STAKEHOLDERS’ CONSULTATION COMMITTEE IN LIQUIDATION


Stakeholders’ Consultation Committee in liquidation do not have any parliamentary backing but a product of subordinate legislation. This is a committee constituted under Regulation 31A of the Insolvency and Bankruptcy Board of India (Liquidation Process) Regulations, 2016. To understand the scope of stakeholders’ consultation committee we may refer to Section 35(2) and executive overreach in a legislative mandate.

Power to Consult

Section 35(2) empower the liquidator to power to consult any of the stakeholders entitled to a distribution of proceeds under section 53. This is not a duty of the liquidator but power meaning thereby this consultation is completely optional on part of the liquidator. Under law, any such consultation is not be binding on the liquidator.     However, the law mandate record of such consultation, if it takes place. The records of any such consultation shall be made available to all other stakeholders not so consulted, in a manner specified by the Board. [Section 35(2)]

This is the duty of stakeholders consulted to extend all assistance and cooperation to the liquidator to complete the liquidation of the corporate debtor. [Regulation 8(1)]

For the purpose of Second proviso, the liquidator shall maintain the particulars of any consultation with the stakeholders made under this Regulation, as specified in Form A of Schedule II. [Regulation 8(2)]

Consultation Committee

The above law is the major position under the Insolvency and Bankruptcy Code, 2016 and the Liquidation Regulations.

However, the Insolvency and Bankruptcy Board of India (IBBI) to streamline this consultation process, prescribes the Stakeholders’ Consultation. With the recent amendment, the stakeholder’s consultation committee becomes a significant affair. Still, any stakeholder should not consider it as Committee of Creditors which is powerful to decide the faith the resolution process.

The liquidator shall constitute a Stakeholders’ Consultation Committee within sixty days from the liquidation commencement date (the date of liquidation order). The committee shall be constitute based on the List of stakeholders prepared on the basis of claims received and verified. [Regulation 31A(1)]

Duty of Consultation Committee

Regulation 31A cast a duty on the Stakeholders Consultation Committee to advise the liquidator on matters related to –

  • Appointment of Professionals and their remuneration (power given with effect from 30 September 2021);
  • Sale under Regulation 32, including manner of sale, pre-bid qualifications, reserve price, amount of earnest money deposit, and marketing strategy.

The decision(s) taken by the liquidator prior to the constitution of consultation committee shall be placed before the consultation committee for information in its first meeting. [Proviso to Regulation 31A(1)] The Committee has no power to advise on such decision taken place before the constitution of the Stakeholders’ consultation committee.

The Regulations do not limit the power of the liquidator to consult any of the stakeholder under Section 35(2) in any additional matter.

Constitution

The consultation committee shall have following members [Regulation 31A (2)]:

Secured Financial Creditors: 2 – 4 depends upon percentage of claims to the Liquidation Value;

Unsecured Financial Creditors: 1-2 upon percentage of claims to the Liquidation Value;

Workmen and Employees: 1

Government: 1

Operational Creditors: 1-2 upon percentage of claims to the Liquidation Value;

Shareholder or Partners: 1

No Remuneration

This may be noted that these representatives shall not be entitle to any remuneration or allowance under the Code and these regulations. However, the code do not bar creditors representative by the representative to reimburse the cost but in any case, any cost incurred by these representative shall not form part of the liquidation process cost.

The liquidator may facilitate the stakeholders of each class to nominate their representatives for inclusion in the consultation committee. If the stakeholders of any class fail to nominate their representatives, such representatives shall be selected by a majority of voting share of the class, present and voting. [Regulation 31A (3) and (4)].

Record and Information

Representatives in the consultation committee shall have access to all relevant records and information as may be required to provide advice to the liquidator under sub-regulation (1). It means where the liquidator seeks advise on additional matter, the liquidator may at his option provide the information. [Regulation 31A (5)] This record and information may be provided subject to restriction under the Code and Regulations. The Regulations do not provide any restriction; however, the Liquidator may take hint from the CIRP Regulations and should request a non-disclosure undertaking from these Representatives.

Meeting

The liquidator shall convene a meeting of the consultation committee when he considers it necessary and shall convene a meeting of the consultation committee when a request is received from at least fifty-one percent of representatives in the consultation committee. [Regulation 31A(6)] However, it is not clear on what matter the Stakeholders’ consultation Committee shall “forced advise” where the liquidator has not called the meeting.

The liquidator should call meeting at reasonable intervals and keep the committee informed of developments.

The liquidator shall chair the meetings of consultation committee and record deliberations of the meeting. [Regulation 31A(7)]

The consultation committee shall advise the liquidator, by a vote of not less than sixty-six percent of the representatives of the consultation committee, present and voting. The advice of the consultation committee shall not be binding on the liquidator. Where the liquidator takes a decision different from the advice given by the consultation committee, he shall record the reasons for the same in writing and mention it in the next progress report. [Regulation 31A (9) and (10)]

Sale as Going Concern

The liquidator shall place the recommendation of committee of creditors made under sub-regulation (1) of regulation 39C of the Insolvency and Bankruptcy Board of India (Insolvency Resolution Process for Corporate Persons) Regulations, 2016, before the consultation committee for its information. [Regulation 31A(8)]

Under Regulation 39C of those regulations, the committee (of creditors) may recommend that the liquidator (to be appointed) may first explore sale of the corporate debtor as a going concern under clause (e) of regulation 32 of the Insolvency and Bankruptcy Board of India (Liquidation Process) Regulations, 2016 or sale of the business of the corporate debtor as a going concern under clause (f) thereof, if an order for liquidation is passed under section 33.

Where the committee of creditors has not identified the assets and liabilities under sub-regulation (2) of regulation 39C of the Insolvency and Bankruptcy Board of India (Insolvency Resolution Process for Corporate Persons) Regulations, 2016, the liquidator shall identify and group the assets and liabilities to be sold as a going concern, in consultation with the consultation committee. [Regulation 32(3)]

Assignment of not readily realisable assets

A liquidator may assign or transfer a not readily realisable asset through a transparent process, in consultation with the stakeholders’ consultation committee in accordance with regulation 31A, for a consideration to any person, who is eligible to submit a resolution plan for insolvency resolution of the corporate debtor. [Regulation 37A(1)]

AUDIT OF SMALL COMPANIES – MY TAKE


The recent consultation paper issued by the National Financial Reporting Authority (NFRA) generated lot of discussion in media, social media and professional circle. This consultation paper is first serious attempt from regulators to discuss a critical issue of compliance. I have made suggestion to remove requirement of compulsory audit to the Company Law Committee constituted by the Ministry of Corporate Affairs in year 2018, though not considered by the committee. I am sharing my views on this well studied consultation paper in public before submitting it to the NFRA.

