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India Unleashed: A Legal Guide to Investing in India

01 June 2019
Energy

The Indian Government has set ambitious targets for renewable energy, yet must protect the existing portfolio and assure regulatory certainty.

01 June 2019
Succession Planning

Succession planning for safeguarding and optimal transitioning of wealth and control are emerging as a critical consideration for businesses in India, many of which are family owned/controlled and are characterized by significant promoter family stakes. While wealth preservation, ring fencing key assets and tax-optimized transfer to the next generation were the guiding features of such exercises earlier on, modern businesses look at corporate succession planning with the added lens of ensuring business continuity and operational competitiveness. In this context, promoters and companies need to reflect upon additional factors such as choice of successors (who may not necessarily be only from the family), composition for the board post-transition and rights of the promoters (including their successors), amongst others.

01 June 2019
Trade Law

Let us start with some statistics about India’s economy: (a) Starting from USD 452 billion in 1999, India’s GDP crossed USD 2.6 trillion by 2017 – a growth of almost 6 times1 during a period when global GDP increased by only 2.5 times; (b) Per capita income nearly trebled in the past two decades; and (c) Total exports from India (merchandise and services) have increased 8.73 per cent year-on-year in 2018-19 (up to February 2019) to reach USD 483.92 billion, while total imports have increased by 9.42 per cent year-on- year to USD 577.31 billion2.Increasing protectionism, the US-China trade dispute and uncertainty around Brexit have contributed to the lowest global trade volumes in 9 years.

01 June 2019
Due Diligence

The famous contract law principle ‘caveat emptor’ – Buyer Beware – is often used in commercial transactions involving M&A and other financial and strategic investment deals. Information asymmetry between a buyer and seller necessitates robust due diligence exercise on targets and promoters pre and post such transactions. While traditional methods of due diligences help in uncovering broader business, financial and legal risks, recent times of increased liability of directors, calls for transparency, and reporting requirements have magnified the relevance of micro-level due diligence.

01 June 2019
Insolvency

India has managed to significantly improve its ranking in World Bank’s ease of doing business report – from 130 in 2016 to 77. A major contributor to this is the enactment and implementation of a comprehensive insolvency resolution eco-system through the Insolvency and Bankruptcy Code, 2016 (IBC). Breaking the cumbersome, inefficient, subjective, debtor-in-possession model, the IBC ushered in a simple and modern framework which provides certainty of outcome, ensures value maximization for all stakeholders through a time bound process. IBC arguably has improved the credit culture in India.

01 June 2019
Private Equity

Most investors, whether private equity players or otherwise, prefer to have the protection of a liquidity preference clause in investment agreements to protect their investment in case of the happening of certain events.

01 June 2019
Mergers & Acquisitions

Before the establishment of National Company Law Tribunals (“NCLTs”) under the Companies Act, 2013 (“2013 Act”), schemes of arrangement – being court approved arrangements or compromises between a company(ies) and its (their) creditors or members, fell within the purview of the High Courts under Sections 391-394 of the Companies Act, 1956 (“1956 Act”).

06 April 2018
Competition Law

The Competition Appellate Tribunal (“COMPAT”) has been done away with and has been merged with the National Company Law Appellate Tribunal (“NCLAT”).

05 April 2018
Finance

If you were to look at the Indian finance landscape around the last five to seven years, you would find a very traditional bank-dominated market, where the Indian state banks and the public sector undertaking (PSU) banks were giving the majority of financing, including a lot of project financing.

30 March 2018
Insolvency

Prior to the Code, India did not have a consolidated statute governing incidents of insolvency and bankruptcy of various entities. For example, the provisions relating to the insolvency of corporations were scattered amongst laws as diverse as the Companies Act, 1956 (Companies Act), the Recovery of Debts due to Banks and Financial Institutions Act, 1993 (RDDB Act), the Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (SARFAESI Act) and the much-reviled Sick Industrial Companies (Special Provisions) Act, 1985 (SICA). Similarly, there were two statutes, namely, the Provincial Insolvency Act, 1920 and the Presidency Towns Insolvency Act, 1909 governing instances of individual bankruptcy.

27 March 2018
Private Equity

The economic, commercial and industrial scenario today is that which is dependent upon investment or what we may also categorize as fund raising. Investment, which is a driver for growth for a number of industries, may flow into an organization in a number of ways such as private equity funding, angel investments, seed money investments, etc. These investments may vary in nature and in amounts and are regulated as per the applicable laws and regulations.

16 March 2018
Data Protection

Data privacy is a burning issue, from the Aadhaar ID database to a series of recent government and judicial reports laying the groundwork for a much-overdue reform of Indian privacy regulations, which will affect a plethora of businesses.

25 July 2017
Tax

Yes, the Indian tax structure has all along been very complex and unpredictable owing to a host of factors, such as a multiplicity of taxes, divergent interpretations, the absence of a coherent administrative set-up coupled with unrealistic revenue targets, and a propensity to resort to amendments (including retrospective amendments), by successive governments. In this decade, for foreign investors, the “indirect transfer” of shares case of Vodafone symbolizes all that has been wrong with the Indian tax system. Despite winning at the Supreme Court, the Government in 2012 retrospectively amended the Income Tax Act, 1961 (“IT Act”) to overcome the Supreme Court ruling and to tax indirect transfers involving foreign companies/investors.

25 July 2017
Mergers & Acquisitions

Despite the progress, there are still quite a few structures which, though common abroad, are difficult to implement in India. A traditional leverage buy-out, which might otherwise seem fairly straightforward, is not permissible under the Indian legal regime. To make a leverage buy-out work, acquirers need to demonstrate an appetite for innovative structures.

25 July 2017
Private Equity

Traditionally, Indian companies have been a family run affair, with the promoter (founder) shareholders hesitant to lose control over the family business. As a corollary, private equity investments were also conventionally minority investments. But the growth of the Indian economy has given birth to a new generation of entrepreneurs - the executive-turned-entrepreneur as well as those joining the start-up band wagon.

25 July 2017
Employment Law

Common employment laws issues in India can be divided into two areas: the issues faced by employers and the ones faced by employees, though some of these issues are common to both. We have summarized key employment laws issues which are most common below.