Tag Archives: LexCounsel

ILN Today Post

Directors’ general duties under the Companies Act 2013

A note outlining the general duties of directors set out in section 166 in chapter XI of the Companies Act 2013 (“2013 Act”). All references to sections are to sections of the 2013 Act. Section 166 in chapter XI came into force on 1 April 2014. This note covers duties owed by a director, in his capacity as director, to the company and does not cover other duties under the 2013 Act.

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ILN Today Post

LexCounsel Celebrates 10 Years

The founding members of, and our team of professionals at LexCounsel are proud to announce that LexCounsel has completed ten years dedicated to excellence in professional legal services. As we celebrate this milestone, we remember the clients who have, and continue to repose trust and confidence in us. You have all been part of the journey to grow and build LexCounsel into the leading and reputable law firm that it is today. We thank you all.

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ILN Today Post

Appointment of Directors under The Companies Act, 2013

  • Every company is now required to have at least 1 (one) director who has stayed in India for a total period of not less than 182 (one hundred eighty two) days in the previous calendar year in terms of the recently notified The Companies Act, 2013 (“CA13”). A company can have a maximum of 15 (fifteen) directors, and the limit may be increased by way of a special resolution, without needing the Central Government’s approval.
  • CA13 has increased the number of directorships that a person can simultaneously hold, from 15 (fifteen) to 20 (twenty), out of which a person cannot be a director of more than 10 (ten) public companies. However, for purposes of computing the aforesaid limits:
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ILN Today Post

Legal Tangles of Terminating an Employee

Reorganization and consolidation, economic slump and business needs sometimes require companies to take the hard decision of retrenching or terminating its employees. But most companies treat the termination process of all employees alike with disruptive consequences subsequently.

Indian laws classify employees in “workmen” and “non-workmen” categories. The classification of an employee as a workman or not assumes significance as, from a legal standpoint, terminating the services of a “workman” category employee is significantly more complicated as compared to terminating the services of a “non-workman” category employee. Also, a workman is provided various protective remedies under law and is entitled to certain statutory benefits which a non-workman may not be entitled to (depending on the terms of his employment). Accordingly, a “non-workman” category employee can usually be terminated on the basis of the terms of his employment contract (also known as a hire and fire rule). However, termination of a workman requires more compliances, adherence to processes and payment of retrenchment compensation to the terminated employee. It is therefore important for the employer to assess the category of the ‘employee’ that it intends to retrench.

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ILN Today Post

Legal Position concerning Telemedicine in India

The World Health Organization (“WHO”) defines Telemedicine as “The delivery of healthcare services, where distance is a critical factor, by all healthcare professionals using information and communication technologies, for the exchange of valid information for diagnosis, treatment and prevention of disease and injuries, research and evaluation, and for the continuing education of healthcare providers, all in the interests of advancing the health of individuals and their communities”.

Despite the concept being recognized and defined by WHO and its spreading influence over the past decade, there is no legislation which singularly deals with the practice of Telemedicine in India.

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RBI’s clarification on Establishment of Liaison Office/Branch Office/Project Office in India by Foreign Entities

Presently, in terms of the Foreign Exchange Management (Establishment in India of Branch or Office or other Place of Business) Regulations, 2000, no entity or person, being a citizen of Pakistan, Bangladesh, Sri Lanka, Afghanistan, Iran or China is allowed to establish in India, a branch office or a liaison office or a project office or any other place of business by whatever name called, without the prior permission of the RBI.

However, the RBI vide its A.P. (DIR Series) Circular No.93 dated January 15, 2014, has also added Hong King and Macau to the above list to control and regulate indirect entry of residents of China through Hong King and Macau.

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ILN Today Post

Appointment and Powers of Auditors

The recently enacted Companies Act, 2013 (yet to be notified) has imposed new requirements with regard to appointment of auditors and exercise of powers and compliances by the auditors. Some of the new requirements include:

Ø Tenure of appointment: 5 (five) years, subject to ratification at every annual general meeting.

Ø Existing auditors to continue tenure if no auditor appointment in annual general meeting.

Ø The Audit Committee, if any, of the company will make recommendations for appointment of auditors.

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ILN Today Post

Exclusivity Rights Come with a Price

Prior to diving into the franchise pool for that perfect chunk of a franchise, make sure whether your franchise territory is exclusive or non-exclusive? If it’s exclusive then same brand’s franchise in the given territory won’t let you affect your sales and if it’s non-exclusive then one has to be extra vigilant as the same brand’s franchisee can become a hindrance in fetching revenues. Read on about the pros and cons of the same…More…

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ILN Today Post

STRUCTURAL DOMINANCE OF PUBLIC SECTOR UNDERTAKINGS (“PSUs”)/NATIONAL OIL COMPANIES (“NOCs”)

India’s oil and gas sectors are structurally characterized by the dominance of vertically integrated monopolies – present in both upstream and downstream operations – mostly owned and operated by the public sector. NOCs – primarily, Oil and Natural Gas Corporation Limited (“ONGC”) and Oil India Limited (“OIL”) – together account for about 85% of crude oil exploration and production (“E&P”) and 76% of the natural gas production[1].

Similar to E&P, the refining segment is also dominated by NOCs and their subsidiaries; accounting for about (74-56%) of India’s total refining capacity. There are a total of 22 refineries in India, of which 17 are owned by NOCs, 2 by joint venture companies and only 3 by the private sector[2].

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Free Medicines for All

The GoI is planning to distribute free medicines across India through Government hospitals as also making such medicines available through Government stores at a nominal price.

The GoI model is inspired by the “Medicines Supply Corporation’ established in the State of Tamil Nadu in India, which procures generic medicines in bulk at almost 1/20th of the market price, and supplies them to the in-house patients in the Government hospitals. The Central Government is planning to set-up a similar ‘Central Procurement Agency’ (“CAP”) to procure generic medicines in bulk and at cheaper rates, to be distributed across India in cooperation with the state governments. The CPA will also be responsible for specifying uniform standards for procurement of the medicines, and to monitor the procurement process.

This ambitious initiative of the GoI is expected to take a couple of years of pre-implementation planning.

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