CASE SUMMARY

P.MOHANRAJ & ORS (APPELLANTS)

VS

M/S SHAH BROTHERS ISPAT PRIVATE LIMITED (RESPONDENTS)

FACTS OF THE CASE

Steel products were supplied by the Respondents to M/s Diamond Engineering Private limited (Appellants) as a result of which INR 24,20,91,054 were due and payable by the Appellants. Cheques were issued in favor of the Respondents which were returned dishonored due to insufficient funds. Respondents issued demand notice under Section 138 r.w. Section 141 of the Negotiable Instrument Act, 1881 (“NIA 1881”) against the company and its directors. No payments were made and criminal complaints were filed against the Appellants u/s 138 r.w. sec 141 of NIA,1881.

Being a statutory notice, application was admitted by the Adjudicating Authority (“AA“) (NCLT) u/s 9 of the Indian Bankruptcy Code 2016 (“IBC 2016” or “Code“) and order of moratorium was ordered u/s 14 of the Code. AA further stays the criminal proceedings against the Appellants. In an appeal by the Respondents, National Company Law Appellate Tribunal (“NCLAT“) set aside AA order staying proceeding, holding that Section 138, being a criminal law provision cannot be held to be a proceeding within the meaning of Section 14 of the Code. Appeal was filed in the Supreme Court against NCLAT order .

ISSUE RAISED

– Whether the institution or continuation of proceedings under Section 138 r.w. Section 141 of the NIA, 1881 can be said to be covered under the provision of moratorium given under Section 14 of the IBC 2016

-Whether the expression “proceeding” can be cut down to mean civil proceedings in strict sense by using rule of interpretation such as “Ejusdem generis or noscitur a sociis”

-The nature of proceeding under Chapter XVII of the NIA 1881

ARGUEMENTS

For Appellants

It was argued that object of Section 14 of the Code is to preserve the assets of Corporate debtor during Corporate Insolvency Resolution Process. It would be incongruous to hold that Section 138 proceeding which although is criminal proceeding, whose essence is to recover money be kept out of the word “proceedings” in Section 14 Further it was argued that Section 14(1)(a) is extremely wide and is ought not to be cut down by the judicial interpretation given the expression “ANY” occurring twice in Section 14(1)(a). Therefore no rule of construction be it “Ejusdem Generis or noscitur a sociis” can be used to cut down the plain meaning of the words given u/s 14.

For Respondents

Rebutting claims of the Appellants counsel, the Respondent referred to Insolvency Committee Report of Feb 2020 to drive his point about the object of Section 14 of the code. Being a limited one cannot include a criminal proceeding within its meaning. Reliance was also placed upon the rule of “Noscitur a sociis/Ejusdem generis” construction and consistent view of High Court that “Section 138 being a criminal law provision cannot be covered by Secion 14, Additional Solicitor General (“ASG”) relied on the rule of “Noscitur a sociis” to state that expression “proceeding” contained in Section 14(1)(a) is preceded by the expression “Suits” and followed by the words “Execution” and it has to be read in a sense analogous to civil proceedings dealing with private rights of action as contrasted with criminal proceedings.

HOLDING

Court held that Section 138/141 proceeding against a corporate debtor is covered by Section 14(1)(a) of the code. However , the statutory bar under Section 14 of the code shall be applicable only to corporate debtor i.e. The company only and not to natural persons that is to say proceedings against the natural person such as Director, officer mentioned u/s 141 of the NIA,1881 can continue and would not be covered by the provisions of moratorium.

RATIONALE

-The court while interpreting Section 14 of the Code held that the sweep of the provision is very wide. Court said that the expression “Continuation of suits, continuation of pending suits” is to be read as one category and the disjunctive “OR” before the word proceeding would make it clear that proceeding against the corporate debtor would be a separate category

-The court relied on various judgments to see whether rule of “Ejusdem generis/Noscitur a sociis” can be applied in current situation and held that “ there must be a distinct genus or category running through the bodies already named to invoke rule of Ejusdem generis

-While dealing with rule of “Noscitur a sociis” the Hon’ble court relying on Mazdoor Sabha case : It must be borne in mind that “Noscitur a sociis” is merely a rule of construction and it cannot prevail in cases where it is clear that the wider words have been deliberately used in order to make the scope of the defined word correspondingly wider. It is only where the intention of the legislature in associating wider words with words of narrower significance is doubtful, or otherwise not clear that the present rule of construction can be usefully applied

-Given the object sought to be achieved by moratorium provisions, it is impossible to discern any difference between the impact of a suit and a Section 138 proceeding, insofar as the corporate debtor is concerned, on its getting the necessary breathing space to get back on its feet during the CIRP.

