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Corporate Amicus: June 2014

To improve corporate governance, the new Companies Act, 2013 mandates a number of Board committees for specified companies for various purposes like audit, nomination and remuneration, Corporate Social Responsibility (CSR) and stakeholders’ relationship. The basis, structure and functions of these committees are analysed in the article included in this issue of Corporate Amicus. The author observes that the role of these committees seem to be largely recommendatory with the final decision making power being vested in the Board of Directors.

The Indian Government has delegated certain powers to Registrar of Companies (ROC) and the Regional Directors relating to those like refusal of undesirable names, registration of not-for-profit companies, alteration of memorandum, etc. The relevant notifications are summarized in this issue. Another issue clarified by the Ministry of Corporate Affairs and which is included in this issue is that of appointment and qualifications of independent directors and clarification on ‘pecuniary relationship’ as provided in Section 146 of the Companies Act, 2013.

Under ‘Ratio decidendi’, readers can go through the summary on the order of the Supreme Court of India in which it has refused to accept the proposition that whenever a contract is alleged to be void ab-initio, the courts exercising jurisdiction under Sections 8 and 11 of the Arbitration and Conciliation Act, 1996 are rendered powerless to refer the disputes to arbitration. According to the Apex Court, all matters including the issue as to whether the main contract was void or voidable can be referred to arbitration.

An important judgment of Bombay High Court holding that the Company Law Board (CLB) is not empowered to decide on right to shares and decree suits for specific performance as well as order rectification of register, is discussed in this ‘Corporate Amicus’. A report on upholding of constitutional validity of the SEBI (Stock Exchanges and Clearing Corporations) Regulations by the Allahabad High Court is also included in this issue.

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