Nature and Coverage of the  New Companies Act

During the course of its deliberations the Committee considered the desirable scope and coverage of the Companies Act. Many views were expressed, including the view that administration of the legal framework in respect of certain specified companies, such as listed companies, should be de-linked from the Companies Act and entrusted to specialized regulating agencies, e.g., the capital market regulator. norms. Similarly, recent enactments in many countries cannot be seen in isolation to the judicial system and its associated processes in such countries. The impact of such legislation in terms of compliance costs imposed on corporates is yet another issue that would need to be addressed keeping in view the relevant environment.

Corporate issues will also require a quick resolution. The time taken in the existing framework needs to be reviewed. This is particularly so in the context of rehabilitation, liquidation and winding up. Mergers and amalgamations also need to be facilitated to take place through a speedier process. Through the Companies (Second Amendment) Act, 2002 the Government has envisaged setting up of the National Company Law Tribunal and the National Company Law Appellate Tribunal. We welcome this move. It is time the forum with specialization to deal with corporate issues, bringing together expertise from various disciplines, is established. We are informed that there are certain legal issues to be resolved before these institutions can be set up. We hope that this process is speedily concluded so that a single forum is available for an informed consideration of corporates issues.

Exchange control regulations:

The foreign exchange regulations have been liberalised over the years to facilitate the inflow and outflow of funds to and from India.  Specific approvals are required from the regulatory authorities for foreign exchange transactions/remittances.

These regulations in India are governed by the Foreign Exchange Management Act (‘FEMA’) and the Regulations thereunder. The apex body on these matters in India is the Reserve Bank of India (‘RBI’) which regulates the law and is responsible for all key approvals.

FEMA is an important legislation which impacts foreign nationals who are working in India and Indians who have gone outside India and/or want to invest outside India. It is important to be compliant with the foreign exchange regulations.

Key service offerings:

  • Advise on foreign exchange regulations in respect of assets acquired outside India before visiting India
  • Advise on setting up a liaison office and assistance in related periodic compliance for the liaison office
  • Advise in relation to letters seeking approval/permission from the foreign exchange authorities.
  • Advice in relation to investment in India by Indians who have settled abroad
  • Advice in relation to investment outside India by Indian residents.
  • Advise on the type of bank accounts that can be opened by a foreign national in India
  • Advise on whether a foreign national can invest in immovable properties, shares etc. in India
  • Advise on the procedure for remittance of salary outside India and other incomes like rent, interest etc. earned in India.
  • Advise on repatriation outside India of sales proceeds of shares, immovable properties, etc.