-It is difficult to accept that “Noscitur a sociis or ejusdem generis” should be used to cut down the width of the expression “proceedings” so as to make such proceedings analogous to civil suits.

-A Section 138 proceeding can be said to be a “civil sheep” in a “criminal wolf’s” clothing, as it is the interest of the victim that is sought to be protected, the larger interest of the State being subsumed in the victim alone moving a court in cheque bouncing cases.

-The Bench further noted that “mens rea” was not an ingredient of the offence. It also took note of the fact that there is a departure from the procedure under the Code of Criminal Procedure for cheque cases. First and foremost, no court is to take cognizance of an offence punishable under Section 138 except on a complaint made in writing by the payee or the holder in due course of the cheque – the victim.

This article has been authored by Mr Shikhar Pandey, a qualified Company Secretary.The author can be contacted on pshikhar013@gmail.com. The entire contents of this article are solely for information purpose and have been prepared on the basis of relevant provisions and as per the information existing at the time of the preparation by the author.

Process of alteration in Articles of Association

The articles aims to provide it’s readers an understanding of the process for causing an amendment in the Articles of Association (“AOA“) of a company. AOA is one of the main document of a company which governs the internal rules and regulations of the management of the company. It is framed to carry out the objectives as set out in the Memorandum of Association (“MOA”) of the company. The articles of a company shall be in respective forms specified in Tables F, G, H, I and J in Schedule I as may be applicable to such company.

Any company which intends to make any change to it’s AOA, will have to comply with the provisions of Section 14 of Companies Act, 2013 (“Act”) and any other applicable provisions of the Act and applicable rules. However, every alteration so made has to be recorded in the MOA/AOA of the company.

STEPS FOR ALTERATION IN ARTICLES OF ASSOCIATION OF A COMPANY

The following are the 5 steps for causing an alteration in the AOA of a company –

1.Convey meeting of Board of Directors of the company

The first step for carrying out the alteration in AOA of the company is to convey a board meeting. The said meeting shall be conveyed by giving a prior notice of atleast 7 (seven) days.

2. Conduct meeting of Board of Directors of the company

The following resolutions should be passed in the Board Meeting so conducted –

  • resolution in relationto alteration in AOA
  • member approval foralteration in AOA by way of special resolution
  • fixing the date, time, and venue of the Extra Ordinary General Meeting (“EGM”) and
  • authorizing a director or any other person to send the notice for the same to the members

3. Issue of notice of General Meeting

The director/other person so authorized shall serve a notice of EGM at least 21 days before the actual date of EGM. In case the 21 day time period has lapsed, the EGM can be called on shorter notice with the consent of members atleast majority in number.

4. Hold the Extra Ordinary General Meeting

The EGM shall be held for the above purposes, special resolution to be passed for approving the alteration of the AOA.

5. Filing of Form MGT-14

Form MGT-14 (Filing of Resolutions and agreements to the Registrar under section 117 of the Act) to be filed with the Registrar within 30 days of passing the special resolution, along with given documents:-

  • certified true copies of the special resolution along with explanatory statement;
  • copy of the notice of meeting sent to members and
  • copy of the altered AOA.

Rights Issue under Companies Act 2013

This article aims to provide the readers complete information pertaining to the process of rights issue under the Companies Act 2013. “Rights Issue”, in very simple term means issue of shares by a company to its existing equity shareholders in proportion to their existing share holding. It is a mechanism through which a company can infuse fresh capital into its business. Any company – a private, public, listed or unlisted company can undertake a rights issue. The Rights shares are considered to be a type of “option” since they are in the nature of a right and do not act as an obligation for the shareholders of the company, to purchase additional shares in the company.

