Employee Stock Option Plans (ESOPs) are an effective tool to align employee interests with long-term shareholder value. Under the Trust Route, the company establishes a trust to acquire shares—either from the secondary market or through fresh issue—and subsequently transfers them to employees upon exercise of vested options. This article explains the step-by-step procedure followed by […]
A bonus issue is a method by which a company issues additional shares to its existing shareholders without any consideration. It involves capitalising the company’s free reserves, securities premium, or capital redemption reserve account, thereby converting undistributed profits into paid-up share capital. For example, if A Limited declares a 1:1 bonus issue, a shareholder holding […]
In the modern corporate landscape, timely decision-making is often essential to maintain business continuity. However, convening a full board meeting for every operational decision is not always practical. Recognizing this, the Companies Act, 2013 provides a mechanism for boards to take decisions through resolutions passed by circulation, enabling directors to express assent or dissent without […]
Declaring a dividend in a listed company is not merely a financial decision — it is a regulated corporate action that requires careful coordination among the finance, management, and compliance teams. The process must strictly adhere to the provisions of the Companies Act, 2013, the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (LODR), and […]
Legal Provisions Under Section 123 of the Companies Act, 2013, read with Rule 3 of the Companies (Declaration and Payment of Dividend) Rules, 2014, a company may declare dividend out of accumulated profits earned in previous years and transferred to free reserves, even if there is no profit or the company has incurred a loss […]
The role of the Chief Financial Officer (CFO) in a company is pivotal, overseeing financial management, statutory compliance, strategic planning, and corporate governance. A common query among corporates and professionals is whether a CFO can simultaneously hold the position of a Director in the same company. The legal framework under the Companies Act, 2013, and […]
Holding an Annual General Meeting (AGM) is one of the most important statutory compliances under the Companies Act, 2013. It provides shareholders with an opportunity to review the company’s performance, approve financial statements, declare dividends, and appoint directors and auditors. However, there may be circumstances where companies find it difficult to convene the AGM within […]
AB Consulting Limited decided to convert into a Limited Liability Partnership (LLP) for several strategic reasons. The company had been experiencing losses in its business, highlighting the need for operational restructuring and more efficient management of resources. Additionally, the increasing compliance burden of operating as an unlisted public company—including mandatory board meetings, audits, and multiple […]
Mr. A and Ms. B, two ambitious professionals, began their journey by offering consultancy services through a small setup. As their business grew and their ambitions expanded, they decided to formalize their operations by incorporating a Private Limited Company under the name AB Consulting Services Private Limited. The primary reason for incorporation was their belief […]
As a director, it’s crucial to understand the responsibilities you have towards regulatory compliance, especially when it comes to the Registrar of Companies (RoC). The RoC plays a key role in overseeing company filings, ensuring compliance with the Companies Act, 2013, and safeguarding the integrity of business practices in India. For directors, understanding the filing […]