Quality Concerns

The quality of statutory audit, cost audit and secretarial audit are not satisfactory because of a valid reason for which blame should be shared by the legislature. Auditors are not investigation agencies but just a watchdog who could not bark just report to Chaukidar aka Regulator. Auditors have to relied on documents, if made available or for rest on management representation letters. He cannot ascertain the truth in the representation so made, even if a suggestive draft is made by him. No such representation is made on an oath under law. The auditor have to assume it as true. Except a few cases of Government audits or regulatory audits, all auditors are appointed and importantly paid by the management of the company – the auditee not by the shareholder or any other stakeholders. None of our paymaster want any thing which may trouble the management, our paymaster.

We have number of tax audits but requirement of assessment, re-assessments and more seriously tax raids, (whatsoever fancy names government call it) are there. Should not the tax computed by the management and confirmed by tax auditor be final. If the government think it is not, these audits are Ponzi scheme of employment generation for benefit of we – the professionals.

Same way we have Satyam, Sahara, Sharada, DHFL, Srei and a long list of corporate fraud. Either auditors were co-accused or helpless. In year 2015, an auditing firm issued a public notice that the client is fraud. That was an interesting case showing helplessness of auditors. All major non-performing assets of Bank are of well audited companies. Almost all cases of non-cooperation under the Insolvency and Bankruptcy Code auditors are one of the helpless respondents. Even Forensic and Transaction Audit do not have satisfactory result. But if audit is there, why should we need so many Forensic and Transaction Audit?

Few years earlier when a reputable law firm was under scanner of law enforcement agency in a scam, private chats were full to claim professionals – Corporate Law firms, Chartered Accountants and Company Secretaries as gurus of fraud not as whistle blower. What MCA data on fraud reporting by these professionals say in relation to corporate fraud in limelight? There is no real power and motivation but pay-cuts, resignations, removal and punishment.

In corporate history the most cited reason of the resignation as position of auditor is personal reason (?), Health (??) old age (?), paucity of time (??) when without any such reason we continue with audit of other companies.

I am happy to note in most reportable frauds we have globally reputable auditing and legal firms to name (and shame?) who have most exhaustive check lists to marks ticks in mechanical manner.

Compliance Concerns

Except a few, promoters have no inbuild intention to comply the law in spirit. Most of the time they do not bother on annual filing of accounts and even taxation considering it as useless cost unless there is a fine, penalty or imprisonment is waiting. Promoters leaves everything to ‘manage’ by the professionals. Only 52.48% companies filed annual account and annual return with MCA for year 2018-19 till the consultation papers while the last date was 30 September 2019. Earlier when the Ministry strike off name of many such companies defaulting in filing of annual accounts and annual returns, the most used ground to seek restoration was lack of professional advice. If you have no idea of the route of business in corporate, why are you on the corporate highway? Promoters need to be responsible from day one. Contrary to the legislative intention, Audit provide them window to shift responsibility and blame.

Compliance Cost

This is interest data shared in the consultation paper: 30.26% companies paid no fees to the auditors, 6.79% companies paid less than Rs. 5,000/-. No professional can devote more than 5 hours on these audit assignments in reality. What assurance these accounts and audit provide to stakeholders? No, I am not raising question on all these companies as professionals give huge discounts to new companies, companies with no turnover or facing troubled time. A good number of these assignment may be attached with a well-paying group company or promoter. In a good number of these companies the auditor himself or their related entity write accounts. However, question remain of the real value of the audit in these companies.

In these cases, the audit is not the actual assignment. The actual assignment is account writing. The audit assignment just ensure that the account writing will not go to a non – professional accounting graduate and may improve the quality of accounts slightly.

Baseline of NFRA Consultation

“A majority of these MSMCs is essentially family-owned enterprises formed as companies for the sake of limited liability, or to get bank loans, bus route permits, mining licences, and the like. They are effectively glorified proprietorships or partnerships. There is no public interest in foisting external audit on them. In any event, it is clear that such audit as is being carried out cannot boast of any quality at all.”

I have no disagreement on this observation except limited liability concept. Limited liabilities of a promoter end in India as soon as a company seek loan. Personal Guarantees of promoters effectively make small companies unlimited liability firm in real sense. (Discussed this aspect earlier here). These promoters do not attract with the limited liability concept. They choose a reputation called director or managing director, which comes with a company. If they have money and big family, they will not choose a private company but public company as in popular terms directorship of limited company bring more reputation than directorship of private limited companies. Same time various rules related loan, license, authorizations, permits and like favor companies than partnerships and proprietor firms. You can choose a good and unique name unlike partnership and proprietor concern which have no mechanism to ensure unique name.

I agree there is no benefit of audit in a family-owned company without any external liabilities. To my understanding all companies with small shareholding should have self-certification from shareholder – directors about the fair and correct accounts. We have such practice in case of limited liabilities firms. They may otherwise made aware not to make such certificate unless they are sure or have counter certificate from a professional.

However, in the audit may be conducted without requirement of filing audit report to the Government, where:

  1.  article require audits;
  2. a shareholding or investment agreement require audit;
  3. there is a contractual requirement of audit;
  4. the board of director opt for audit;
  5. Shareholders with a simple majority opted for audit of one or more year;

In following cases, there audit report should be filed with the Government:

  1. Any enforcement agency requested an audit for ono or more year;
  2. One or more scheduled bank require audit with filing of such requisition to MCA by such bank. In such case, the auditor appointed in first requisition shall conduct audit. In case of any subsequent request, report of auditor appointed in first request be made available to all banks having exposure.
  3. Where there is a repayment default for three continuous months or four months in a financial year, an audit including a forensic and transaction audit be conducted with prior intimation by banks to RBI and MCA.
  4. The company made an erosion of net worth of more than 10% after 3 years from incorporation, on application by shareholders with more than 1% shares, the Registrar of Companies may direct companies to have an audit.
  5. Where company fail to file its self-declaration accounts and annual return for more than two financial years.

Whether or not my suggestion accepted, I will strongly suggest no statutory audit in first five years for a small company.