Procedure for rights issue under Companies Act 2013

According to Section 62 (1) of the Companies Act 2013 (“Act”), the procedure for issue of shares is as follows:

Issue of notice for conducting a Board meeting:

According to Section 173(3) of the Act, the notice for conducting a board meeting has to be sent to the board of directors, minimum 7 days prior to the board meeting. Such notice must also specify the agenda for the meeting.

Convening Board Meeting:

Once the board meeting is held, and the resolution for issuing rights shares is passed, the board can proceed towards the issue. The rights issue does not require the approval of shareholders.

On the passing of the resolution, the letter of offer is issued to all shareholders, and the same is sent through registered post or speed post or via electronic means. For shareholders to accept the offer, the offer should last between 15 – 30 days. So technically, the maximum time the shareholders can take to accept such offer is 30 days and the minimum period is 15 days.

If the shareholder holder does not provide any response, the offer will deemed to be lapsed. If a shareholder is not interested in accepting the offer of additional shares, he can renounce the same in favour of any other person, who may not be member of the company. 

Filing of e-form MGT – 14:

After the passing of board resolution, the company must file the MGT -14 (applicable only to Public Limited Company) within 30 days of passing of the Board Resolution. A true certified copy of the Board Resolution also needs to be attached to MGT 14.

Receipt of Application Money:

The shareholders must send the accepted application along with application money.

Convening Second Board Meeting for allotment of shares:

The company must convene the second board meeting for the purpose of allotment of shares and carrying out other provisions for undertaking rights issue, the notice of which must be sent 7 days prior to the board meeting. The required quorum must be present, and the resolution for the allotment of shares must be passed. On passing the resolution for allotment of shares, the allotment of shares must be done within 60 days of receiving the application money for the same.

Filing of e- forms with Registrar of Companies:

The company must also file Form PAS -3 (“Return of Allotment“), within 30 days from the allotment of the shares with the Registrar of Companies. The certified true copy of the Board Resolution and the list of the allottees must be attached to the form. Additionally, the MGT – 14 must also be filed for both the allotment and issue of shares.

Issue of Share Certificates:

The share certificates must be issued in Form SH -1. If the shares are held in Demat form, then the company must inform the depository immediately on allotment of shares. If the shares are held in physical form, then the share certificates must be issued within 2 months from the date of allotment of shares. Once the share certificates have been issued, requisite changes shall be also be made in the Register of Members (“MGT-1“).

Understanding the “Right of Pre-emption”

“A pre-emption right” or “right of pre-emption” is the “first option to buy a contractual right”.As per Section 62(1) of the Companies Act, 2013 if the Company decides to issue fresh shares, these should be offered to existing shareholders in proportion to existing persons who are holders of equity shares. The existing equity shareholders have the right of pre-emption over the new investors. However,the existing shareholders are not to be given further pre-emptive rights in respect of the shares.not accepted by them. 

Conclusion

Rights issue is a mechanism through which a company can raise capital to serve the purpose of its business expansion activities without reaching out to the general public. This resolves the purpose of additional capital while letting existing shareholders retain their voting rights in the company.

Manual Scavenging and Laws in India

In 1993, the Government of India enacted the “Employment of Manual Scavengers and Construction of Dry Latrines (Prohibition) Act” which prohibited the employment of manual scavengers for dry latrines and related concerns.

The Prohibition of Employment as Manual Scavengers and their Rehabilitation Act, 2013 was enacted, that prohibits construction or maintenance of insanitary latrines, and employment of any person for manual scavenging or hazardous cleaning of sewers and septic tanks

Recently, The Prohibition of Employment as Manual Scavengers and their Rehabilitation (Amendment) Bill, 2020, (“Bill”) has been proposed by the Government to completely mechanize the process of sewer cleaning and provide better protection at work and compensation in case of accidents.

Highlights of the Bill –

-This bill aims at complete elimination of hazardous cleaning of sewers and septic tanks with a more serious, stringent and focused strategy framework.

-The plan aims to modernize existing sewage system and coverage of non-sewered areas, setting up of faecal sludge and septage management system for mechanised cleaning of septic tanks, transportation and treatment of faecal sludge, equipping the municipalities, and setting up of Sanitation Response Units in case of any help.

-The bill also proposes to make the law banning manual scavenging more stringent by increasing the imprisonment term and the fine amount.

What is Manual Scavenging?

