January 11, 2024 | CA B K Goyal & Co LLP

Section 22 – The Partnership Act, 1932

The Partnership Act, 1932 / CA Bhuvnesh Goyal / January 11, 2024

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How to Get Encumbrance Certificate (EC) Tamilnadu

Government Schemes / CA Bhuvnesh Goyal / January 11, 2024

Encumbrance Certificate or EC is an important property document that provides references to any liabilities in the form of a mortgage or a loan against the property, that has not been cleared. Encumbrance certificate also contains details of all the transactions in a property. Before purchasing a property, it is important to obtain the encumbrance certificate and ensure there are no hidden liabilities. Inspector General of Registration (IGRS) Tamil Nadu or TNREGINET is an online portal developed by the Government of Tamil Nadu to simplify the registration process (marriage, birth, death, firm, chit fund, etc.). You can also check or search for encumbrance certificate through this portal. The portal also has detailed information on stamp and registration fees pertaining to various categories. Other than these, you can also check for property valuation through TNREGINET. Encumbrance Certificate (EC) Encumbrance Certificate is required for those purchasing a property and for those applying for a loan against property. EC contains all the transactions registered with the Registration Department, relating to a particular property for a certain period. Hence, EC helps a person ascertain the commercial transactions that happened to a property over a long period of time, as per Government record. Typically, banks and financial institutions request the borrower to furnish 10-15 years of EC. In some cases, this can also be extended for up to 30 years. Online Encumbrance Certificate in Tamilnadu In Tamilnadu, application for obtaining EC for a property can be submitted online through the Tamilnadu Registration Department website. EC can be obtained in Tamilnadu, within a week of application. The computerisation of EC records has made the entire process easy and fast. The following information must be submitted by the applicant to obtain EC: Applicant Information Name Email Phone for which EC is required Address Property address details for which EC is required Street Name Village Zone Sub-Registrar Office District Property details Old Door No. New Door No. Plot No. Extent Boundaries Survey No. Ward Block Division Tamil Nadu EC Search Step 1: Log in to Inspector General of Registration (IGRS) Tamil Nadu official website at TNREGINET Portal. Step 2: On the left-hand side of the page, you will find “E-Services” tab on the menu bar. Step 3: Put your cursor on it; it will show “Encumbrance Certificate”. Step 4: Move your cursor to “View EC” and click on it. Step 5: You will be redirected to another page where you have to select from two options— “EC” or “Document-wise”. Step 6: If you select “EC”, you have to fill in the required fields, including zone, district, Sub-Registrar Office, EC start date, EC end date, and village, among others. Step 7: Enter the captcha and click on the “search” button to check the concerned EC certificate. Step 8: Alternatively, you can view a certificate by selecting the “Document-wise” option. Step 9: Upon selection, fill in the required fields, including Sub-Registrar Office, document number, year, and document type. Step 10: Enter the captcha and click on the “search” button to check the concerned EC certificate. FAQs Where can I view the transaction status for my e-payment? Use this path to check your transaction status – E-services-> E-Payment-> Payment-> Payment status. Is there any particular timeline to get the encumbrance certificate? As per the Standing Order 979(ii), with respect to the offices and period, which is not computerised, the encumbrance certificate shall be completed and issued within 4 days from the date of application submission. For computerised period, the encumbrance certificate will be issued right away. Why is it important to have encumbrance certificate? With encumbrance certificate, you can get detailed information on previous transactions, which will help you achieve proper entitlement of the concerned property. Hence, it’s always recommended to get encumbrance certificate. 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Who can become a shareholder of a company?