NFRA requests views/comments

NFRA QuestionMy Draft Reply
Do you think that Micro, Small and Medium Companies (MSMCs) depending upon some criteria and threshold should be exempted from the mandatory statutory audit under Companies Act, 2013?
If not, why not and if yes, what would be the criteria and thresholds for exemption?
Yes. All MSMCs which are private companies with less than 10 members having voting powers should be exempted from mandatory statutory Audit. All MSMCs which are wholly owned subsidiaries may also be exempted. In case of all contractual requirement of audit, filing should not be required. In case of certain well enumerated defaults or requisitions, the Registrar of Companies may order audit for one or more years being year not earlier than 3 years from the date of such order. Such audit report may be required to be filed with the Registrar and be a public document.  
Do you think there is a requirement for a separate set of auditing standards for MSMCs as it exists for accounting standards? If no, why not and if yes, what should be the basis for the same?I do not think so. All companies should have accounting and audit on same pattern, where require to have audit. This will help companies to follow same set of internal and external audit upon growth. This will also help investors, present and future
The cost of conducting an audit as per the prescribed standards is an important input for the responses to Questions 1 and 2. Do you agree with the approach for estimating standard cost of audit computed by NFRA? If not, which areas/ assumptions need changes?The cost of conducting an audit should not be prescribed and should be leaved to the market forces. However, where it is unreasonable low or high, the auditor should explain.  
Do you think the current exemption thresholds for CARO, ICFR and statutory audit applicability need to be standardised and made uniform? If no, why not and if yes, what would be the criteria and thresholds?Other than exemption to MSMCs, no change is required as of now. All companies where CARO, ICFR and Statutory Audit is not applicable, there should be a corresponding self-declaration to file with the Registrar signed on behalf of the Board and be placed in the General Meeting for adoption.  

NATIONAL DISCUSSION ON ‘CHALLENGES IN ONLINE CONTRACTS: AN INTERNATIONAL PERSPECTIVE’ – 17th October, 2021


About the institute:

The concept of ‘Symbiosis’ is nurtured by Dr. S. B. Mujumdar (Chancellor, Symbiosis International (Deemed University)) on the principles of Vedic thought ‘Vasudhaiva Kutumbakam’ which means ‘World as One Family’.

Symbiosis Law School (SLS) Hyderabad was established in 2014 inheriting splendid novelty, dynamism and excellence under the aegis of Symbiosis International (Deemed University), Pune.

About the Centre:

Established in 2018, the Centre for Corporate and Competition Law (CCCL) is a student-run centre aiming to provide a platform for students of the institute to explore and learn more about the nuances of Corporate and Competition Law, and to prepare them for the corporate world. To advance our agenda, CCCL has been successful in conducting multiple landmark events in the history of our institute, which has carved a niche corner for our centre within the legal fraternity. Amongst others, CCCL conducted our flagship event, the first-ever National Corporate Restructuring Competition in India in 2019. We have also spread our roots into banking law by conducting a three-day value-added course on Insolvency and Bankruptcy Code. Over the past two years, we have invited eminent personalities like Mr. Dhanendra Kumar, first Chairperson of the CCI and Dr. K. D. Singh, Joint Secretary for Law at CCI conduct webinars on relevant topics.

About the event:

The centre is conducting a national discussion on ‘challenges in online contracts: an international perspective”, 17th October, 2021.The event aims to provide a platform for the participants to have an intellectual discussion on the given theme amongst themselves. This event will have a total maximum of 20 participants, including students and professionals, who will come together to express their views on the given topic. Selected participants are expected to do thorough research on the subject and associated topics. The panellist will be facilitating the discussion and proving insights wherever requires. She shall also guide the participants and assess their performance. 

To register for the national discussion fill in the google form attached below. 

Theme: “Challenges in Online Contracts: An International Perspective”

Date: 17th October, 2021.

Time: 12:30p.m. to 2:00 p.m. 

Platform: Will be intimated on confirmation of participation. 

Last day to register: 11th October 2021 before 11.59 p.m.

Registration Link: https://forms.gle/G5bCgANKUYaCvfUP6

About the Panelist:

Dr. P. Sree Sudha is the Assistant Professor at Damodaram Sanjevayya National Law University (DSNLU), Visakhapatnam. She has completed her LL.D (2016) from National Law School of Indian University, Bangalore. Her areas of specialization are International Trade Laws, E-commerce Law, Intellectual Property Law and Tax Law. She has been the recipient of Four gold medals from Andhra Pradesh University for scoring the highest marks in B.L. Addition to this she has also been a visiting faculty to GITAM School of International Business, GITAM University and has been the Assistant-editor for Journal Academy of Jursitical Studies. 

You can check her profile at: https://dsnlu.ac.in/faculty/dr-p-sree-sudha-associate-professor-of-law-ll-m/

Who can Attend?

Professionals and students from the Legal fraternity. E-certificates will be provided to all the participants.

Email us at cccl@slsh.edu.in to clear your queries.

For more details on our activities, you may follow our LinkedIn and Instagram (@cccl_slsh) Pages.  

CCCL Brochure: https://drive.google.com/file/d/14NyJG3C98YPOEkPcxv8fD2Hu_Q2Bd5nv/view?usp=sharing

Filing of Claims during Liquidation


In an earlier post here, we have discussed filing of claims during corporate insolvency resolution process. In this post, we will discuss filing of claims during liquidation process of corporate persons. During liquidation process for a corporate debtor following forms of the IBBI (Liquidation Process) Regulations 2016 are prescribed to file claims by creditors:

  • Operational Creditors –Form C
  • Financial Creditors – Form D
  • Workmen and Employees (individually) – Form E
  • Workmen and Employees (for All) – Form F
  • Claims by other stakeholders – Form G

Most fields of these forms are identical. In case your claim is complicated or have a good amount of money involved, it is advisable to seek help of a good professional. 

The liquidation process starts after failure of the resolution process of corporate person. In the liquidation process, a creditor is required to file claims within 30 days from the date of the liquidation order. Practically, a creditor may have not more than 14-21 days from the receipt of information of the initiation of liquidation process.

Liquidation Order: Day 0

Receipt of the copy of order by Liquidator – Day 3-5

Public Announcement of Liquidation and Invitation of Claims – Day 5-10

Last Day of filing Claims – Day 30

The liquidator has no power to accept claims after 30 days. All creditors failed to file claims within these 30 days must apply the Adjudicating Authority (National Company Law Tribunal) to condone delay.

All these claim amount shall be calculated as on Liquidation Commencement Date.

The affidavit with the claim form shall be attested by Notary Public.

Common points in these Forms

Common FieldsSource of Information
Name and address of LiquidatorForm Public Announcement
Name and Address of ClaimantYour identity proofs/ loan agreements/Invoices

Certificate of Incorporation/GST details
Identification Number of ClaimantPAN/ GSTN / CoI / UID (Aadhar)
Address of ClaimantLatest Bank Statement/ Telephone or Mobile Bill/ UID (Aadhar)
Email of ClaimantIf you are not a frequent user of email, please provide your most used email address as you need to check this email address almost daily to stay updated.
  