Manual scavenging is the practice of manually cleaning, carrying, disposing or handling human and animal excreta from sewers and streets.

Is it legal in India?

Even though the practice is illegal in India, there are lakhs of people who are still employed as “manual scavengers”, particularly the Dalits.

What is the plight of Manual Scavengers in India?

Not only do manual scavengers have to work in filthy and abhorrent conditions, they are also socially ostracized by the society. Common issues that they face are untouchability, verbal abuses and exclusion from social functions.They are also probe to respiratory infections and diseases.

The proposed bill has brought in a lot of much needed changes, providing a sigh of relief to the manual scavengers.However, the Bill is silent on one of the core issue i.e of caste. Sanitation remains a caste-based occupation. There is little chance that the children of the families engaged in manual scavenging, can escape from the lifetime of demeaning society work performed by their parents and their ancestors since inception.And this could be possible only with quality education and alternative job opportunity being provided to them for a bare sustainable living.

How can lawyers handle employment gaps in their resume?

Every lawyer is not always blessed with a stellar employment history that matches their career goals. While the first generation lawyers find it extremely difficult to set up their own law practice, there are many who find themselves with substantial employment gaps or a string of short-term work experiences dominating their resume. The reasons for resume gaps can be numerous, ranging from taking time off to raise families, providing care for an ailing relative, or overcoming a health condition of their own etc. However, long term gaps on resumes are often considered to have a detrimental impact on the job prospects of job seekers and one should have a strong reason to justify the same.

Here are the 5 most essential tips on how a lawyer can handle such gaps in their resume and pump up their professional resume to make a better case of their candidacy –

1. Always follow the unfeigned approach

The most important thing to remember when dealing with a gap in your resume is that, whatever the reason for taking a break from your legal career may be, acknowledging and explaining a gap won’t harm your chances of employment but lying about a gap will. There’s nothing you can do to change your work experience, so the best strategy is to be truthful about it.

2. Try to draw the attention of the recruiter on your pro-bono employment history

If you have worked as a volunteer, for example – participation in free legal aid campaigns or were an active member of the mooting society, placement committee etc in your law school or have taken up an unpaid internship at any law offices/organisations, that allowed you to build relevant skills or gain industry experience, then these positions should be mentioned on your resume. You must describe your role and responsibilities by highlighting the major contributions and accomplishments on your resume.

In case you have worked as a freelancer for a number of clients then you must include it in your resume, under a separate section.You must summarize the services offered by you by highlighting the work you did and the results you achieved.

3. Show a consistent employment history

An inconsistent employment history might land the job seeker in serious trouble. Employers, these days review the social media profiles of the prospective candidates before contacting them for a job interview.So while applying for a job, one must ensure that the social media profile, on various platforms like – Linkedin, Naukri.com etc is in cohesion with what has been stated in the resume.

4. Go in for professional development

The gaps in the resume can be also be addressed by demonstrating to the employer that you have utilized your time effectively. There is absolutely no harm in pursuing skill development courses. There are many free and low-cost training opportunities/programs available online and in person. Various websites like SkillShare, edX, Cousera, Udemy etc offer short courses and certification programmes that help in skill up-gradation.

If you can’t find a course suiting your needs then there are various ways of potraying your talents. For example – writing a blog, can be extremely fruitful, in showcasing your knowledge and writing skills.

5. Consider revamping your resume

If you find it difficult to make your skills and experience shine with the standard resume format, you can consider using a different resume format – essentially a functional resume. A functional resume focuses more on skills than professional experience, which can be helpful for someone who has gaps in their career history.

However, this type of resume should only be used as a last resort. Recruiters and hiring managers generally dislike functional resume because they deviate from the traditional layout. It might give an impression that you are attempting to hide something. 

One of the key things to remember here is that, you are likely to be offered an interview, if your resume proves to be successful. During the interview, it’s almost inevitable that you will be asked about these gaps in some form or the other. So prior preparation of what you’re going to say, most importantly a short and a witty response, is very essential. So if you have taken years out of your employment, then planning is the key for getting back into the market. 

If you are looking for advice on your legal career, please feel free to reach out to us on team.legalrecourse@gmail.com.

