Share transfer procedure governed by the depositories system

In case a company wants to transfer shares through a depository, it should convey the allotment details about all aspects to the concerned depositories. Once the intention of making the transfer has been effectively communicated, the seller is expected to provide the Depository Participant 1 with the necessary instructions. The concerned securities are also expected to be given to the first clearing member's pool account with the DP1. After the transfer of securities, the Clearing Member 1 forwards the delivery to the Clearing Corporation and the related instructions are given to the DP1so that the latter can debit his or her pool account while crediting the clearing member 1 automatic transfers to the Clearing Member 2. The process of security transfer also gets repeated in this case. After that, the Clearing Member 2 provides deliver instructions to DP2 for debiting the respective pool account and also for updating the credit buying client account with DP2. Ultimately, the buyer would give a parallel receipt instruction to DP 2 so that the concerned account securities can be accepted in the desired account. The entire process of share transfer under the depositories system has to be carried out with utmost caution so that there are no problems at a later stage.

Registering a company in India

Foreign companies can set up business in India in two main ways. The first way is where they can choose to register as an Indian company. This is possible if they commence operations in India through WOS or joint ventures. The equity and other aspects would vary as per the requirements and preference of the investors. The second option is to enter as an independent foreign company. This is possible by setting up either a branch office, liaison office or a project office. Such offices are allowed to undertake any permitted activities as required by the company. The most important thing here is to fill out the required forms that are available with the ROC so that an application for registration can be filed. The form also needs to be digitally signed by the authorised person from the applicant company. It is also mandatory for the company to obtain a DSC in order to complete the whole process. Once the medium of setting operations is finalised and all other formalities and legalities are cleared, the company should set up a distinct bank account in India itself and take care of other important aspects like recruitment, pay roll, office space and so on.

Partners and shareholders for private companies

The Indian Companies Act of 2013 sets out several regulations related to the partners and shareholders for private companies. The Act lends a democratic power to the shareholders for private firms under which shareholders and all the other stakeholders can make use of the possibilities related to class action suits. This would also make it possible for them to remain more aware and alert. The Act also limits the maximum number of partners that a certain company can have. This limit is up to a hundred and cannot exceed further. However, an exception to this limitation can be seen in case of certain association partnerships that will not be bound by this fixed limit. Some examples of such association partnerships will include CA's, lawyers, company secretaries and the like.

The maximum number of shareholders for a private company has been increased to 200 by the Act. The Act also vests the shareholders with powers to sanction several limits in case of required approvals related to important transactions at different levels. This supremacy of shareholders that is allowed by the Companies Act 2013 is a good way that has reduced the need for acquiring permissions related to managerial remuneration in case of private companies.

Obtaining status of Dormant company

Dormant companies are an excellent option for those promoters who want to hold an asset under their corporate umbrella to be used at a later stage. The provision for obtaining the status of a dormant company is a new and effective tool that can be of great advantage for foreign investors as well. In order to apply for obtaining the said status, there are certain conditions that need to be adhered to. Some of those conditions can include that the applicant company is free form any legal inspections or investigations in the past, the company does not have any outstanding public deposits as such nor is it under default for monetary payments. Apart from these, there are other conditions too that have been listed in detail under the CA2013. In order to obtain the status of a dormant company, there is a systematic procedure that needs to be followed which begins with a formal board meeting. A particular director would have to be authorised for applying as a dormant status with the ROC and the notice will have to be issued in the general meeting of the company. The procedure also requires the filling up of the forms that are available with the registrar and sending them for approval along with other relevant documents. Once the form is approved, a system generated certificate is sent to the company declaring its dormant status.

Managing intermediaries in a capital market system

There can be several classifications for the intermediaries in a capital market system and also on a crowd funding platform. According to the functions that they are assigned and the way in which they perform, these intermediaries could be either listing avenues or serve as mediums for project recommendation at several levels. There is no doubt that they are quite essential to a capital market system. As a matter of fact, under the concept of crowd funding, it requires special attention. As a company planning to start up a business in India, it is quite essential to be aware of the right ways of managing intermediaries in a capital market system. The initial goal should be to develop a complete understanding of crowd funding regulations and several innovative features that are associated with them. You could think about availing schemes related to licensing, record maintenance and so on. It is important to remember that intermediaries can serve different roles and that is why a funding portal or any related systems might need to be modified accordingly. In case of foreign projects in particular, jurisdictional matters should be fully understood and complied by so that any conflicts or issues can be avoided well in advance.

Maintaining the e-documents of your company

The Companies Act 2013 prescribes all the listed companies to convert all their records and documents into an electronic mode. The aspect of an e-governance has also been introduced so that the statutory records of the company can be maintained and inspected in a better way. Digital signatures and placement of the company's financial statements on its official website are some other processes that have been suggested by the Act. Apart from all the listed companies in general, those with less than a thousand share or debenture holders and other security holders will be expected to maintain these electronic records. In addition to that, the existing companies are also expected to convert the physical records to electronic form within a period of six months of being notified for the same. The maintenance of the e-documents of the company would be carried out as per the decision of the Board of Directors and in accordance with the stated rules. The e-documents should be retrievable and reproducible in the printed form. However, it is important to keep in mind that the e-documents should not be editable in any format. You should make sure that the e-documents of your company can be updated as and when required and also, you should be able to save the updates with ease. Cyber security for your documents is extremely essential and you must take care of these aspects.

Loans, finances and funding portals: A comprehensive overview

According to the Companies Act 2013, all the listed or categorised companies in India are allowed to make investments only through two layers of investment. The Act also imposes several onerous conditions for inter-corporate loans. Under the Companies Act 2013, no company shall give out any loans directly or indirectly to the directors. This also applies to any individuals who might be favoured or shown an interest in by any of the directors. The companies are not even allowed to guarantee anything in connection with the loans to the afore mentioned people. Detailed descriptions have been stated by the Act in relation with inter corporate loans, layered investments and the various types of funding portals that are permitted for the companies that are functioning both in the public sector or the private sector. In case of funding options or any investment plans, the discussion and a unanimous approval of the Board of Directors is mandatory. In case of certain necessary loans, a special resolution is required to be passed which also requires the involvement of shareholders and their majority opinion. The CA2013 also provides prescriptions related to enhanced loan requirements, securities and even guarantees at several levels that make the regulations quite clear for the companies.