Details of documentsList of all relevant documents
Details of any dispute as well as the record of pendency or order of suit or arbitration proceedings
Details of how and when debt incurredPlease write one paragraph summery of the default
FC – why loan taken, securities, loan disbursal,  loan period interest and due dates OC – what goods or services provided and for which period, details of period of default with first and last invoice
real estate buyers – Allotment letter, agreement to sale, details of payment made
Details of any mutual credit, mutual debts, or other mutual dealings between the corporate debtor and the creditor which may be set-off against the claimDetails if any
Details of the bank account to which the amount of the claim or any part thereof can be transferred pursuant to a resolution planPlease check your cheque book: account number, type of account, Bank name and branch address, IFSC Code, Swift Code etc
List of documents attached to this proof of claim in order to prove the existence and non-payment of claim due to the operational creditorThis will be good if proper file is prepared with proper index and page numbering.
Signature of creditor or person authorised to act on his behalfPlease attach proper authorisation.
Address of person signingAddress Proof – UID/Bank statement/ mobile or telephone bill/ Electricity bill
Liquidation commence datePublic Announcement

In the case of company or limited liability partnership, the declaration and verification shall be made by the director/manager/secretary and in the case of other entities, an officer authorised for the purpose by the entity].

Amount of Claim

In case of operational Creditor: please check and attach invoices, ledger, commercial agreement, Memorandum of understanding, contracts etc. Copy of proper ledger is strongly advisable. Where any interest is claim document like MSME registration or agreement should be attached. Interest for MSME operational Creditors 18% after first 45 days.

In case of a claim by financial creditors: Please check and attach sanction letters, loan agreement, inter-corporate loan agreement, RBI – FEMA Documentation in case of loan from foreign country, mortgage agreement, hypothecation agreement, guarantee agreements, property papers, vehicle registration details, information utility documents, ledger or bank statement or loan statement, securitization documents, DRT orders etc, name of guarantors or principal borrowers;

In case of real estate buyers: application, allotment letter, agreement to sale, sale deed, loan documentation, payment details, ledger copy or bank statement or loan agreement, RERA order, calculation sheet for interest calculation. Interest for class of creditors shall be 8% per year.

In case of Employee and workmen: appointment letter/ promotion letters/ increment letter/ latest salary slips/ TDS statement

Action Post filing claims

After filing claims, claimants should wait response from the Liquidator. The Liquidator shall respond upon your claims on or before 67th day of the Liquidation Commencement Date. In case the claimant find a requirement to modify or amend the claim, the claimant can do it within 14 days of filing of the claim.

Please follow instructions of the liquidator seeking additional information or document unless you are going to appeal against instruction. Please submit all information required. The liquidator may reject your claim if he is not satisfied with your claim. In case of rejection of claim you are required to file an appeal within 14 days of receipt of such decision. You cannot file an amendment of claim in such appeal.

Submission of false or misleading proof of claims shall attract penalties.

Filing of Claims during Insolvency Resolution


In an earlier post here, I have discussed the mode for submission of claims by various classes of creditors. During insolvency resolution process for a corporate debtor following forms are prescribed to file claims by creditors:

  • Operational Creditors –Form B
  • Financial Creditors – Form C
  • Class of Creditors (at least 10 FC in the class) – Form CA
  • Workmen and Employees (individually) – Form D
  • Workmen and Employees (for All) – Form E
  • Creditors other than those covered – Form F

Most fields of these forms are identical. In case your claim is complicated or have a good amount of money involved, it is advisable to seek help of a good professional. 

Look after your money

When you have to recover any money, we should follow up and send frequent reminders. If our amount involve is less than threshold limit to file a case of insolvency against the company or to bear the cost of recovery in normal legal process, we should wait but be vigilant. If we think company is unable to pay and not solvent, we should be careful enough to check if there is a case of insolvency against the company. These insolvency matters may be searched from website of National Company Law Tribunal. I frequently check for insolvency status of my client companies and for companies where we have invested any money.

Always look for public announcement section in the IBBI website. This is important as it is prudent to file our claim in case of insolvency within 90 days (actual time permitted is 14 days). If a creditor could not file a case within 90 days, he has to seek condonation of delay form relevant bench of the adjudicating authority.

Common points in these Forms

Common FieldsSource of Information
Name and address of Resolution ProfessionalForm Public Announcement
Name and Address of ClaimantYour identity proofs/ loan agreements/Invoices

Certificate of Incorporation/GST details
Identification Number of ClaimantPAN/ GSTN / CoI / UID (Aadhar)
Address of ClaimantLatest Bank Statement/ Telephone or Mobile Bill/ UID (Aadhar)
Email of ClaimantIf you are not a frequent user of email, please provide your most used email address as you need to check this email address almost daily to stay updated.
  
Details of documentsList of all relevant documents
Details of any dispute as well as the record of pendency or order of suit or arbitration proceedings
Details of how and when debt incurredPlease write one paragraph summery of the default
FC – why loan taken, securities, loan disbursal,  loan period interest and due dates OC – what goods or services provided and for which period, details of period of default with first and last invoice
real estate buyers – Allotment letter, agreement to sale, details of payment made
Details of any mutual credit, mutual debts, or other mutual dealings between the corporate debtor and the creditor which may be set-off against the claimDetails if any
Details of the bank account to which the amount of the claim or any part thereof can be transferred pursuant to a resolution planPlease check your cheque book: account number, type of account, Bank name and branch address, IFSC Code, Swift Code etc
List of documents attached to this proof of claim in order to prove the existence and non-payment of claim due to the operational creditorThis will be good if proper file is prepared with proper index and page numbering.
Signature of creditor or person authorised to act on his behalfPlease attach proper authorisation.
Address of person signingAddress Proof – UID/Bank statement/ mobile or telephone bill/ Electricity bill
Insolvency commence datePublic Announcement

This is advisable to send declaration as proper notary affidavit though term used is declaration not affidavit.

In the case of company or limited liability partnership, the declaration and verification shall be made by the director/manager/secretary and in the case of other entities, an officer authorised for the purpose by the entity].

Amount of Claim

In case of operational Creditor: please check and attach invoices, ledger, commercial agreement, Memorandum of understanding, contracts etc. Copy of proper ledger is strongly advisable. Where any interest is claim document like MSME registration or agreement should be attached. Interest for MSME operational Creditors 18% after first 45 days.