Companies Act 2013 / CA Bhuvnesh Goyal / January 11, 2024

Section 2(84) indicates ownership of an individual towards the company whose shares was purchased. By owning shares from a company one becomes an investor and as per Companies Act, 2013 claims the voting rights. Those who hold the share of the company fall under the category of shareholder thus they are entitled for company’s profit as well bear the loss. The Concept of Shareholders A share in a company represents the units in which the total capital is been divided. In simple words, it’s fractioning the whole paid-up capital into small units to raise the capital for the company. The portion or part of money contributed by a person to make up the capital is known as shares and the contributor towards this unit becomes the shareholder. Shareholders are otherwise known as the member of company under the Act. Section 2(55) – Definition of Members in relation to a company – The subscriber to the memorandum of the company, who shall be deemed to have agreed to become a member of the company and on the registration, is to be entered as a member in the register of the members. Every person who agrees in writing becomes a member of the company where the names are entered in the register. Every person holding shares of the company and whose name is entered as a beneficial owner in the records of a depository. Case Laws Vijay Kumar Narang vs Prakash Coach Builders, 2005 held the name must be entered in the register when a person becomes the member for the first time and not applicable on those who brought share previously. Commissioner of Income Tax Vs. Standard Vacuum Oil Co. held a share is nothing but a part of share capital of a company and includes stocks except where a distinction been placed stocks and shares either be it expressed or implied. What are shares? Equity shares These shares are ordinary shares and the shareholders are entitled to a share in the profit made or surplus profit for the subsequent year only after paying the preference share holders. The same is applicable during the time of winding up, the equity shareholders gets their invested capital only after setting off with the creditors and preference share holder. Preference shares The preference shares are a part of issued share capital which carries preferential rights. They have a preferential right with regards to the return of capital during the time of liquidation of the company. What is allotment of shares? Share allotment is nothing but creation and issue of new shares either in the market (NSE & BSE or other registered stock exchanges) or to the existing share holders by the company. Application and distribution is governed by Companies Act, 2013 and regulation incorporated therein. By purchasing the allotted shares one becomes a shareholder. Modes of Allotment of Shares Mode of allotment of Public Company Mode of allotment of Private Company Public offer (issue of prospectus) Private placement Rights issue and bonus issue Bonus share Private placement or preferential allotment How to become a Shareholder? By subscribing to memorandum: The Act paves way for the investors who have subscribed to the memorandum of association of the company to be considered and deemed to have agreed to become the shareholder/ members of the company and on registration, the member shall be entered in the register of the shareholder By allotment: Any person can apply for shares in the response to the invitation for subscription on reading a prospectus. The application has to be made in the prescribed format and fees as stated therein. By transfer: Shares have to be transferred legally by the shareholder transferor in favour of the transferee who intends to buy the shares. Until the transfer is made in writing in the prescribed format containing the signature of the transferor and the transferee the transfer stays void and thus transferee can’t become a shareholder. By transmission: Shares cannot be transferred in the name of the legal heirs in the events of death or incapacity of the shareholder to get a succession over the shares. Thus the legal heirs have to apply to the company with the request to change the share certificate in their name. For executing the same the death certificate of the shareholder and legal heir certificates of his/her kin has to be produced as evidence. Eligibility to become a shareholder Minor – Though a minor is not qualified to get into contract or agreement as to its considered ab-initio. Thus becoming a shareholder is void. But, Section 11 (Indian Contracts Act, 1872) and Hindu Law however allow an accepted guardian to act on behalf of the minor by permitting the guardian to enter into legal obligations until the minor attains the age of majority. Hence, a minor with an appointed guardian either by court or contract can purchase shares from the listed company as it would validate the minor as a shareholder. Hindu Undivided Family: A HUF is considered as an individual person who is registered and acts as a juristic person for all-purpose. In the case of HUF purchasing shares, it could be done in the name of KARTA (head of the family). Thus even a HUF is entitled and eligible in becoming a shareholder by purchasing shares from the company. Company: Any company can become a shareholder of another company but it is subjected to the approval of the Board of Directors and the same has to be passed in a resolution. Further, the company can be a shareholder only the Memorandum of Association authorizes for investment. Being in terms with the MoA the company has to pass a resolution must consisting of the name of the company, the amount involved in such purchases, consent of the members to be recorded and signed. Also, a company can’t buy its own share Section (68 and 70). Partnership firm: Until and unless the partnership firm is registered it’s neither a legal entity nor a person. Partnership firms apart from the status of being individual, the constituting firm has no rights. Thus an individual in the

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The Competition Act, 2002: Your Guide to Fair Play in the Indian Market

