The new corporate law has been introduced by Indian parliament in the form of companies Act 2013. The new Act has brought significant changes in the corporate law environment of India. It has become pertinent for Indian and foreign companies to know appropriately and effectively about the new corporate regulatory regime. Few good corporate law blogs can be accessed here, here and here. Some of the useful topics covered by these blogs have been discussed below.
With the new legal framework, the corporate regulatory requirements in India have drastically changed. Even the e-forms have been proposed to be rolled out in a single phase from April 28, 2014. The compulsory transfer pricing audit based upon monetary limits has also been proposed to be dropped in the near future.
The multi national companies (MNCs) companies are also trying their level best to minimise tax disputes pertaining to transfer pricing in India by filing advance pricing agreement (APA) applications. Companies have also started re-looking their ownership stakes in India. For instance, the Vodafone Group has bought complete ownership claims in the Vodafone India Limited (VIL).
As per these blogs, the regulatory compliances under the Indian Companies Act 2013 have increased tremendously. Some techno legal compliance requirements have been prescribed by the Companies Act 2013 pertaining to notice of meetings, e-voting, requisitioned meeting, e-documents, etc.
The liabilities of directors under the Companies Act 2013 have also increased significantly. These include cyber law, cyber security, e-discovery, techno legal diligence, etc. Target Corporation is already facing litigations in various jurisdictions due to cyber law and cyber security due diligence lapses.
It is clear that Indian companies and MNCs would be required to comply with techno legal requirements of Companies Act 2013 and other applicable laws of India. The Companies Act 2013 has specifically made applicable other laws like Information technology Act 2000 to companies and their directors. This is a big challenge and for them as a failure to comply with these techno legal requirements would definitely result in litigations and prosecutions.