In case of a claim by financial creditors: Please check and attach sanction letters, loan agreement, inter-corporate loan agreement, RBI – FEMA Documentation in case of loan from foreign country, mortgage agreement, hypothecation agreement, guarantee agreements, property papers, vehicle registration details, information utility documents, ledger or bank statement or loan statement, securitization documents, DRT orders etc, name of guarantors or principal borrowers;

In case of real estate buyers: application, allotment letter, agreement to sale, sale deed, loan documentation, payment details, ledger copy or bank statement or loan agreement, RERA order, calculation sheet for interest calculation. Interest for class of creditors shall be 8% per year.

In case of Employee and workmen: appointment letter/ promotion letters/ increment letter/ latest salary slips/ TDS statement

Action Post filing claims

After filing claims, claimants should wait response from the Resolution Professional. Please follow instructions of the resolution professional unless you are going to appeal against instruction. Please submit all information required. The resolution professional may hold your claim till all required documents or information is received.

Please note, all resolution professional collect and collate claims on provisional basis only.  The resolution professional may revise accepted claim amount any time if there is any additional information is made available either by claimant or corporate debtor.

 It is advisable to sent reminder if there is no response in seven to ten days of filing claims. Sometime, the resolution professional may advise you to file an application against him for admission of your claim. This may be for various reason.

CLASS OF CREDITORS – AUTHORISED REPRESENTATIVE


The concept of the class of creditors took shape when thousands of home – buyers fought together up to the highest available courts (judicial and political) in India. 

The class of creditors does not means but includes home-buyers or real estate buyers. Class of creditors is a group of 10 or more financial creditors other than banks and financial institutions or trustees in financial securities or deposits. In practice, we often meet home-buyers or real-estate-buyers as the class of creditors. 

In case of CIRP – corporate insolvency resolution process, appointed interim resolution professional immediately after appointment by the Adjudicating Authority (National Company Law Tribunal), ascertain the existence of a class of creditors if any. If it seems that there is a class of creditors, the interim resolution professional identifies three insolvency professionals willing to act as an authorised representative of creditors in the class. 

Under the law, the authorised representative can receive up to Rs 25,000/- per meeting of the committee of creditors. Representing a class in a daylong meeting at such remuneration may seem a lucrative job, but a good authorised representative do much work for the class of creditors without remuneration – like queries received from any member of the class he is representing. These queries generate from a lack of financial knowledge, lack of understanding of the insolvency resolution process, market rumours on social media and speculative news published in responsible media. 

Once the interim resolution professional identifies three insolvency professionals as a candidate for the job of an authorised representative, he publishes by way of advertisement a public announcement inviting claims from creditors.

When the interims resolution professional received sufficient claims from creditors in the class, he will file an application for the appointment of the authorised representative. This application shall be filed within two days of verification of claim received within 14 days from the CIRP commencement date.

Please note, there is another provision that allows creditors to file claims till 90 days from the insolvency resolution commencement date, but claims filed after 14 days shall not be considered for the purpose of appointment of the authorised representative. 

Practically, it may not be possible to have an appointed authorised representative in the first meeting of the committee of creditors. Any delay in the appointment of the authorised representative for any class of creditors shall not affect the validity of any decision taken by the committee.

Once the authorised representative is appointed, the resolution professional shall provide a list of creditors in the class to the respective authorised representative appointed by the Adjudicating Authority.

The authorised representative shall use an electronic means of communication between the authorised representatives and the creditors in the class. In practice, the email address of the authorised representative may serve the purpose.

The authorised representative under law shall attend the meetings of the committee of creditors and vote on behalf of each financial creditor to the extent of his voting share. For the purpose of voting, the authorised representative shall rely on pre-instruction voting.

When the authorised representative receives a notice and agenda for the meeting from the resolution professional, he shall circulate the agenda to creditors in a class. He may seek their preliminary views on any item in the agenda to enable him to participate in the committee meeting effectively. Any creditor in the class may submit his preliminary views to the authorised representative within twenty-four hours. These preliminary views are not their voting instructions.

The authorised representative for a class of creditors shall cast his vote on behalf of all the financial creditors he represents in accordance with the decision taken by a vote of more than fifty per cent of the voting share of the financial creditors he represents, who have cast their vote. In a simple language, each class of creditors shall vote as its majority. This is a general majority rule for voting on behalf of a class of creditors. There is an exception to his majority rule.

For a vote to be cast in respect of an application under section 12A, the authorised representative shall cast his vote individually as per each instruction.

The Timelines:

Receipt of appointment order by interim resolution professional – Day zero;

Identifying three potential candidates for the job of an authorised representative – Day 1;

Draft public announcement and got it translated in other languages – Day 2;

Publication of the public announcement – Day 3;

First cut-off day to receive claims – Day 14;

Verification of claims received before first cut-off date – Day 21;

 Application for appointment of an authorised representative – Day 22

MODE FOR SUBMISSION OF CLAIMS


Insolvency and Bankruptcy law is affecting ordinary people outside business houses, including real estate buyers. Mode for submission of claims before the Resolution Professional or liquidators has one of the technical questions.

Under the insolvency and bankruptcy law, claimants before Resolution Professional or liquidator may either be of the following categories:

– Financial Creditors;

– Class of (financial) Creditors (There must be at least 10 Financial Creditors to form a class of creditors);

– Operational Creditors;

– Workmen and Employees (individually);

– Workmen and Employees (for All); or

– other than those covered.

All these categories for creditors should file their claims before the resolution professional or liquidators.

Under the Insolvency and Bankruptcy Board of India (Insolvency Resolution Process for Corporate Persons) Regulations, 2016 prescribed mode to submit a claim is hereunder:

• In Electronic Form

– Financial Creditors – Form C

– Class of Creditors (at least 10 FC) – Form CA 

• By post or by electronic means 

– Operational Creditors –Form B

– Workmen and Employees (individually) – Form D

– Workmen and Employees (for All) – Form E

• In person, by post or by electronic means

– other than those covered – Form F

Please note, this is my presumption that common claims for numerous workers or employees be filed either through post or electronic mode. Unfortunately, the relevant sub-regulation is silent on this aspect.

There are a similar provision under the Insolvency and Bankruptcy Board of India (Liquidation Process) Regulations, 2016.

What will happen if a person does not file a claim in the legally mandated mode to submit their claim. Will the resolution professional or liquidator deny accepting these claims? Will it be proper compliance of law on the part of the insolvency professional to accept all claims in person? 

I have no answer. 

