Dive Deeper-1

Dive Deeper -1

S 186: While investment in a Wholly owned subsidiary is exempt from the provisions of S 186(3) , that investment which makes the other entity , a WOS of the holding company is subject to the compliance requirements specified in the said section. For example , if the holding co holds 60% of the paid up capital of a subsidiary , any further investment in the said subsidiary so as  to make it a WoS  is subject to the provisions of S 186(3). After the subsidiary becomes a WOS of the Holdco, any further investment in such WOS only is exempt from the provisions of S 186(3). Therefore , a WOS cannot be brought into existence without complying with the requirements u/s 186(3) 

S165: this section determines an overall  limit  of directorship in 20 companies at the same time– out of which directorship  in only 10 public companies is allowed. The “public company” for this purpose includes private companies which are either holding or subsidiary of a public company. So not only deemed public companies ( private company which is a subsidiary of a public co)  have to be considered for this purpose , but those private companies which are holding company of any public company are  also to be considered as public co , under this section. 

S139 (8) : A vacancy in office of statutory auditor which  is caused by the resignation of an auditor – has to be filled by the Board within 30 days of such resignation subject to the approval of the shareholders ( it is recommendation to the shareholders) and the approval of  the shareholders has to be obtained within 3 months of the Board recommendation, at (an extraordinary) general meeting convened for the purpose . Such appointment can be only for the period till the conclusion of the next annual general meeting ( and not for five year term),


This blog is authored by Company Secretary Ronak Gupta. He is author of many blogs and runs many websites and youtube channels. His work is dedicated to corporate laws, legal, secretarial, professional services and also in strategy formulations for corporates. Mail him at: csronakgupta23@gmail.com or call at :9910226715

Comments

Post a Comment

Popular posts from this blog

Security Clearance from MHA for foreign national of a country sharing land border with India

Overview  Latest regulations mandates security clearance from the Ministry of Home Affairs (MHA) for individuals from land-bordering countries, such as China, seeking directorships in Indian companies. This article unpacks the essential requirements, implications, and step-by-step application process at E-SAHAJ SEWA for this mandatory clearance, empowering businesses and aspiring directors to ensure smooth compliance and national security. Stay ahead of the curve and ensure success in India's dynamic business environment with this comprehensive guide. India’s corporate landscape is evolving, and so are its regulations. In June 2022, a significant amendment to the Companies (Appointment and Qualification of Directors) Rules [Notification] made security clearance from the Ministry of Home Affairs (MHA) mandatory for individuals from countries sharing land borders with India seeking directorships in Indian companies. While aiming to safeguard national security interests, this new req...
Read more

Valuation of Shares and other Securities under Companies Act, 2013

As per Companies Act, valuation may be required to be made in respect of any property, stocks, shares, debentures, securities or goodwill or any other assets (herein referred to as the assets) or net worth of a company or their liabilities.  Under this article, we will consider valuation aspects of shares and other securities under companies act 2013. Who can conduct valuation of shares? after 31st January, 2019 only a person registered as Registered Valuer as per Section 247 are eligible to do valuation of Securities. Except Registered valuer no other persons like (Merchant Banker or Chartered Accountant) can do the valuation of Securities.  What is the validity of a valuation report given under Sec 247 of the Companies Act? It is valid upto 6 months usually. However, it depends upon events for which you are considering the Valuation report. Is valuation report required for rights issue? Not mandatory in case of rights issue. If rights issue is at the premium, then? Still not...
Read more

Process for Redemption of Non-Convertible Debentures (NCDs)

Non-Convertible Debentures (NCDs)  Non-Convertible Debentures (NCDs) are debt instruments issued by a company that cannot be converted into equity shares. These debentures are redeemed at the end of a specified period. An NCD represents an obligation by the company to repay the principal amount along with a specified rate of interest. After the specified period, the said debentures can be redeemed. Redemption of debentures is the process of a company repaying the principal amount of its debentures to the debenture holders. It's a planned financial move to ensure that the company can meet its debt obligations. The Issuer Companies can adhere to the following process for the redemption of Non-Convertible Debentures (NCDs).    1. Verify Terms of Issue ·   Review the Debenture Trust Deed and the Offer Document/Prospectus for redemption terms, including: o     Redemption date. o     Mode of redemption (lump sum or in...
Read more