Reuters blog archive
from Expert Zone:
(Any opinions expressed here are those of the author and not of Thomson Reuters)
With its overhaul of the 1956 Companies Act, the government aims to simplify its provisions, keep pace with global trends and make it easier to do business in the country.
But the proposed law’s implementation would depend on its integration with existing statutes and laws such as the Foreign Exchange Management Act (FEMA) and the Income Tax Act. More clarity is needed on certain issues.
Here's a look at some of the provisions of the Companies Bill:
The Companies Bill allows for the merger of an Indian and foreign companies, giving Indian companies the flexibility to participate in global M&A activity. The current Act allows inbound mergers that are tax neutral (subject to certain conditions) but does not allow tax-neutral outbound mergers. Similarly, FEMA provisions would have to be amended for outbound mergers.
Under the Income Tax Act, cross-border transactions between associated enterprises are subject to transfer pricing provisions, recently made applicable in a limited way for specified domestic transactions. The concept of transfer pricing has also been introduced in the Companies Bill, requiring the transaction to be on arm’s length basis else it would require board resolution and a special resolution from shareholders in case of companies having prescribed paid-up capital or transaction value.
from Financial Regulatory Forum:
By Tom Hals
WILMINGTON, Del., Oct 16 (Reuters) - Delaware will preserve its "symbiotic" relationship with the federal government on corporate law, even as Washington takes an activist role on American business, said the newest member of the state's corporate law court.
J. Travis Laster, who just started his 12-year term as vice chancellor on the country's premiere business court, told Reuters that Delaware will continue to take care of corporate regulation on a case-by-case basis while Washington sets disclosure or labor regulation.