Commonly Asked Questions
While Filing Corporate Case.
1. Do shareholders have approval rights in a deal?
- Shareholders do have approval rights especially in mergers and acquisitions.
- They even have the rights to inspect the company records.
2. Are cross border transactions subject to special legal agreements?
- Apart from the set guideline by the SEBI regarding transactions and taxes applicable, special legal agreements do not serve as a requirement for cross border transactions.
3. What is the influence of government bodies on corporate governance?
The government plays a crucial role in regulating corporate governance by:
- New rules- Introduction of laws like the Companies Act, 2013, lay guidelines for the functioning and operations of the institution. It protects the rights of the shareholders and workers, regulates the functioning of the directors etc.
- Keeping a check- The Ministry of Corporate Affairs requires companies to file various forms under the companies act, failing to do so, penalties are induced. The intention to check whether the rules are being followed and implemented.
- Setting up regulators- Establishment of organizations like Securities and Exchange Board of India (SEBI) which looks after stock markets and protection of investors, and the Institute of Chartered Accountants of India (ICAI), which governs accounting rules for companies.
4. How is venture capital regulated by the Indian government?
- Venture capital funds in India are subject to regulation under the Securities and Exchange Board of India (Alternative Investment Funds) Regulations, 2012 ("AIF Regulations"). It is acknowledged as a Category I Alternative Investment Fund that functions as a middleman in the financial sector, providing cash to small businesses and developing start-ups with strong development prospects.
5. How do private equity firms exit from a company?
- IPOs, is the most common and known way by which private equity firms exit a company as the shares of the company are offered to the public, corporate acquisitions, which is when the company invested
in is bought by another company.
