PRESENTATION ON INDIAN LEGAL SYSTEM. A PRESENTATION BY. INDIA – A GENERAL OVERVIEW. Total Area – 3,287,263 sq km. INDIA IN GENERAL…GEOGRAPHY. Distance from North to South - 3,214 km. Distance from East to West 2,933 km. No. of States - 28 No. of UT - 7. Major Languages - 10.
A PRESENTATION BY
India has a separate Law on Arbitration
It follows the UNCITRAL Model of Arbitration.
Arbitration Award is Final & binding on all parties.
Cannot be appealed before the Court, unless there is any point of Law.
If agreement contains Arbitration Clause, and any party moves the Court, the other party should point to Court about the Arbitration Clause and ask the Court to refer parties to Arbitration.
With the Securities and Exchange Board of India (SEBI) as the Apex Body.
Owners hold Shares;
Each Shareholders gets a right to vote based on the number of shares that he holds. One Share One Vote;
Management by a Board of Directors;
Directors play a Trusteeship Role vis-à-vis the shareholders;
Powers of Directors are governed by the provisions of the Companies Act, 1956.
Minimum 2 Shareholders. Maximum- No limit
Minimum THREE Directors
Maximum TWELVE Directors
Shares freely transferable.
The maximum tenure of the instrument is 20 years. Can be redeemed at a Premium.
The holders have no voting rights unless the agreed dividend is not paid.
While fixing the dividend rate care should be taken to ensure that there is sufficient profits retained in the business for ploughing back.
A Type of Equity Share which can be so structured that the a higher dividend is offered to be paid with lesser voting rights. For Eg: 10 Equity Shares have 1 Vote, but get 1% more dividend than the normal equity share.
Certain Legal Issues to be addressed, with regard to issue of such instrument by a New Entity.
Debentures are a debt instrument.
Can be issued with an option to convert into Shares – Equity / Preference.
They should be secured by mortgage of any immovable property of the Company.
The interest rate is to be pre-determined.
Banks / FI’s will not construe this as Owners’ Funds.