Code of conducts under Insolvency and Bankruptcy Board of India Regulations, 2016

bankruptcyeditInsolvency and Bankruptcy Board of India (Insolvency Professionals) Regulations, 2016

The Insolvency and Bankruptcy Board of India has issued the Notification on Insolvency and Bankruptcy Board of India. These Regulations shall come into force on 29thNovember, 2016.

The purpose of the Act is to build up a strong legal system related to the Bankruptcy and Insolvency.
This step opens a new opportunities of practice for professionals in the areas of Corporate and Individual Insolvency, Corporate Liquidation Process. 

Some Code of Conducts to be complied by Insolvency Professionals:

  1. Insolvency professionals must maintain integrity by being honest, straightforward, and forthright in all professional relationships.
  1. Insolvency professionals must not misrepresent any facts or situations and should refrain from being involved in any action that would bring disrepute to the profession.
  1. Insolvency professionals must act with objectivity in his professional dealings by ensuring that his decisions are made without the presence of any bias, conflict of interest, coercion, or undue influence of any party, whether directly connected to the insolvency proceedings or not.
  1. An insolvency professional appointed as an interim resolution professional, resolution professional, liquidator, or bankruptcy trustee should not himself acquire, directly or indirectly, any of the assets of the debtor, nor knowingly permit any relative to do so.
  1. An insolvency professional, or his relative must not accept gifts or hospitality which undermines or affects his independence as insolvency professional.

Know More:- Insolvency and Bankruptcy Board of India Regulations, 2016

Holding 100% Control over a company – Section 89 of the Companies Act, 2013

Companies Act, 2013, gives freedom to the Companies to do anything, which is legal and in the interest of stakeholders but with the approval of authority or by intimating authority in a manner as may be prescribed by the act.

In Companies Act, 2013, section 89 is the only section which gives a way to a person/company to hold 100% control over a company.Under section 89 we have 2 options to incorporate a company having full control over it by a single person:

1- OPC (One Person Company)
2- With the help of sec 89

In case of OPC only “PRIVATE COMPANY” can be registered by one person
But under Section 89 not only Private Company but also “PUBLIC COMPANY” can be registered by required number of members but ultimately controlled by single person.

The purpose of this section is as follow:-

1- To satisfy the requirement of minimum number of members (i.e. 2 in case of Pvt. Ltd. and 7 in case of Pub. Ltd. )
2- To make a wholly owned subsidiary company

Example for understanding to this section easily:

Mr. A wants to hold 100% shareholding in X Pvt. Ltd, but he can’t do so as he will have to take care the limit of minimum number of members, so in that case he will need at least one more person to fulfill minimum Requirement i.e. 2 (at least)
Now he can present a person say Mr. B, on his behalf whose name shall be presented on register of members but indirectly he will be the owner(beneficial owner) and will be controlling company.

In this case
Mr. B is Registered Owner
Mr. A is Beneficial Owner
X Pvt. Ltd. Is Company

Same example can also be taken for Public Company (where there must be at least 7 members).
In place of X Pvt. Ltd., any company can be there.

In this section responsibility arises on 3 persons namely:
1- Registered owner
2- Beneficial owner
3- Company

Intimation to Registrar:

Under this section Registered owner/ Beneficial owner/ Company is required to intimate to ROC after entering his name in register of members or change therein the declaration so filed.

1- Registered owner shall file with COMPANY, a declaration in form MGT-4 within 30 days of entering his name in register of members or change therein as the case may be.

2- Beneficial owner shall file with COMPANY, a declaration in form MGT-5 within 30 days of entering his name in register of members or change therein as the case may be.

3- Company Shall file with ROC, a return in form MGT-6 within 30 days of receiving such declaration.

Penalty as per Section 89(5) & Section 89(7):

1-Registered owner:
Fine may extend to Rs. 50,000 and if offence is continuing one with a further fine which may extend to Rs. 1,000 for every day. Here we can see that shareholder is also punishable under this section which doesn’t happen usually.

2-Beneficial owner:
Fine may extend to Rs. 50,000 and if offence is continuing one with a further fine which may extend to Rs. 1,000 for every day. We can see that shareholder is also punishable under this section which doesn’t happen generally.

3- Company and officers:
Fine not less than Rs. 5,00 but may extend to Rs. 1,000 and if offence is continuing one with a further fine which may extend to Rs. 1,000 for every day.

Note: Government companies are exempted from this section vide notification dated 5th June, 2015.

Disclaimer : This is an effort by Lexcomply.com to contribute towards improving compliance management regime. User is advised not to construe this service as legal opinion and is advisable to take a view of subject experts. 

How to Deal With Sexual Harassment at Work Place?

7 things you can do to handle a case of sexual harassment at the workplace

harrassementHandling sexual harassment at the workplace can be tricky business. At stake is not just the morale and the productivity of employees, but also the very reputation and growth of the company. Here are some things you should consider as an employer.

1. Assess the Complaint: Insist on a written complaint. Where the aggrieved woman is unable to make a complaint on account of her physical or mental incapacity or death or otherwise, her legal heir or any person on her behalf may make the complaint.

2. Reconciliation: If there is a miscommunication or the matter is of trivial nature, the mater should first be tried to be resolved with reconciliation.

3. Form an Internal Committee as soon as you can: Assess the date of incident and in case of a series of incidents, within a period of three months from the date of last incident. During the pendency of an inquiry, on a written request made by the aggrieved woman, the Internal Committee may recommend to the employer to –

(a) transfer the aggrieved woman or the respondent to any other workplace; or
(b) grant leave to the aggrieved woman up to a period of three months: or
(c) grant such other relief to the aggrieved woman as may be prescribed.
(d) the leave granted to the aggrieved woman under this section shall be in addition to the leave she would be otherwise entitled.

These recommendations shall be implemented by you as an employer.

4. Assess the defense of the accused person, statement of witness, camera recordings, call records if relevant. It must be ascertained whether or not the allegations are made to settle personal grudges.

5. If Respondent is found Guilty: Take action in accordance with the provisions of the service rules applicable. Where no such rules have been made, salary shall be deducted as appropriate to be paid to aggrieved or her legal heirs within 60 days. Such misconduct can also be considered a violation of service norms of company/workplace.

6. Punishment for false or malicious complaint and false evidence

Where the Internal Committee arrives at a conclusion that the allegation against the respondent is malicious, the aggrieved woman or any other person making the complaint has made the complaint knowing it to be false or the aggrieved woman or any other person making the complaint has produced any forged or misleading document, it may recommend to the employer or the District Officer, as the case may be, to take action against the woman or the person who has made the complaint.

7. An additional complaint can also me made Under section 354/376 IPC and all above proceedings shall not made public.

Companies Act Encyclopedia

encyclopedia

LexComply.com is pleased to announce launch of Act-Encyclopedia. Free access to all the custodians of compliances. Just click on the link: – Act Encyclopedia – LexComply to use the facility.

Ordinarily, a company operating in the Indian regulatory environment needs to comply with Central, State and Local legislation depending on the following:

  1. Business of the Company;
  2. Operational Process followed to do such business;
  3. Locations where such business is being carried on; and
  4. HR involved in the process.

For this it is essential that we articulate a list of applicable laws.

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Disclaimer: This is an effort by Lexcomply.com to contribute towards improving compliance management regime. User is advised not to construe this service as legal opinion and is advisable to take a view of subject experts.