Company Secretary and Law: Transfer of Industrial Undertaking through a schem...

Company Secretary and Law: Transfer of Industrial Undertaking through a schem...: "If a scheme of arrangement is introduced in respect of a third party acquisition for transfer of the entire undertaking, in which the s..."

Transfer of Industrial Undertaking through a scheme of arrangement!

If a scheme of arrangement is introduced in respect of a third party acquisition for transfer of the entire undertaking, in which the shareholders of transferor company receive cash consideration from transferee  company, will the receipt in the hands of shareholders suffer more tax than what would have been tax liability if the transfer had been organized through a voluntary winding up! What about the transfer being regarded in the first place as a slump sale? Oh See the issues ! 

Company Secretary and Law: class action suits are going to be a reality

Company Secretary and Law: class action suits are going to be a reality: "Companies Bill 2009 which seeks to replace the present company law is going to bring a new class of suits; class action suits! Clause 216 is..."

class action suits are going to be a reality

Companies Bill 2009 which seeks to replace the present company law is going to bring a new class of suits; class action suits! Clause 216 is going to create shareholder activism; with judicial activism we are going to see yet another chapter in the corporate legal history. Shareholders particularly minority shareholders will be entitled to join in suits commenced to attack corporate frauds! Representative action could trigger winding up of companies; change in management; takeovers! and even Government takeover!! This will bring best board practices! ICSI has timed it so nicely by bringing out a secretarial standard on board practices! Governance will improve; double speak will reduce; lest hidden agenda may get exposed! 

Corporate Powers of Board of Directors are derived from charter documents

Directors derive their corporate powers only when they act collectively as the Board of Directors. Unless otherwise covenanted due to any provision of the Companies Act or of any agreeement or the articles of association, decisions in a board meeting are taken by a majority vote. Individual directors do not enjoy any powers unless powers for managing the day-to-day affairs of the company or powers to execute any specific transaction or contract are conferred upon them by a resolution of the board of directors or by terms of their appointment or through instruments such as a power of attorney. Thus directors may be all powerful. But doing anything that the company itself could not have done lands them in trouble. While directors derive and exercise their powers in this manner, there is no need for any specific provision to show them their duties. They owe fiduciary duties to act in the best interests of the company in good faith for bonafide puproses. They are liable not only for statutory defaults but also for their acts of omission and commission! If they make personal gains by using corporate opportunities, they are liable to make good the their company the losses caused by their such acts!

corporatelawmadesimple: Validity of Acts of Directors - Defacto Doctrine C...

corporatelawmadesimple: Validity of Acts of Directors - Defacto Doctrine C...: "In order to be valid, the corporate power must be exercised by the board of directors which is validly constituted. Defects discovered in th..."

Validity of Acts of Directors - Defacto Doctrine Comes to Rescue Subject to Conditions!

In order to be valid, the corporate power must be exercised by the board of directors which is validly constituted. Defects discovered in the appointment / re-appointment of directors could be cured. Acts of directors done in good faith would not get invalidated merely because of subsequent discovery of defective appointment. This law is based on the defacto doctrine contained in Section 291 of the Companies Act, 1956. A shareholder or director who discovers the defect and notifies the concerned, does not need to do anything more than mere but proper intimation in order to stop the mischief from continuing. In order to derive the benefit of this doctrine, it must be proved [when any act of a directors is challenged in a court of law] that (i) the act of the director under challenge was done in good faith for the benefit of the company and (ii) when the impugned act was done, the director in question and the other directors who allowed / approved the impugned act, were not aware of the defect discovered.