matter has now returned to NCLT Delhi for further resolution. Limited Capacity Earlier this week, during a hearing on the BPSL liquidation proceedings, Justice Sudhakar noted that the NCLT lacked the capacity to revisit large and complex bankruptcy cases resolved six years ago, given its limited resources. 'So many issues are happening in the tribunal every day. The number of benches needs to be increased. If you want to have valuable judicial time under this pressure, it's very difficult for any member to do that effectively. Even if I have to check a small application filed with all its necessary safeguards, I need more time,' he said. 'For example, in this Bhushan Steel case, I want a special bench just for this. These interlocutory applications (IAs) need to be adjudicated by a special bench, and that takes time… Where are the members?' the NCLT Chairperson asked. He said the members of the NCLT are overburdened by the volume of cases. Several BPSL creditors and stakeholders have filed fresh claims following the Supreme Court's ruling. 'This is what I've been telling Parliament. Please double the number of members. At least this issue can't continue as it is,' Sudhakar said. 'I literally push my members to achieve what we've managed so far,' he remarked.
Daily Tribune
24-03-2025
- Business
- Daily Tribune
How to gain best results from corporate governance
A basic principle of corporate governance (CG) relates to the Board of Directors of the company, wherein the company shall be headed by an effective, collegial and informative Board of Directors. Herein, if you are a Board member, you need to ask yourself, where do we stand in this? To achieve the goal, all members of the Board of Directors should understand the role and responsibilities of the Board as stipulated in the law 'Company Law', the relevant Articles & Memorandum of Association of the company, the Board Charter, the corporate culture and the corporate governance code. This stand or mission, in particular, highlights that the role of the Board of Directors is different from the role of the shareholders of the company (whose interests the Board serves) and, also, the role of the executives officers working in the company. In particular, members of the Board of Directors should fully understand the Boards fiduciary duties of care and degree of loyalty to the company and the shareholders. Members of the Board of Directors are responsible both individually and collectively for performing these responsibilities, which cannot be transferred or delegated to other persons or to other bodies of the company. When a new Director is appointed, the Chairman of the Board assisted by the legal advisor and compliance officer of the company, should review the Boards role and duties with all members of the Board of Directors, particularly covering the legal and regulatory requirements and the Code of Corporate Governance. The company should have a written appointment letter agreement with each member of the Board of Directors including the powers and duties of the director in addition to other matters relating to his appointment including his term, the time commitment envisaged, the committee assignment if any, his remuneration and expense reimbursement entitlement, and his access to independent professional advice when and if needed. The Board of directors should consider adopting a formal Board 'Charter' or other statement specifying matters which are reserved to it, which should include but need not be limited to the specific items stated in the Company Law. An alternative is a formal statement or by-law stating the functions and authority delegated to the officers as mentioned in the Company Law. The Board of Directors should be collegial and deliberative for the sake of gaining the benefit of each member, of the Board of Directors, judgment and experience. The Chairman should take an active lead in promoting mutual trust, open discussion, constructive dissent and support for decisions after they have been made. The Board of Directors should meet frequently, usually more than the minimum required by law. All members of the Board of Directors should attend the meetings, and the Board of Directors should maintain informal communication between meetings. Unexcused absence(s) is not welcomed as it may disturb the functions of the Board of Directors and indicates that the person is not the type of those needed for efficient Board directorship as stipulated in the Corporate Governance Code. Regarding attendance, more control measures are required and continuous absence could lead to termination of membership. Commitment and accountability reflect the effectiveness of the Board and are essentially required and should be observed by all members of the Board of Directors, taking in account that they are supposed to excel and give good example to all related parties in the company, the shareholders and community stakeholders. If you are a Board member, you need to ask yourself where do you stand in this and are you effective enough to make your Board of Directors more effective, as required for corporate governance purposes. An active role by each Board Director will lead to the best corporate governance results.
