KEY AREAS UNDER CORPORATE LAW
Our team of distinguished corporate lawyers in Chandigarh deal in the following areas of corporate law:
- Companies Law;
- Competition Law;
- Arbitration Law;
- Banking & Finance;
- Mergers and Acquisitions;
- Private Equity;
- Securities Law;
- Venture Capital;
- Intellectual Property Rights;
- Aviation Law;
- E-Commerce Laws;
- Foreign Exchange Laws;
- Insolvency and Bankruptcy;
- Real Estate Laws;
- Labour and Employment Laws;
- Cross Disciplinary Subject.
What is Corporate Law?
What is the general structure of commercial corporation law—or, as it is referred to in some jurisdictions, company law—across national jurisdictions?
In all jurisdictions, business companies have a comparable set of legal characteristics—and face a fundamentally similar set of legal issues.
Legal personality, limited liability, transferable shares, delegated management under a board structure, and investor ownership are the core legal characteristics of a commercial organization. These qualities are in response to the economic demands of a major modern enterprise. As a result, corporate law must, by necessity, provide for them everywhere. Almost all large-scale businesses use a legal structure that incorporates all five of the business corporation’s core qualities. Most small jointly-owned businesses use this corporate structure as well, however, they may deviate from one or more of the five basic criteria to meet their unique requirements.
As a result, one of company law’s primary functions is to provide businesses with a legal structure that embodies these five essential characteristics. Corporate law makes this form widely available and user-friendly, allowing entrepreneurs to trade simply through the corporate entity, lowering the costs of doing business. Of course, the amount of provisions devoted to defining the corporate form in a normal company act is likely to be a minor part of the overall statute. Nonetheless, these are the provisions that make up the legal foundation of company law that all jurisdictions have in common.
FIRM’s CORPORATE LAW PRACTICE
Our firm comprises of the most renowned Corporate Lawyers in Chandigarh who are competent & equipped to deal with all types of complex corporate litigations before NCLT, NCLAT, High Courts & the Supreme Court. Apart from litigation, our expert corporate lawyers give legal opinions on matters related to compliance issues, intellectual property rights (copyright, trademark & patent litigation), Income Tax and GST rules, Security Exchange Board of India (SEBI), National & International Arbitration, and Insolvency & Bankruptcy Code proceedings.
There is no one-size-fits-all method to corporate governance, and we at The Law Codes don’t prescribe or promote any one strategy, leaving it to the discretion of boards, management, and shareholders.
Our corporate lawyers in Chandigarh advise members, boards, and company leaders on a wide variety of corporate governance issues, including board structure, shareholder activism, and regulatory compliance. To remain ahead of compliance challenges, we bring clients up to date on changing trends and best practices.
What is a Company?
There are five essential structural elements of a commercial corporation:
- Legal Personality;
- Limited Liability;
- Transferable Shares;
- Shared Ownership;
- Centralized Management.
Almost all economically significant jurisdictions have a fundamental statute that allows for the formation of companies/firms that meet all of these criteria. These attributes have strong complementary properties for many firms, as this pattern illustrates. They make the company particularly appealing for arranging productive activity when they work together. These traits, however, create tensions and choices that give the agency problems that corporation law must handle a distinctly corporate flavor.
Lord Denning, while dealing with the liability of a company, in his inimitable style, has expressed that a company may in many ways be likened to a human body. It has a brain and nerve center which controls what it does. It also has hands that hold the tools and act in accordance with directions from the center. Some of the people in the company are mere servants and agents who are nothing more than hands to do the work and cannot be said to represent the mind or will. Others are directors and managers who represent the directing mind and will of the company, and control what it does. The state of mind of these managers is the state of mind of the company and is treated by the law as such. In certain cases, where the law requires personal fault as a condition of liability in tort, the fault of the manager will be the personal fault of the company.
Legislators have rapidly introduced new amendments and regulations related to Companies Law which create hindrances for the establishment of a new business and also impact the day to day working of the established business. It has often been experienced that the concerned authorities under Companies Act also do not understand these new regulations and evade their responsibility; the authorities keep on passing the responsibility from one department to the other which results in harassment to the entrepreneurs/businessmen apart from the monetary losses.
The Law Codes team of corporate lawyers in Chandigarh represents major companies, institutions, and individuals in virtually every industry, from tech start ups and life sciences companies. The corporate lawyers provide a platform to incorporate litigation strategies and insights about the dynamics of a company, dealing and ranging from manufacturing & trading units, telecom industry, corporate houses, pharmaceutical companies, media and entertainment houses, and financial institutions.