Related Party under Insolvency and Bankruptcy Code 2016

The Insolvency and Bankruptcy Code, 2016 (IBC) has been formulated for the purpose of rehabilitation and reconstruction of a corporate person. In the year 2018, IBC was amended and the definition of “Related Party” with respect to an individual under Section 5(24A) was introduced.  Before such amendment the IBC had defined the term “Related Party” only with respect to a corporate debtor under Section 5(24).  

Who is a related party under the IBC?

The definition of “Related Party” under the IBC is exhaustive in nature. A related party in terms of a corporate debtor is a person who can act in managerial or directorial capacity. Such a person can have a substantial amount of shareholding in the corporate debtor or be in a position to make decisions for the corporate debtor or its subsidiaries, holdings or associate company. IBC points out at the related party in the context of the company under corporate insolvency resolution process and mentions the relative of the director or partner of the corporate debtor, however, it does not clarify who falls under the definition of a “relative”

As per definition provided under the Section 5(24) IBC, a related party can be –

-Director or partner or key personnel of the corporate debtor or any their relative

– Holding, associate or subsidiary of the corporate debtor or a subsidiary of a holding company to which the corporate debtor is a subsidiary

-A private or public company in which a director, partner or manager of the corporate debtor is a director and holds along with relatives, more than two per cent. of its paid-up share capital

-A Limited Liability Partnership where a director, manager, partner of the corporate debtor or their relative is a partner

-Any person holding 20% voting share in the corporate debtor or the corporate debtor holding 20% voting share in any person

-A person on whose instructions a director, manager or partner is accustomed to act

-A person who can control the composition of the board of directors

-Any person who is associated with the corporate debtor on account of

a. participation in policy making processes of the corporate debtor; or

b. having more than two directors in common between the corporate debtor and such person; or

c. interchange of managerial personnel between the corporate debtor and such person; or

d. provision of essential technical information to, or from, the corporate debtor

Section 5(24) (m) can be interpreted widely.Simply put, two entities having more than two directors in common or have an interchange of managerial personnel or participation in policy making processes, will be considered to be related parties of each other. 

Related Party Transaction

Related party transactions are transactions between two parties having a pre-existing relationship/common interest with each other.

Related Party and their right to submit a resolution plan

Before understanding whether a related party is entitled to submit a resolution plan, let us understanding what actually does the term “resolution plan” mean. In simple words, a resolution plan is a unique combination of financial, legal, management and technical features which would provide a reasonable assurance of sustainable viability over the period of recovery and provide a solution to the problem of the corporate debtor’s insolvency and its consequent inability to pay off debts. 

The resolution professional calls for a resolution plan for the purpose of rehabilitation of company by the investors / resolution applicant (any person who submits a resolution plan to the resolution professional) which consists of proposals for buying out a company undergoing company insolvency resolution process as a going concern. The amount stated in the resolution plan is distributed among the creditors in accordance with the said plan.

Section 29A of IBC lays down multiple criteria and a comprehensive standard for ineligibility of resolution applicants. A person who is related to the person disqualified under Section 29A will also be rendered disqualified.

So for example – anyone in relation to the individual (defaulter promoter) or their spouse; partner in a partnership firm or trustee in a trust in which the defaulter individual is associated; a private company in which is the individual is a director and holds over 2% share capital including family and relatives, shall be ineligible to submit a resolution plan.

Conclusion

IBC has exhaustively covered all the aspects pertaining to related parties. However, being a relatively new legislation, several amendments are being made to cover all the loopholes. There is still nothing in the code as regards related party of a company or body corporate (other than corporate debtor). In such a case, the code under Section 3(37) has said that for the words not defined under the code, definitions given under the Companies Act, 2013 will be applicable.

Smart Contracts : Simply Explained

This article explains the concept of smart contracts and their viability in future. “Smart contracts” or “Self regulated contracts” are a modern way of executing contracts, even though they are undefined in India, presently. As the same suggests, they are digital contracts with an ability of self implementation, without the help of any intermediary. These contracts use “block chain technology” (which is a system of storing information in a way that makes it difficult or impossible to alter, hack, falsify or cheat) thereby eliminating the need of third parties to execute the “consideration” part of the contracts.

Smart contracts are just like regular contracts defining strict terms, conditions and the consequences of non-performance of the contract. They use certain information as the input, process the same by using a code and then shift to take necessary actions that are required to obtain the result.

