March 2025

Register of Members of a Company under Companies Act 2013

As per Section 88(1), companies are required to maintain a register for different categories of members in a prescribed manner: Maintenance of Register of Members: Register of Equity and Preference Shareholders: In accordance with Section 88(1)(a), companies must maintain separate registers for equity shareholders and preference shareholders, regardless of whether they reside in India or […]

Red Herring Prospectus by a Company Launching IPO

When a company decides to go public through an Initial Public Offering (IPO), it must provide prospective investors with detailed information about its business, financial standing, and associated risks. One of the most crucial documents in this process is the Red Herring Prospectus (RHP). This preliminary document offers insights into the company’s financial health, market

Nomination and Remuneration Committee and Stakeholders Relationship Committee

The Nomination and Remuneration Committee plays a vital role in identifying individuals who are suitable for the role of Directors and senior management positions, based on established criteria. It is responsible for evaluating their qualifications, integrity, and overall suitability for appointment. The Committee then makes recommendations to the Board regarding their selection or removal. Additionally,

Can a company change the number of shares ? – A Complete Guide

A listed company holds the right to modify the number of shares held by its promoters and top ten shareholders if needed. This authority allows the board to increase or decrease share counts as part of their strategic decisions. When such adjustments occur, it is mandatory to file a return in a prescribed format to

Punishment for Fraudulent Inducement in Investment

The integrity of financial markets and investor confidence depend largely on transparency and truthfulness in the communication of company information. Section 36 of the Companies Act, 2013, aims to prevent fraud in securities transactions by penalizing fraudulent inducement in investments. This section applies to misleading statements or deceptive practices that persuade individuals to invest in

Civil Liability for Misstatements in a Prospectus by Company

A company’s prospectus serves as a critical document that provides potential investors with key information about the company’s operations, financial position, and future prospects. Since investment decisions are heavily influenced by the contents of a prospectus, any false or misleading statements in it can cause financial harm to investors. Section 35 of the Companies Act,

Understanding Preferential Creditors Under Section 327 of the Companies Act, 2013

When a company faces insolvency or enters liquidation, one of the first aspects under review is the conduct of its directors prior to the financial collapse. This scrutiny includes assessing any transactions that might have unfairly benefited certain creditors—these are termed preferential payments. In such cases, the role of the liquidator becomes crucial, as they

How to Calculate Net Profit of a Company – Complete Research

Section 198 of the Companies Act, 2013, provides guidelines for determining the remuneration of 16 key managerial personnel for a financial year, as specified under Section 197. The provisions under subsection (2) outline the sums to be credited, whereas subsection (3) specifies amounts that shall not be considered as credits. Further, subsections (4) and (5)

Understanding the Extra-Ordinary General Meeting (EGM)

Every company is required to conduct an Annual General Meeting (AGM) as per Section 96 of the Companies Act, 2013, except for one-person companies. The AGM is scheduled on a fixed date each year to review past performance and discuss future plans. However, certain urgent matters arise outside the AGM cycle that require immediate attention.

Shelf Prospectus under Companies Act 2013 – A Complete Guide

Section 31 of the Companies Act, 2013, introduces the concept of a shelf prospectus, a significant advancement in the regulatory framework governing securities issuance in India. This provision allows certain classes of companies to issue securities multiple times within a specified period without the need to file a fresh prospectus for each offering, thereby streamlining