KEY CORPORATE FACTORS
Effective corporate governance necessitates a thorough understanding of the board’s, management’s, and shareholders’ distinct functions, as well as their interrelationships and connections with other company stakeholders. The Law Codes believe in describing the roles of these key corporate actors as:
- The board of directors is responsible for overseeing the management and business plans of the organization in order to achieve long-term value development. Some of the most significant tasks of the board include selecting a qualified chief executive officer (CEO), monitoring and evaluating the CEO’s performance, and directing the CEO succession planning process. The board of directors assign authority and responsibility for the company’s operations to the CEO, and through the CEO, to other top management. Effective directors are careful monitors of corporate operations, not managers. They keep a close eye on a company’s affairs, including crucial areas like strategy and risk, but they don’t manage — or micromanage — the company’s operations by doing or duplicating the CEO’s and senior management’s jobs. The line between oversight and management isn’t always clear, and in some cases (such as a crisis), the board may need to be more involved in operational affairs. In addition, the board has a direct function rather than an oversight role in some areas (such as the connection with the independent auditor and CEO remuneration).
- Management, led by the CEO, is in charge of developing, managing, and implementing the company’s strategy, which includes, but is not limited to, operating the company’s operations under the board’s supervision and keeping the board informed about the company’s activities. Strategic planning, risk management, and financial reporting are all responsibilities of management. A good management team focuses on implementing the company’s strategy over a long time horizon and avoids putting too much emphasis on short-term metrics.
- Shareholders purchase a corporation’s stock and receive financial benefits in return. Shareholders are not involved in the day-to-day operations of the company, but they do have the right to elect directors and obtain information relevant to investment and voting decisions. Shareholders should expect corporate boards and executives to serve as long-term stewards of their company’s investment. They should also expect the board and management to respond to issues and concerns that affect the company’s long-term worth and are of widespread interest to long-term shareholders. Corporations are for-profit businesses that aim to deliver long-term benefit to all of their owners. As a result, shareholders should not expect public firms in which they invest to be used as platforms for the promotion of personal agendas or general political or social reasons.
SOURCES OF CORPORATE LAW
Every jurisdiction with a well-developed market economy has at least one core statute that provides a basic corporate structure with the five qualities listed above and is specifically designed to allow the establishment of public corporations—that is, corporations with freely transferable shares.However, corporation law, as we understand it in this country, stretches much beyond the scope of this core act.
In India the history of the modern Companies Act dates back to the year 1600 when the East India Company was founded under a Royal Charter. The notion of limited liability was established for the first time in India through the Stock Companies Act in 1857. In 1866, a full-blown charter for the Companies was passed as the Companies Act.
There are various corporate laws in India of which some of the most important ones are listed down below:
- The Companies Act, 1956: An act to amend and consolidate the laws relating to companies. It was introduced in 1956.
- Companies Act, 1918: Ac act to take power to prohibit the alteration of articles of association which restricts foreign interests in certain companies but with the sanction of the Government.
- Companies Act, 2006: This act was added for further amendments in the Companies Act,1956. It states that no company shall appoint any individual as a Director if that individual does not have Director Identification Number (DIN) under section 266B.
- Competition Act of 2002: It promotes sustainable competition in market and prohibits any anti-competitive business tactics.
- Foreign Trade Act 1992: An act for the development and regulations of foreign trade by facilitating imports into, and augmenting exports from India.
- The Securities and Exchange Board of India Act, 1992: An act to provide for the establishment of a Board to protect the interests of investors in securities and to promote the development of, and to regulate, the securities market.
The Board of Directors’ and Management’s Most Important Responsibilities
The framework within which the board and management address their major tasks is provided by an effective corporate governance system. The business of a corporation is overseen by the board of directors. Certain crucial topics, including as the connection with the independent auditor and CEO compensation, are also under the board’s direct control. The oversight function of the board includes several responsibilities, including:
- Selecting the CEO;
- Setting the “tone at the top.” The board should set a “tone at the top” that demonstrates the company’s commitment to integrity and legal compliance. This tone lays the groundwork for a corporate culture that is communicated to personnel at all levels of the organization;
- Approving corporate strategy and monitoring the implementation of strategic plans;
- Setting the company’s risk appetite, reviewing and understanding the major risks, and overseeing the risk management processes;
- Focusing on the integrity and clarity of the company’s financial reporting and other disclosures about corporate performance. Allocating capital;
- Reviewing, understanding and overseeing annual operating plans and budgets.
- Reviewing the company’s plans for business resiliency;
- Nominating directors and committee members, and overseeing effective corporate governance.
- Overseeing the compliance program.
OUR CORPORATE LAWYERS IN CHANDIGARH DEAL IN THE THESE SECTORS:
- AUTOMOBILES INDUSTRY;
- FINANCIAL SERVICES;
- FMCG SECTOR;
The Law Codes team of top corporate lawyers in Chandigarh draws on collective experience within the public and private sectors to respond to clients’ most nuanced commercial needs. We integrate substantive legal expertise and comprehensive industry knowledge, to address client needs across industries, from aerospace and defense, to financial services and technology. We regularly try civil and criminal cases in courts and arbitration venues across the country.
