The Companies (Amendment) Act 2020 and the Foreign Contribution (Regulation) Amendment Act 2020 recently came into force, amending the Companies Act 2013 and the Foreign Contribution (Regulation) Act 2010. This article sets out the salient changes introduced by both amendment acts, including with respect to producer companies, offences and the remuneration of non-executive directors.
In view of the COVID-19 pandemic and continuing restrictions on the movement of individuals, the Ministry of Corporate Affairs (MCA) recently issued a circular allowing companies to convene their annual general meeting (AGM) through videoconferencing or other audiovisual means (ie, electronically). With AGMs around the corner, it will be interesting to see how companies will hold virtual AGMs in practice and whether companies and their members will welcome the MCA's relaxations.
India's company law regime has evolved over the years and become stricter and more penal in nature. There has been a paradigm shift in the legislature's viewpoint with regard to the Companies Act's stringency. There has also been a recent trend to promote foreign investment in India. Accordingly, the legislature has adopted measures in order to decriminalise – or at least liberalise – India's company law regime.
Proxy advisers have gained prominence over recent years in relation to corporate governance matters and have become an integral part of shareholder activism in India. In order to standardise the process across proxy advisory firms, the Securities and Exchange Board of India recently issued its Procedural Guidelines for Proxy Advisers and a circular on grievance resolution between listed entities and proxy advisers.
The Ministry of Micro, Small and Medium Enterprises recently notified certain criteria for classifying enterprises as micro, small and medium enterprises (MSMEs) and specified the form and procedure for filing the applicable memorandum. The change in the classification of MSMEs is a part of the relief package offered to the MSME sector amid the COVID-19 outbreak. This reclassification has been well received across sectors as it will help MSMEs to increase in size without losing their entitled benefits.