Features of Smart Contracts

Smart contracts are based on programs, which is drafted with the help of human beings.The most essential features of these contracts are as follows –

  1. Conduct of the contracts

The execution, negotiation and coding of these contracts are done entirely with the use of block chain technology.The terms of these contracts are mostly based on “yes/no”, “if/then”, “whether or not” etc.

2. Authentication

They are authenticated by third party miners who are paid in a cryptocurrency (“a technology that lets users make secured payments/store money without the need of using their name or going to a bank”)

3. Error free

These contracts have a minimal chance of being wrong due to the intervention of computer codes. Smart contracts are easy to understand and comprehend. It ensures authentication and helps in preventing all kinds of frauds.

Legal Status of smart contracts in India

For any contract to be enforceable in India, it is necessary that it fulfills the basic essentials such as offer, acceptance, consideration, lawful subject matter, consideration and parties that are competent to contract. Further, there are no specific rules regulating self-contracts, and with no regulations in sight, such contracts are regulated by the Indian Contract Act 1872, the Information and Technology Act 2000 (“IT Act“) and the Indian Evidence Act, 1872.

The IT Act does allow contracts to be validated by the use of electronic signatures. Section 35 of the IT Act, has specified that the digital signature can be validated only by the government.

Also, the evidentiary value of smart contracts is put into stake under the Indian Evidence Act, 1872 because as per it’s provisions only those digital records are admissible whose authentication is done by a valid digital signature obtained in consonance with the provisions of IT Act.

Use of Smart Contracts and Block chain technology in India

In India, Tata Consultancy Services has recently introduced a composite quality engineering service for blockchain applications called “TCS Blockchain QE Services” that combines smart contract auditing with cloud deployment design, API audits, and usability testing to help enterprises safeguard against security, privacy, and reliability threats.

Conclusion

Undoubtedly, smart contracts can be considered as the future of contract negotiation and execution. Smart contracts can be used in all spheres of lives, from payment gateways, revolutionalise the share markets, banking transactions etc.

These contracts keep an irrevocable record of information stored by using the block chain technology. Being cost effective in nature, these contracts ensure speedy execution and remedy.

The smart contracts provide a good opportunity to the government for helping in curbing corruption involved in various sectors and departments.In fact, the government has plans to bring reforms to the agricultural sector in India with blockchain involving quality check, productivity check and nullifying the role of intermediaries.

Section 3 of Companies Act 2013: Formation of Company – Decoded

This article aims to acquaint the reader with the key requirements involved in formation of a company. Section 3 of Companies Act 2013 (Act) entails the basic requirements of formation of a company. A company, (whether a company limited by shares or a company limited by guarantee or an unlimited company) may be formed for any legal purpose by :

a. 7 or more persons, in case of a Public Limited Company

b. 2 or more persons, in case of a Private Limited Company

c. 1 person, in case of One Person Company (“OPC”)

by subscribing their names to a memorandum and complying with the requirements as mentioned under the Act.

Requirements under formation of an OPC

A. Memorandum

The memorandum of OPC shall indicate the name of other person (“Nominee”) nominated by the subscriber, who shall in the event of the death of the subscriber or his incapacity to contract shall become the member of the OPC.

B. Written Consent

At the time of incorporation of OPC, the written consent of the nominee shall also be filed with the Registrar.

C. Withdrawal of Consent

The Nominee may at any time withdraw his consent by giving a notice in writing to the member and the OPC.

The member shall nominate another person within 15 days of the receipt of the notice of withdrawal and shall send an intimation of such nomination in writing to the company, along with the written consent of such other person so nominated in Form No. INC.3.

The company shall file with Registrar, such notice of withdrawal, intimation of name of another person (Form No. INC.4) and written consent of such another person (Form No. INC.3) within 30 days of receipt of the notice of withdrawal.

D. Intimation of change of nominee by the member

The member of OPC may change the name of the nominee by giving a notice as prescribed under the law. The intimation of change in name of the nominee shall be made by the member to the company. The company shall intimate such change to the Registrar in Form No. INC.4 along with the written consent of the new nominee in Form No.INC.3.