Leading Case Law on the Subject:
Salomon v Salomon is the leading case which laid down the principle of the Corporate veil. It is a landmark judgment in UK Company Law case which firmly upheld the Doctrine of Corporate personality as a separate legal entity and thus the shareholders can’t be personally liable for the insolvency of the company. Thus it is the Landmark judgment which laid down the concepts about the formation and working of the company and about the Corporate Veil. This theory of Corporate entity provided the basic principle on which the whole law of Incorporation is based.
In the judgment of Salomon v Salomon, the separate legal identity of a company and its responsibilities and duties were discussed in detail which was further affirmed in case of Lee v Lee’s Air Farming Ltd., 1925.
Likewise the Supreme Court in Tata Engineering Locomotive Co. Ltd. v State of Bihar & Others case in 1964; affirmed that “the position of a corporation in law is equal to a natural person and has a legal entity of its own. The entity of the corporation is entirely separate from that of its shareholders. It bears its own names and has a seal of its own. Its assets are separate and distinct from those of its members. It can sue and be sued exclusively for its own purpose. The liability of the members of the shareholders is limited to the capital invested by them. The creditors of the members have no right to the assets of the corporation. The precedents aided in the establishment of key rules for the formation and proper operation of a corporation. As a result, the corporate veil serves as a safeguard for those who work for a firm in good faith. In fact, an Incorporation’s identification as a separate legal entity renders it liable for the conduct of its employees, and this veil shields the individual from being held personally liable for acts performed on behalf of the firm in the capacity of his job.
However, holding the company responsible all of the time for the wrongdoer’s deceptive or irresponsible activities is not just or fair, because the company cannot have any Mens rea to commit any wrongdoing because it is an artificial legal entity. Thus, in some circumstances, this veil must be raised in order to enforce the law in the interests of equity, a good conscience, and justice, without prejudice. This idea is known as ‘Lifting of Corporate Veil‘ and it is commonly used by courts in their judgments using various statutory sections of law. Courts have a versatile weapon of law in this way to achieve justice by penetrating the wall of incorporation to investigate the defective individual.
Take Legal Opinion From Our Corporate Lawyers in Chandigarh
Our legal advise, briefings and insights keep our clients up to date with the latest legal developments. We give legal opinions to our corporate clientele:
- Navigating difficult transactional issues for our clients.
- Advising both domestic and international clients on their transactions in India and globally.
- Representing clients on ground breaking transactions in the India.
PROCEEDINGS BEFORE NATIONAL COMPANY LAW TRIBUNAL
The Central Government has constituted National Company Law Tribunal (NCLT) under section 408 of the Companies Act, 2013 (18 of 2013) w.e.f. 01st June 2016. Initially in the first phase the Ministry of Corporate Affairs have set up eleven Benches with its Principal Bench at New Delhi. Subsequently more benches have been added. Our leading corporate lawyers in Chandigarh represent and appear for our clients before the National Company Law Tribunal in the following proceedings:
Proceedings Under Insolvency and Bankruptcy Act:
- Company Application (IBC);
- Company Petition (IBC);
- Insolvency and Bankruptcy (Pre-Packaged);
- Transfer Application;
- Interlocutory Application (IBC);
- Execution Petition;
- Transfer Petition (IBC);
- Cross Appeal (IBC);
- Company Appeal (IBC);
- Miscellaneous Application (IBC);
- Contempt Petition (IBC);
- Restoration Application (IBC);
- Review Application (IBC);
- Interlocutory Application (IBC);
- Rehabilitation Petition IB (IBC).
Proceedings Under Companies Act:
- Company Petition (Companies Act);
- Transfer Petition (Companies Act);
- CP(AA) Merger and Amalgamation (Companies Act);
- CA(A) Merger and Amalgamation (Companies Act);
- Company Application (Companies Act);
- Cross Appeal (Companies Act);
- Intervention Petition (Companies Act);
- Restoration Application (Companies Act);
- Review Application (Companies Act);
- Interlocutary Application (Companies Act).
Our Best Corporate Lawyers in Chandigarh at the Law Codes identify a company’s related issues/difficulties that are indeed key to the success of the companies/corporations/organizations/businesses and provide an efficacious remedy to our clients. Our team of top corporate lawyers represents the clients before NCLT, NCLAT, High Courts, and the Supreme Court. Our dedicated team of best corporate lawyers handles all the areas of Company Law. We have specialized services in the following areas:
- To represent the Company in legal proceedings;
- Framing internal rules and regulations of the Company;
- Guide Management on Regulatory and Compliance issues to ensure compliance with legal regulation;
- Protect the Company against the legal risks and management;
- Design and oversee the Company’s Policies;
- Prepare appropriate legal documents for Tribunal and Court proceedings;
- Corporate Social Responsibility;
- Related Party Transaction;
- Mergers and Acquisitions;
- Liquidation and Winding up of Companies;
- Insolvency and Bankruptcy proceedings.