RESTRUCTURING AND SHAREHOLDER’S DISPUTES
We understand that success in today’s dynamic business environment demands more than just compliance with the Companies Act, 2013; it requires insightful legal counsel that can strategically leverage the provisions of this legislation. Our dedicated team of legal experts is committed to guiding businesses, directors, and shareholders through the intricate framework of the Companies Act, offering a spectrum of services that empower corporate growth and governance.
We offer legal counsel for companies to go beyond compliance and strategically leverage the provisions of the Companies Act 2013. We guide businesses, directors, and shareholders through the intricate framework of the legislation to improve corporate growth and governance.
We are committed to upholding corporate governance and protecting shareholder rights through legal remedies against oppression and mismanagement within a company. Our experts guide clients through the legal process, advocating for their rights and taking legal actions where necessary to rectify issues, safeguarding the interests of minority shareholders.
Specializing in mergers and demergers, we hold expertise in consolidating business operations for synergy, unlocking value through spin-offs, and restructuring corporate entities. We conduct comprehensive due diligence, draft necessary documents, liaise with regulatory authorities, and guide you through the process, ensuring a smooth business transition.
Our team assists companies in optimizing their capital structures through the reduction of share capital in accordance with legal provisions. We help them secure approvals and manage the intricacies involved, providing clients with a compliant, cost-effective means to improve financial health and shareholder value.
Beyond specific services, our firm offers comprehensive corporate compliance and advisory services under the Companies Act 2013. We assist businesses in adhering to statutory requirements, including conducting statutory audits, board meetings, and AGMs, to ensure compliance with corporate governance norms and legal obligations.
FREQUENTLY ASKED QUESTIONS (FAQs):
Oppression refers to conduct that is prejudicial to the interests of the shareholders or any class of shareholders of a company. Mismanagement refers to the inefficient or improper management of a company’s affairs. These concepts aim to protect shareholders’ rights and ensure a company’s fair and proper management.
Yes, a minority shareholder who holds at least 10% of the share capital or voting rights can file a complaint for oppression and mismanagement if they believe that their interests are prejudiced by the actions of the company’s management. NCLT holds the power to waive off the requirement of having a minimum 10% share capital if it deems fit.
Reduction of share capital is the process through which a company decreases the total value of its shares that are issued to shareholders. This can involve reducing the total number of shares, the face value of shares, or both.
A company can reduce its share capital through a court-approved process, which involves passing a special resolution, obtaining approval from the National Company Law Tribunal (NCLT), and complying with other statutory requirements. Reduction of share capital may be carried out for various reasons, including to write off losses or to distribute surplus to shareholders.
Companies might consider reducing their share capital to:
– Adjust their capital structure to reflect their financial situation better.
– Write off accumulated losses or other financial liabilities.
– Distribute surplus capital to shareholders.
– Facilitate a restructuring process.
A special resolution is a formal decision taken by shareholders in favour of a significant action, such as reducing share capital. It usually requires approval from a specified majority of shareholders, often at least 75%.
Depending on the type of reduction, shareholders might see a decrease in the number of shares they hold, a reduction in the face value of shares, or other changes. It’s important for shareholders to understand how the reduction will impact their ownership and rights.
Corporate governance ensures that companies are managed in a responsible and transparent manner, protecting the interests of shareholders and stakeholders. It includes practices that promote ethical conduct, accountability, and effective decision-making.
The Act provides a framework for mergers, demergers, reverse mergers, acquisitions, and amalgamations, including the process of obtaining approvals from shareholders, creditors, and regulatory authorities, including NCLT.
A demerger involves the transfer of one or more undertakings from a company into another company. The Companies Act, 2013, provides a framework for demergers, requiring the preparation of a demerger scheme, obtaining approvals from shareholders, creditors, and regulatory authorities, and ensuring compliance with the terms of the scheme.
The process of merger or demerger typically involves legal due diligence, valuation of assets and liabilities, drafting of merger or demerger schemes, obtaining necessary approvals from shareholders, creditors, NCLT, and regulatory authorities, and ensuring compliance with post-merger or post-demerger obligations.
Related party transactions involve transactions between the company and its related parties. Such transactions require approval from the board and may need shareholders’ consent, ensuring transparency and preventing conflicts of interest.
Yes, foreign companies can establish a presence in India through subsidiaries, joint ventures, or other modes of entry, subject to compliance with foreign investment regulations and relevant provisions of the Act.
