International Law Office - Legal Newsletters, Law Firm Directory and Legal News

The Department of Industrial Policy and Promotion of the Ministry of Commerce and Industry recently issued Press Note 6/2009, which removed the ceiling for equity participation by both domestic and foreign enterprises in micro and small enterprises.

According to recent reports in the Economic Times, pursuant to the registration of more than 100 entities under the Limited Liability Partnership (LLP) Act 2008, the Ministry of Corporate Affairs wants LLPs to be recognized by other ministries, state governments and sectoral regulators.

The Companies Act provides some flexibility to private companies with regard to compliance with its provisions concerning general meeting regulations. For example, it provides that the general meeting regulations contained in Sections 171 to 186 will apply to private companies that are not subsidiaries of a public company, unless the act or the company's articles of association provide otherwise.

The long awaited re-codification of Indian company law has begun to take shape through the government's recent introduction to Parliament of the Companies Bill 2008 and the referral of the same to the Select Committee. The bill seeks to establish a new benchmark for corporate governance in comparison to the existing framework under the Companies Act 1956.

A company cannot be formed with only preference capital, as preference shares do not carry voting rights except in certain circumstances. Voting rights form the basis for corporate actions, particularly in respect of matters placed before general meetings. As the name suggests, preference shares carry preferential rights in relation to other classes of share.

Independent directors are appointed to a board of directors in order to provide objectivity for board decisions. The new Companies Bill 2008 reproduces and reaffirms the concept of independent directors, with certain modifications - for example, it seeks to harmonize governance norms and bring listed companies under the jurisdiction of the act.

More updates >