Every company needs funds at some point in time. It can raise funds either through debt or equity. For increasing share capital, the Companies Act, 2013 (“2013 Act”) prescribes four methods: Public Issue, Rights Issue, Bonus Issue and Private Placement. A private placement is defined in the 2013 Act as any offer of securities or invitation to subscribe securities to a selected group of persons by a company through issue of a private placement offer letter. Due to the speed and fewer procedural requirements, private placement is a preferred method to raise funds. This article will provide a summary of the new provisions of private placement in the
2013 Act and reasons for introducing the changes.

The Companies Act, 2013 was notified on 29th August, 2013. Out of the 470 sections in the Act, 283 sections and their corresponding rules have been brought into force so far. After the provisions were brought into force, the various stakeholders had made representations to the government regarding the practical difficulties that certain sections posed. India currently ranks 142 out of 189 countries in the World Bank’s Ease of Doing Business ranking, which rates countries for the ease at which one can open, conduct and close down businesses. Prime Minister Narendra Modi has directed government officials to take steps to bring the country’s ranking to within 50 in two years.

Hence, on 17th December, 2014, the Lok Sabha passed the Companies (Amendment) Bill, 2014 to remove the “oppressive provisions” in the Companies Act, 2013 and to improve the ease of doing business and to improve the investment environment in India. These amendments will now be referred to as the Companies Amendment Act, 2014. This article shall provide a summary of such changes and its impact on the businesses in India.

Merger has been used for long as a tool for various purposes such as expansion of the business, to gain competitive advantage, for reduction of cost by economies of scale, to unlock values. Mergers are mainly of two types: Merger by absorption and merger by formation of a new company. So far, the mergers of companies in India are being governed by Section 391-396A of the Companies Act, 1956 (“CA 1956”). With the introduction of the Companies Act, 2013 (“CA 2013”), mergers will be governed by Chapter XV- Sections 230 to 240. However the Chapter XV of the Companies Act, 2013 has not been notified yet. But let us have a look at what will be the effect and changes in the governance of mergers once Chapter XV of the Companies Act, 2013 gets notified.

This concept of One Person Company (OPC) was first recommended by the expert committee of Dr. JJ Irani which was set up to take a comprehensive view on the changes necessary in the Companies Act, 1956 in context of the changing economic and business environment. It was later introduced in the new Companies Act, 2013.

OPC will give an opportunity to the people with ideas to start their own venture with an organized business structure but without considerable loss of time, energy and money on complex legal compliances. OPC will give the young businessman all benefits of a private limited company which categorically means they will have access to credits, bank loans, limited liability, legal protection for business, access to market etc all in the name of a separate legal entity.
An OPC is a private company may be formed by one member.

Class Action is a newly introduced concept in India through the Companies Act, 2013. This concept has already been existing in countries like the USA and the UK. The need for this section relating to class action was brought into notice at the time of Satyam Fraud Case in India in 2009, wherein the Chairman and Managing Directors and other managerial staff of the company had indulged in large scale fraud and misappropriation of company’s money, thereby causing a huge loss to the company and its shareholders. The American Shareholders of Satyam Computer Services were able to secure a settlement of USD 125 million through class action suits. However, there being no such law in India at the time of the scandal, the Indian shareholders had no recourse. Because of the Satyam scam, India has introduced class action suit in the new Companies Act, 2013 by means of Section 245 which is yet to be notified by the Ministry of Corporate Affairs.