The Competition Act 2002 / CA Bhuvnesh Goyal / January 11, 2024

In the bustling Indian marketplace, where businesses vie for attention and customers, a set of rules ensures a level playing field for all. Enter The Competition Act, 2002, India’s guardian of fair competition and consumer welfare. A Game Changer for a Growing Economy: Before 2002, the archaic Monopolies and Restrictive Trade Practices Act (MRTP Act) struggled to keep pace with India’s rapid economic growth. The Competition Act ushered in a new era, addressing modern anti-competitive practices like cartels, predatory pricing, and market dominance. Key Pillars of the Act: Prohibition of anti-competitive agreements: Bid rigging, price fixing, and market allocation agreements are strictly prohibited, safeguarding consumers from unfair pricing and restricted choices. Curbing abuse of dominant position: Businesses with significant market power cannot leverage their dominance to squeeze out smaller players or dictate unfair terms to consumers. Regulation of mergers and acquisitions: Mergers exceeding a certain threshold must be notified to the Competition Commission of India (CCI), which scrutinizes them for potential harm to competition. Protecting consumer interests: The Act empowers consumers to file complaints against unfair trade practices and seek compensation for losses incurred. Real-World Impact: The Competition Act has not just been gathering dust in legal books. Several landmark cases illustrate its effectiveness: Cement Cartel Case: The CCI imposed hefty fines on cement manufacturers for indulging in price fixing, leading to lower cement prices for consumers. Airlines Cartel Case: Collusion among airlines on passenger fares was unearthed and penalized, promoting competition and potentially cheaper air travel. Google Case: The CCI’s ongoing investigation into Google’s alleged anti-competitive practices in the mobile app market sends a strong message to tech giants. Beyond the Headlines: The Competition Act’s impact extends beyond high-profile cases. It encourages fair play throughout the market, fostering innovation, efficiency, and ultimately, a better deal for Indian consumers. The Road Ahead: As India’s economy continues to evolve, the Competition Act must adapt to meet new challenges. Strengthening enforcement mechanisms, tackling digital market concerns, and fostering a culture of competition remain key priorities. Remember: The Competition Act, 2002, is not just a legal document; it’s a vital force shaping a fair and dynamic Indian market. As businesses and consumers alike navigate the intricacies of this evolving landscape, understanding the Act’s principles empowers everyone to play their part in building a competitive and thriving economy. By understanding and actively participating in the spirit of The Competition Act, 2002, we can all contribute to a prosperous and vibrant India. Disclaimer: This article is for informational purposes only and should not be construed as legal advice. For specific legal guidance, please consult a qualified professional. Provisions of the Competition Act, 2002 Sections of the Competition Act 2002 Description SECTION 1 of the competition act 2002 Short title, extent and commencement SECTION 2 of the competition act 2002 Definitions SECTION 3 of the competition act 2002 Anti-competitive agreements SECTION 4 of the competition act 2002 Abuse of dominant position SECTION 5 of the competition act 2002 Combination SECTION 6 of the competition act 2002 Regulation of combinations SECTION 7 of the competition act 2002 Establishment of Commission SECTION 8 of the competition act 2002 Composition of Commission SECTION 9 of the competition act 2002 Selection Committee for Chairperson and Members of Commission SECTION 10 of the competition act 2002 Term of office of Chairperson and other Members SECTION 11 of the competition act 2002 Resignation, removal and suspension of Chairperson and other Members. SECTION 12 of the competition act 2002 Restriction on employment of Chairperson and other Members in certain cases. SECTION 13 of the competition act 2002 Administrative powers of Chairperson. SECTION 14 of the competition act 2002 Salary and allowances and other terms and conditions of service of Chairperson and other Members. SECTION 15 of the competition act 2002 Vacancy, etc., not to invalidate proceedings of Commission SECTION 16 of the competition act 2002 Appointment of Director General, etc SECTION 17 of the competition act 2002 Appointment of Secretary, experts, professionals and officers and other employees of Commission. SECTION 18 of the competition act 2002 Duties of Commission SECTION 19 of the competition act 2002 Inquiry into certain agreements and dominant position of enterprise SECTION 20 of the competition act 2002 Inquiry into combination by Commission SECTION 21 of the competition act 2002 Reference by statutory authority SECTION 21A of the competition act 2002 Reference by Commission SECTION 22 of the competition act 2002 Meetings of Commission SECTION 23 of the competition act 2002 [Distribution of business of Commission amongst Benches.] SECTION 24 of the competition act 2002 [Procedure for deciding a case where Members of a Bench differ.] SECTION 25 of the competition act 2002 [Jurisdiction of Bench.] SECTION 26 of the competition act 2002 Procedure for inquiry under section 19 SECTION 27 of the competition act 2002 Orders by Commission after inquiry into agreements or abuse of dominant position SECTION 28 of the competition act 2002 Division of enterprise enjoying dominant position SECTION 29 of the competition act 2002 Procedure for investigation of combinations SECTION 30 of the competition act 2002 Inquiry into disclosures under sub-section (2) of section 6. SECTION 31 of the competition act 2002 Orders of Commission on certain combinations SECTION 32 of the competition act 2002 Acts taking place outside India but having an effect on competition in India SECTION 33 of the competition act 2002 Power to issue interim orders SECTION 34 of the competition act 2002 [Power to award compensation.] SECTION 35 of the competition act 2002 Appearance before Commission SECTION 36 of the competition act 2002 Power of Commission to regulate its own procedure. SECTION 37 of the competition act 2002 [Review of orders of Commission.] SECTION 38 of the competition act 2002 Rectification of orders SECTION 39 of the competition act 2002 Execution of orders of Commission imposing monetary penalty SECTION 40 of the competition act 2002 [Appeal.] SECTION 41 of the competition act 2002 Director General to investigate contraventions SECTION 42 of the competition act 2002 Contravention of orders of Commission SECTION 42A of the competition act 2002 Compensation in case of contravention of orders of Commission SECTION 43 of the competition act 2002 Penalty for failure to comply with directions of Commission and Director General SECTION 43A of the competition act 2002 Power to impose penalty for non-furnishing of information on combinations SECTION 44 of the competition act 2002 Penalty for making false statement or omission

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