The issue of bonus shares is a corporate action wherein a company distributes additional shares to its existing shareholders without receiving any additional payment. Bonus shares are issued in proportion to the existing shareholding, and they are typically allotted to shareholders free of charge. The issuance of bonus shares is governed by the Companies Act, […]
An Information Memorandum (IM) is a comprehensive document prepared by a company or its financial advisors to provide detailed information about the business, its operations, financial performance, and prospects. It is often used in various financial transactions such as mergers and acquisitions, private placements, and initial public offerings (IPOs). The purpose of an Information Memorandum […]
Employee Stock Option Scheme (ESOP) is a popular and widely used mechanism by companies to attract, retain, and motivate employees by providing them with an ownership stake in the company. ESOPs are regulated by the Securities and Exchange Board of India (SEBI) and are governed by the SEBI (Share Based Employee Benefits) Regulations, 2014. Regulatory […]
Book building is a process used in capital markets for price discovery and efficient allocation of securities during an initial public offering (IPO) or other securities issuance. The Companies Act of 2013 in India, along with the Securities and Exchange Board of India (SEBI) regulations, governs the procedure of book building. Let’s elaborate on the […]
Prospectus is a critical document that provides essential information about a company and its securities to potential investors. Let’s elaborate on the concepts of Prospectus, Abridged Prospectus, and Red-Herring Prospectus: 1. Prospectus (Section 2(70)): 2. Abridged Prospectus (Section 2(1)): 3. Red-Herring Prospectus (Section 32): Understanding these documents is crucial for investors and companies involved in […]
The doctrine of constructive notice and indoor management are legal principles that guide the interactions and transactions involving a company. These doctrines help establish a balance between the interests of the company and the protection of third parties. Let’s elaborate on each of these doctrines: 1. Doctrine of Constructive Notice: Definition: The Doctrine of Constructive […]
The Articles of Association (AOA) is a document that sets out the rules and regulations for the internal management and administration of a company. It complements the Memorandum of Association (MOA) and together they form the constitution of a company. Here’s an elaboration on the Articles of Association with reference to the Companies Act of […]
The Memorandum of Association (MOA) is a crucial document that outlines the fundamental details and objectives of a company. It is one of the key documents required for the incorporation of a company in India under the Companies Act of 2013. Here’s an elaboration on the Memorandum of Association with reference to the Companies Act […]
The formation of a company involves several steps, including the role of promoters, their legal position, and the concept of pre-incorporation contracts and provisional contracts. Let’s elaborate on these aspects with reference to the Companies Act of 2013 in India. Promoters and Their Legal Position: Pre-Incorporation Contracts: Provisional Contracts: In summary, promoters play a crucial […]
A producer company is a unique type of business organization in India, specifically designed to cater to the needs of farmers and producers engaged in agricultural and related activities. The concept of producer companies was introduced to empower farmers, improve their bargaining power, and enhance their socio-economic status. Here is an in-depth look at the […]