To avoid, I prefer submission of claim in electronic mode with a copy of these claims in physical format. Physical format, particularly in case of big bank loan, become bulky, but it helps cross-reference while verifying these claims. Further, it is not easy to notice alterations in soft copies.

I also advise claimants should not send original documents except claim forms and verification undertaking or affidavit.

ORDERED NAME OF A COMPANY


Would you like if the name of your company is not of your choice? Would you like if the name of your company is alphanumeric beyond your control?

New Rule 33A of the Companies (Incorporation) Rules, 2014 may create such a possibility.  The root of the new rule is under Section 16 of the Companies Act, 2013.

Section 16, till this notification, was one of the marginalized provisions of the Companies Act, 2013 ignored by consultants and companies alike.

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Welcome Multidisciplinary Firms


Co-existence is the key to survival. The legal ecosystem for corporate India is no exception. For better survival, we need the help of numerous professionals who, in turn, have multiple qualifications. Chartered Advocates, Accountants, Company Secretaries, Cost Accountants, Insolvency professionals and Registered Valuers and other professionals work together. However, their contractual relationship had no formal legal structure.

8 July 2021 shall be a memorable day for professionals when multidisciplinary firms become legally possible.

There was a beginning when the Institute of Company Secretaries of India (ICSI), on 3 February 2020, amended its regulations (The Company Secretaries Regulations, 1982).

Regulations 165A of CS Regulations permits company secretaries to form multidisciplinary firms:
A member in practice may form a multidisciplinary firm with the member of other professional bodies as prescribed under regulations 168A and 168B in accordance with the regulating guidelines of the Council for functioning and regulation of such multidisciplinary firm.

Regulations of professionals like the Institute of Chartered Accountants of India have similar provisions.

A Company Secretary may share or accept fee, commission, a brokerage in the fee or profit or enter into partnership, or accept work only from members of particular professional bodies or person having specific qualifications. [Clause (2)-(5) of Part I of the First Schedule to Act – ICSI Act and ICAI Act] According to Regulation168B of CS Regulations, A company secretary, other than any other Company Secretary, may enter into a partnership with a member of any of the following professional bodies, namely:

(a)   The Institute of Chartered Accountants of India;

(b)   The Institute of Cost Accountants of India;

(c)   Bar Council of India;

(d)   The Institute of Engineers or Engineering from a University established by law;

(e)   The Indian Institute of Architects;

(f)    The Institute of Actuaries of India; and (g)   Professional bodies or institutions outside India whose qualifications relating to Company Secretary recognized by the Council under Sub-section (2) of Section 38 of the (ICSI) Act.

There is a similar provision in Regulation 53B of CA Regulations. A Chartered Accountants, other than any other Chartered Accountants, may enter into a partnership with a member of any of the following professional bodies, namely:

(a)   The Institute of Company Secretaries of India;

(b)   The Institute of Cost Accountants of India;

(c)   Bar Council of India;

(d)   The Institute of Engineers or Engineering from a University established by law;

(e)   The Indian Institute of Architects;

(f)    The Institute of Actuaries of India; and

(g)   Professional bodies or institutions outside India whose qualifications relating to Company Secretary recognized by the Council under Sub-section (2) of Section 29 of the (ICAI) Act.

The Institute of Chartered Accountants of India has on 8 July 2021, notified a form to establish multidisciplinary firms by substituting its existing Form 18 in Schedule A of its Regulations. This form comes into force from 8 July 2021.

The Institute of Company Secretaries is in the process to finalize relevant forms and guidelines. Present Form1 does not support multidisciplinary firms.

S.No. 3 of Form 18 have two tables: the first for members having qualifications like Chartered Accountants, Company Secretaries and Cost Accountants and the second table for partners holding other qualifications.

Such multidisciplinary firms shall have a name with prior approval of the councils of all institutes or regulatory bodies. This requirement may be a real challenge if all governing bodies require approval of trade name or firm name from these bodies.

Small and Medium Sized Company


My law teacher told me in law class, human is a social animal. Yesterday I found, modern human is social media animal. Last two days, we received a flood of social media messages claiming change in definition of small and medium enterprises. Only a fine reader can point out misunderstanding caused by this statement.

We need to understand interplay of the Companies Act, 2013, Micro, Small and Medium Enterprises Development Act, 2006 and newly notified the Companies (Accounting Standards) Rules, 2021.

No Government can change even a single alphabet in an Act of Parliament by way of notification of a Rule unless power is given specifically. Definition of the small companies is given in the definition clause Section 2(85) of the Companies Act, 2013:

 “Small company” means a company, other than a public company, —

(i) paid-up share capital of which does not exceed fifty lakh rupees or such higher amount as may be prescribed which shall not be more than ten crore rupees; and

(ii) turnover of which as per profit and loss account for the immediately preceding financial year does not exceed two crore rupees or such higher amount as may be prescribed which shall not be more than one hundred crore rupees:

Provided that nothing in this clause shall apply to—

(A) a holding company or a subsidiary company;

(B) a company registered under Section 8; or

(C) a company or body corporate governed by any special Act.

The definition under this definition clause is applicable wherever word “small company” in the Companies Act, 2013. This definition may be amended by the Companies (Specification of definitions Details) Rules, 2014 or any amendment therein. No amendment in this general definition may be made by the Companies (Accounting Standards) Rules, 2021 or its earlier version.

Rule 2(1)(t) of the Companies (Specification of definitions Details) Rules, 2014 with effect from 1 April 2021 amends the definition of Small Company saying that For the purposes of sub-clause (i) and sub-clause (ii) of clause (85) of section 2 of the Act, paid up capital and turnover of the small company shall not exceed rupees two crores and rupees twenty crores respectively.

The final definition of small company under Section 2(85) read with Rule 2(1)(t) of the Companies (Specification of definitions Details) Rules, 2014 with effect from 1 April 2021 is hereunder:

 “Small company” means a company, other than a public company, —
(i) paid-up share capital of which does not exceed two crores rupees or such higher amount as may be prescribed which shall not be more than ten crore rupees; and
(ii) turnover of which as per profit and loss account for the immediately preceding financial year does not exceed twenty crore rupees or such higher amount as may be prescribed which shall not be more than one hundred crore rupees:
Provided that nothing in this clause shall apply to—
(A) a holding company or a subsidiary company;
(B) a company registered under Section 8; or
(C) a company or body corporate governed by any special Act.

Any change in the definition of small company, more than ten crore and one hundred crore respectively for paid up capital and turnover shall require an amendment to the Companies Act, 2013.

This definition in the Companies Act, 2013 is applicable for all purposes of the Companies except (a) the accounting practices therein and (b) benefits provided by the Government to MSMEs.

