Corporate Law

Indian company law regulates corporations formed under Section 2(20) of the Indian Companies Act of 2013, superseding the Companies Act of 1956.

The following points highlight some of the work the corporate lawyers in India handle in the following seven practice areas.

  • General corporate.
  • Mergers and Acquisitions.
  • Banking and finance.
  • Dispute resolution.
  • Laws of insolvency.
  • Capital markets.
  • Handling white-collar crime litigation.

General Corporate Law :

It thus encompasses the formation, funding, governance, and death of a corporation. … Corporate law regulates how corporations, investors, shareholders, directors, employees, creditors, and other stakeholders such as consumers, the community, and the environment interact with one another.

Mergers and Acquisition Law :

Mergers and Acquisitions in India are principally governed by the following laws: The Companies Act, 2013 has replaced the 1956 Act with respect to Merger & Acquisitions. … The Income Tax Act determines taxation-related considerations with respect to M&A in India, and to transactions which have cross-border elements.

Banking and Finance Law :

Banking Regulation Act, 1949. It is deemed to be one of the most important legal frameworks for banks. It was initially passed as the Banking Companies Act, 1949 and it was eventually changed to the Banking Regulation Act, 1949 (“The BR Act”). Along with the RBI Act, The BR Act provides a lot of guidelines to the banks. A Banks play an important role in financial stability and the economy of a country, most jurisdictions exercise a high degree of regulation over banks. Most countries have institutionalised a system known as fractional reserve banking, under which banks hold liquid assets equal to only a portion of their current liabilities. In addition to other regulations intended to ensure liquidity, banks are generally subject to minimum capital requirements based on an international set of capital standards, the Basel Accords.

Financial law is the law and regulation of the insurance, derivatives, commercial banking, capital markets and investment management sectors. Understanding Financial law is crucial to appreciating the creation and formation of banking and financial regulation, as well as the legal framework for finance generally. A major focus within finance is thus investment management – called money management for individuals, and asset management for institutions – and finance then includes the associated activities of securities trading and stock broking, investment banking, financial engineering, and risk management. Fundamental to these areas is the valuation of assets such as stocks, bonds, loans, but also, by extension, entire companies. Asset allocation, the mix of investments in the portfolio, is also fundamental here.

Dispute Resolution:

Dispute resolution or dispute settlement is the process of resolving disputes between Parties. The term dispute resolution is sometimes used interchangeably with conflict resolution, although conflicts are generally more deep-rooted and lengthy than disputes. Dispute resolution techniques assist the resolution of antagonisms between parties that can include citizens, corporations, and governments.

Alternative Dispute Resolution (“ADR”) refers to any method of resolving disputes without litigation. ADR regroups all processes and techniques of conflict resolution that occur outside of any governmental authority. The most famous ADR methods are the following: mediation, arbitration, conciliation, negotiation, and transaction.

All ADR methods have common characteristics – i.e., enabling the parties to find admissible solutions to their conflicts outside of traditional legal / court proceedings, but are governed by different rules. For instance, in negotiation there is no third party who intervenes to help the parties reach an agreement, unlike in mediation and conciliation, where the purpose of the third party is to promote an amicable agreement between the parties. In arbitration, the third party (an arbitrator or several arbitrators) will play an important role as it will render an arbitration award that will be binding on the parties. In comparison, in conciliation and mediation, the third party does not impose any binding decision.

The main advantages of ADR are rapidity, confidentiality and flexibility.

Laws of Insolvency:

The Insolvency and Bankruptcy Code, 2016 (IBC) is the bankruptcy law of India which seeks to consolidate the existing framework by creating a single law for insolvency and bankruptcy. The Insolvency and Bankruptcy Code, 2015 was introduced in Lok Sabha in December 2015. … The IBC has 255 sections and 11 Schedules.

Insolvency occurs when an individual, company, or other organization cannot meet its financial obligations for paying debts as they become due. Bankruptcy is not exactly the same as insolvency. Bankruptcy is a determination of insolvency made by a court of law with resulting legal orders intended to resolve the insolvency. Insolvency describes a situation where the debtor is unable to meet his/her obligations. Bankruptcy is a legal scheme in which an insolvent debtor seeks relief.

The Companies Act, 2013 and the Insolvency and Bankruptcy Code, 2016 includes provision for determination of sickness, application for revival, appointment of interim/Company administrator, time bound revival process and if revival not possible, liquidation process through single regulator ‘National Company Law Tribunal’.The Companies Act, 2013 provides for regulation of insolvency, including revival, winding-up and liquidation of companies in time bound manner.

It incorporates international best practices based on models suggested by the United Nations Commission on International Trade Law (UNCITRAL). The powers and jurisdiction of Company Law Board, Board of Industrial and Financial Reconstruction and High Court in this regard, is being exercised by National Company Law Tribunal and Appellate Tribunal.

The purpose of creation of the Tribunal is to avoid multiplicity of litigation before various courts or quasi-judicial bodies or forums regarding revival or rehabilitation or merger and amalgamation, and winding up of companies.

Capital Market:

A capital market is a financial market in which long-term debt or equity- backed securities are bought and sold, in contrast to a money market where short-term debt is bought and sold.

Capital markets are where savings and investments are channeled between suppliers—people or institutions with capital to lend or invest—and those in need. … Capital markets are composed of primary and secondary markets. The most common capital markets are the stock market and the bond market.

There are two type of Capital Market :
  1. Primary Market
  2. Secondary Market

Transactions on capital markets are generally managed by entities within the financial sector or the treasury departments of governments and corporations, but some can be accessed directly by the public. As an example, in the United States, any American citizen with an internet connection can create an account with Treasury Direct and use it to buy bonds in the primary market, though sales to individuals form only a tiny fraction of the total volume of bonds sold. Various private companies provide browser-based platforms that allow individuals to buy shares and sometimes even bonds in the secondary markets. There are many thousands of such systems, most serving only small parts of the overall capital markets.

Handling white-collar crime litigation:

White collar crimes are the crimes which cause a harm to the economy of the country as a whole. It threatens the country’s economy by bank frauds, economic thefts, evasion of tax etc. It not only affects the financial status of a country or a person but It has also a negative impact on the society.

White collar crime refers to those offenses that are designed to produce financial gain using some form of deception. … White collar crime also encompasses those businesses that are international, which is covered under the Foreign Corrupt Practices Act (FCPA).

Type of White – Collar Crime:

  • Corporate Fraud.
  • Embezzlement.
  • Ponzi Schemes.
  • Extortion.
  • Bankruptcy Fraud.

Fraud is an act or omission which is intended to cause wrongful gain to one person. and wrongful loss to the other, either by way of concealment of facts or otherwise.

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