E. Death of member

In case of cessation of the membership of the member of OPC, in the event of death or incapacity to contract, his nominee becomes the member of such OPC. Such new member shall nominate within 15 days of becoming a member, another person who shall in the event of his death or his incapacity to contract become the member of such company.The company shall file with the Registrar an intimation of such cessation and nomination in Form No INC.4 within 30 days of the change in membership and with the prior written consent of the person so nominated in Form No.INC.3.

Section 3A – Members severally liable in certain cases

When the number of members in a company falls below the prescribed limit (i.e 2 in case of a private limited company and 7 in case of a public limited company)  and the company carries on it’s  business for a period of more than 6 months, every person who is a member of the company during that time shall be severally liable for payment of whole debts of the company contracted during that time and can also be sued for.

However, it is pertinent to note that,  the members are made severally liable only when they are cognizant of the fact that the company was carrying on its business for more than 6 months while the number of members were reduced below the prescribed limited.

Does change in the name of the nominee amounts to alteration of memorandum?

A change in the name of the nominee shall not be deemed to be an alteration of the memorandum.

Unconventional Career Options for Law Students

The legal profession is one of the most lucrative industries in today’s job market.The diverse nature of the legal system have created numerous career options that serve a variety of core and non core legal functions. There are plenty of great careers that we may have not noticed if we look around, and here is a list of 7 underrated yet lucrative careers in the field of law –

  1. Legal Design Service Provider

The legal design service providers are professionals that devise methods of bridging the gaps between the lawyers and the common man.They provide complex information in a meaningful way and formulate the process of serving a law firm’s client in a better way.

2. Knowledge Management Professional

The Knowledge Management Professional are responsible for managing the database of the law firm. All the employees working at a law firm have an access to latest legal news, updates, opinions, research notes etc so that they spend less time in the basic research work.

3. Law Blogger

A legal blogger is a person who creates a platform for sharing his/her experiences at law school, professional legal journey, working of Indian legal system etc. It covers the aspects where there is an interface of law. Legal Bloggers aim to create awareness of the realities of the legal profession.

4. Legal Content creation

Content creation is an art. And that is why there is no clear path to becoming a content creator.The job of a Legal Content Creator is to create authentic content for the law firm’s website, that touches and affects every part of the internet presence, right from the rankings in the search engines to how well one can convert site visitors into clients.Legal Content writers engage in developing the social media presence of the law firm.

5. Online Legal Consultancy

Online legal consultancy is yet another form of freelancing legal service, that can be taken up by the legal professionals for creating their own niche in the field of law. It may include giving preliminary online advice on family matters, consumer disputes where people are not looking forward to file a case but might want to seek a legal advice.

6. Legal Document Editing Services

Legal Document Editing Service Providers are legal editors, who are experienced practicing lawyers that assess the legal documents to rectify even slightest of the factual errors, so that the documents are easy to understand and are graspable by everybody.

7. Mental Health Law Managers

The long working hours of a law firm, may have a toll on the health of the employees. However, now a days greater attention is paid on the mental health of the employees of an organisation. In many law firms, a team of legal professionals along with psychologist have started working in cohesion with one another to devise methods for creating a stress free working environment. A mental health law manager is a legal professional with knowledge of the psychology, who works for the mental well being of the employees.

One can’t deny the fact that, the field of law has a plethora of career options. The legal profession is continually changing and bringing new challenges. From lawyers, judges, and mediators to paralegals, secretaries, and consultants, the legal professional’s role is expanding and evolving to keep pace with the ever-changing legal system.

Post Annual General Meeting Compliance for a listed company

This article aims to acquaint the reader of the post annual general compliance of a listed company. It contains the check-sheet for work to be done by a Company after its Annual General Meeting (AGM).

Introduction

A very important constituent of the capital market is the “Stock Market”, where the securities are bought and sold for investment or speculation purposes. The securities that are listed on the stock exchange can only be traded in the stock market. Therefore, a listed company is a company whose shares are bought and sold at a particular stock exchange. It is company whose ownership is organized via shares that are intended to be freely traded on a stock exchange.

General Compliances to be made by a listed company after the conclusion of the Annual General Meeting

The Companies Act, 2013 requires a listed company to adhere to certain compliance after the conclusion of its Annual General Meeting (“AGM”). Such general compliances are listed as below :

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