The Companies (Accounting Standards) 2021 deals with the presentation of company accounts.

The term enterprises mentioned in Accounting Standards and the Companies (Accounting Standards) Rules is specific and restricted only to companies not any other form of enterprises. It is not applicable to all industrial undertaking, business concerns or other establishments except companies.

The Companies (Accounting Standards) 2021 defines Enterprises in Rule 2(d):

“Enterprise” means a ‘company’ as defined in clause (20) of section 2 of the Act.

Thereafter the Companies (Accounting Standards) Rules 2021 defines “Small and Medium Sized Company (SMC)” not small and medium enterprises (SME). Definition of small enterprises and medium enterprises is given in the Micro, small and Medium Enterprises Development Act, 2006 as amended time to time. We have already discussed this definition in details here earlier.

The definition of “Small and Medium Sized Company (SMC)” in Rule 2(e) of the Companies (Accounting Standards) Rules 2021 is hereunder:

“Small and Medium Sized Company” (SMC) means, a company-

  • whose equity or debt securities are not listed or are not in the process of listing on any stock exchange, whether in India or outside India;
  • which is not a bank, financial institution or an insurance company;
  • whose turnover (excluding other income) does not exceed two hundred and fifty crore rupees in the immediately preceding accounting year;
  • which does not have borrowings (including public deposits) in excess of fifty crore rupees at any time during the immediately preceding accounting year; and
  • which is not a holding or subsidiary company of a company which is not a small and medium-sized company.

Explanation. – For the purposes of this clause, a company shall qualify as a Small and Medium Sized Company, if the conditions mentioned therein are satisfied as at the end of the relevant accounting period.

For different purposes a company may either be:

  • Small Company or not;
  • Small and medium sized company or not;
  • Micro enterprises or small enterprises or medium Enterprises or none of these three.

It all depends upon relevant definition for the time being in force. One company may fall in one or more or none of these categories. Simple check points are:

Small CompanySmall and Medium Sized CompanyMicro Small and Medium Enterprise
Paid up CapitalTurnoverInvestment in Plant and Machinery
TurnoverBorrowing —

The companies (Accounting Standards) Rules 2021 has limited applicability with respect to applicability of accounting standards in relation to books of account of companies. These rules come into effect from the date of publication which is 25 June 2021 not on its issue date which is 23 June 2021. Further Rule 3(2) made it clear that accounting standards notified under these rules comes into effect retrospectively from 1 April 2021.

FULL DIGITAL BOARD


This was a long-awaited (maybe hated) one-liner:

“In the Companies (Meetings of Board and its Powers) Rules, 2014, rule 4 shall be omitted.”

In much-hyped digital India and the digital economy, this was a bureaucratic legacy. In the early days of digitalization, neither top government officers nor senior directors were comfortable with the digital display of papers. Even when Indian companies and directors start showing comfort with online meetings, some matters were reserved for physical board meetings. We love a gathering and get-together too.

Rule 4 lists particular items which should be discussed in a physical board meeting only.

Original as on 1 April 2014As on 14 August 2014
(i) the approval of the annual financial statements;
(ii) the approval of the Board’s report;
(iii) the approval of the prospectus;
(iv) the Audit Committee Meetings for consideration of accounts; and
(v) the approval of the matter relating to amalgamation, merger, demerger, acquisition and takeover.
(i) the approval of the annual financial statements;
(ii) the approval of the Board’s report;
(iii) the approval of the prospectus;
(iv) the Audit Committee Meetings for consideration of financial statement including consolidated financial statement, if any, to be approved by the Board under sub-section (1) of section 134 of the Act; and
(v) the approval of the matter relating to amalgamation, merger, demerger, acquisition and takeover.

One significant change came into force on 7 May 2018 when relief was granted to attend a board meeting by directors not physically present at the venue, where the quorum is present at the venue of the physical meeting. The provision read:

“Where there is quorum presence in a meeting through the physical presence of directors, any other director may participate conferencing through video or other audiovisual means.”

This relief was drafting or interpretation hardship. What was the position of directors present through video or other audiovisual means? Where they actually or legally present? If yes, will they be counted for quorum? If not counted for the quorum, will they be able to express their opinion? Will they vote?

Rule 4 of the Companies (Meetings of Board and its Powers) Rules, 2014 was paused on 19 March 2020. Finally, it could not survive from COVID – 19.

Before that, it hoped for a life revival on 30 September 2020, 31 December 2020 and finally on coming 30 June 2020. A stroke of mighty killed it on 15 June 2021.

What now?

Now, the deletion of Rule 4 paved the way for a full digital Board for companies. There is no legal restriction to have a digital meeting.

Soon, board rooms may not be in our corporate houses. Not only that, the hospitality industry may miss some of its frequent visitors. Their meeting rooms may be reshaped as shared offices.

One corporate feature we will not miss surely – a destination board meeting. I hope some of our clients will invite us for a destination board meeting in the year 2022.

FULL DIGITAL BOARD

ANNUAL GENERAL MEETING(S) 2021


At the hight of the cold wave at New Delhi, Ministry of Corporate Affairs suddenly awakens to issue two circulars within hours. We have an interesting observation: the first one published a regular font Arial/Times New Roman (who cares the font) but second used a font called – Comic Sans MS. Use of the font in a law communication communicates. We will read this circular in this post.

http://mca.gov.in/Ministry/pdf/GeneralCircularNo.02_14012021.pdf

The circular may use simpler language. Without a straightforward acknowledgement of the fact, many companies could not convene their Annual General Meeting due to be held in calendar 2020 it provide a bit of relief. 

The circular applies to companies whose Annual General Meetings:

  1. Were due to be held in the year 2020 (but could not be conducted due to whatsoever reason); or
  2. Become due in the year 2021.

The Government decided to allow these companies to conduct their meetings on or before 31 December 2021.

The circular clarifies that such Annual General Meetings may be conducted in accordance with Circular 20/2020. The Circular 20/2020 allows companies to conduct Annual General Meetings through Video Conferencing or any other audiovisual mode.

The first paragraph of the circular may create two confusions:

a. Due date for the Annual General Meeting for Annual General Meeting legally due to be held any time during the year 2020 is extended till 31 December 2021.

b. Due date for the Annual General Meeting for Annual General Meeting legally due to be held any time during the year 2021 is extended till 31 December 2021.

This possible misinterpretation immediately clarified in the second paragraph.

The second paragraph clarifies that no extension is allowed. All these companies should follow legal time-limits or face legal actions.

