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Simplifying Rotational Directors

Hi, I know you all are familiar with the word Director, but for sake of reference wrt to the Companies Act 2013, Section 2(34) provides, director means a director appointed to the board of the company. The said definition seems as a reference only so let’s understand the meaning of board. The Companies Act define the board in Section 2(10) which provides that “Board of Directors or Board”, in relation to a company means the collective body of the directors of the company. In a layman language, A board of directors is a group of individuals who are elected by the shareholders to represent them and they jointly supervise the activities of an organization, which can be either a for-profit business, nonprofit organization, or a government agency. Taking an example of a Company, since company being an artificial person ca n’t manage the business and other, day to day operation by its own. Thus Board comes into the picture. Legal Background of Rotational Director- ...

COMPLETE AND CRITICAL ANALYSIS OF PRIVATE PLACEMENT

COMPLETE AND CRITICAL ANALYSIS OF PRIVATE PLACEMENT Private placement is always being one of the hot topic among students and corporate professionals. A Private Placement can be explained as a means of raising capital by the companies without going for public issues. However, The Private placement has defined in explanation II of sub-section (3) of section 42 of companies Act 2013 means any offer or invitation to subscribe or issue of securities to a select group of persons by a company (other than by way of public offer) through private placement offer-cum-application, which satisfies the conditions specified in this section Before analyzing the provisions of private placement in detail, the Securities Exchange Board of India v. Sahara Ind...

Redefining The Beneficial Owner

Every company is required to maintain the Register of Members (ROM) in Form no. MGT-1. Every Company is required to add the name of the legal owner of the share of the company in the ROM. Register of members describes the ownership of the company. Many Promoters were engaged in using illicit fund in Shell Companies by entering Fictitious names in the ROM. These companies were used for tax evasion and money laundering. In order to curb these practices, The Government of India introduced Section 89 and 90 in Companies Act, 2013. Now before starting Section 89 and 90 , let us first understand the meaning of beneficial owners and how it is different from legal owner or nominal owner. According to Black’s Law Dictionary, Beneficial owner is a legal term where specific property rights ("use and title") in equity belong to a person even though legal title of the property belongs to another person. Nominal Owner is the person whose name is entered in the ROM but he is simp...

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