We consider the circular as an indication of the government understanding of difficulties faced by companies. Same time it clarifies that no extension is coming for AGM missed 31 December 2020 deadline. 

Secondly, the Government is planning a few announcements in the Budget speech. 

The most important take away from the circular is hidden advice: Companies should not take the risk for the year 2021. 

According to the law, any company which missed legal timeline in the year 2020 may opt for compounding but repeated miss in the year 2021. 

I hope the Government will compound the offence of not holding Annual General Meeting timely during the year 2020 with ease.

Government bless us.

[P.S.: I have no interpretation of the font used.]

Aishwarya Mohan Gahrana

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Call for Entries: 8th RMLNLU- Regstreet Law Advisors Conference on International Legal Essay Writing Competition & Conference on Financial Regulatory Laws [March14, 2021]


The Journal Committee (“Committee”) at Dr. Ram Manohar Lohiya National Law University, Lucknow, in collaboration with Regstreet Law Advisors, is organising 8th edition of the RMLNLU International Legal Essay Writing Competition (“RILEC”) along with RMLNLU-Regstreet Law Advisors Conference on Financial Regulatory law on 14 March, 2021.

SUB-THEMES:

  • Regulatory hurdles to the growth of a successful IFSC in india
  • Financial regulations and the innovation in fintech
  • Direct overseas listing
  • Resolution of financial firms
  • Analysis of the stock exchange responses to curb the pandemic caused volatility
  • Social stock exchange
  • Trading member default

ELIGIBILITY:

Authors must be pursuing their 5-year integrated LL.B. (Hons.) course / 3 year LL.B. course / LL.M. from any recognised university in India and equivalent law degree, abroad for the academic year of 2020-2021, to be eligible to participate in the Competition.

STRUCTURE:

All entries will be judged and ranked by the Regstreet Law Advisors and Journal Committee. The last date for submission is 17 January 2021. A maximum of top five entries will be selected for the virtual conference to be organised on 14 March 2021. The participants may adopt any suitable means for presenting the papers including audio-visual aids, such as PowerPoint presentation.

The selected entries will be considered for publication in the next issue of RMLNLU Law Review Journal & the RMLNLU Law Review Blog. The top three essays will be conferred with rewards.

PARTICIPATION GUIDELINES:

  1. Co-authorship of entries (maximum two) among individuals from the same or different institutions is allowed.
  2. Multiple entries for same authors are not allowed.
  3. A participant may submit an entry related to ONE sub-theme ONLY. One may not juxtapose sub-themes in an entry
  4. Entries should be original, unpublished and non-plagiarised.

SUBMISSION GUIDELINES:

  1. Word Limit: 4000-5000 words (excluding footnotes).
  2. Individual Attachments: Name; contact details; current academic status (Year, University etc.); undertaking as to guarantee of originality
  3. Formatting specifications:
  4. Font and size for the essay: Times New Roman | 12
  5. Font and size for footnotes: Times New Roman | 10
  6. Line spacing: 1.5
  7. Citation Style: Uniform style of citation should be followed throughout the essay.
  8. The file name must consist only of the author’s name.
  9. Entries should be emailed to rilec.rmlnlu@gmail.com under the subject title “Entry for 8th RILEC – [Name(s) of Author(s)]” in Microsoft Word (.doc or .docx) format.
  10. The last date for the submission of soft copies is 17th January, 2021.

MISCELLANEOUS RULES:

  1. The copyright for all entries shall vest with the organisers who herewith reserve the right to modify, postpone or defer the competition and its adjudication indefinitely as and when exigencies of an unforeseen nature may arise.
  2. Any attempt, direct or indirect, to contact the panel of judges will be met with the immediate disqualification of the relevant entry.
  3. Any indication of author’s name or university in the entry shall lead to immediate disqualification from the competition.

PRIZES:

  1. Winner – INR 15,000
  2. First Runner Up – INR 10,000
  3. Second Runner Up – INR 5,000

Top three entries will be receiving a ‘certificate of achievement’ and an opportunity to intern at Regstreet Law Advisors.

A ‘certificate of merit’ shall be provided to the selected entries.

Selected entries will be published on ‘The RMLNLU Law Review Blog’.

All participants shall be receiving a ‘certificate of participation’.

CONTACT:

  1. Write us at rmlnlu@gmail.com in case of queries.
  2. You may also reach us through the phone.
  • Agrima Gupta: +91 9810373335
  • Harshit Agrawal: +91 9425429954
  • Anmol Adhrit: +91 8825314318

Click here to know more about the competition.

Click here to read the brochure of the competition.

You can follow us on our Facebook page here.

NEW NORMAL AT NCLT– ONLINE HEARING


The year 2020 is an unprecedented year of unusual era. Technology is helping us to survive. In an earlier post Virtual Reception, Lobby and Meeting Rooms, we discussed the process of online hearing in NCLT and NCLAT. Both Tribunals were till recently hearing urgent matters only. Now, Tribunals are switching to regular cause lists. With new normal, tribunals will hear matters in video conferencing mode.

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Virtual Reception, Lobby and Meeting Rooms


Video conferencing apps are the talk of the earth since COVID-19 lockdown and slowdown. Now Webex, Zoom, Google meet and other such apps are a household name. We all are using these apps for our Board Meetings, General Meetings and court hearings. However, none yet officially recognised WhatsApp as a tool assisting us in the court hearing, but it is doing its role without a celebrity public appearance. 

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Company Website


A company website is not a simple affair of contents, design, SEO and brand building. It is more about compliance. A company may choose not to have a website. Once, a company decide to have a website; it should comply essential requirement of laws.

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Multiple Business Establishments of a Proprietor


Can a proprietor have more than one business establishment? Which law governs sole proprietor business?

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CHANGE OF NAME OF A DIRECTOR


Change of name of a director may happen due to several reasons. A director must register the change in his name under the Companies Act. In this brief post, we will discuss the same.

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EASE AND CHAOS


Ministry of Corporate Affairs has issued many amendment rules and circulars during the month of September 2020 for the ease of doing business. Though one thing always remains – chaos. In this brief post, we will discuss these ease and remaining chaos briefly.  

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FINALLY GENERAL EXTENSION FOR ANNUAL GENERAL MEETING


Just a few days earlier, we made a case here for a general extension for holding Annual General Meeting. The way Government responded through General Circular 28/2020, (presently not accessible) dated 17th August 2020, was not appreciated by Industry and Professional. Now, the Ministry of Corporate Affairs allowed all Registrar of Companies to pass general orders for a general extension for holding Annual General Meeting. Why am I not truly satisfied with these orders?

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