Can an Advocate Pick Up Shares in Companies?
Dear all,
I am an Advocate enrolled at Bar Council of Delhi for last 5 years. I understand that the Bar Council Rules places restrictions on Advocates to engage in business activities.
My question relates to purchasing shares of companies. The questions are that as an Advocate can I:-
1. Purchase shares of a publicly company listed on Bombay Stock Exchange?
2. Purchase shares of a Private Ltd. company in which I am neither a DIRECTOR nor have any dealings with the management of the company?
Attention is drawn to the following restrictions of the Bar Council including Chapter II rule 47 and 48, and Chapter III rule 2, which say-
Chapter II
47. An advocate shall not personally engage in any business; but he may be a sleeping partner in a firm doing business provided that in the opinion of the appropriate State Bar Council, the nature of the business is not inconsistent with the dignity of the profession.
48. An advocate may be Director or Chairman of the Board of Directors of a Company with or without any ordinarily sitting fee, provided none of his duties are of an executive character. An advocate shall not be a Managing Director or a Secretary of any Company.
Chapter III
2. An advocate shall not enter into a partnership or any other arrangement for sharing remuneration with any person or legal practitioner who is not an advocate.
Looking forward to your reply. If there are other restrictions of the bar as above, please let me know.
Thanks in advance.
Regards,
KM Malhotra
2 Replies
if you really are a lawyer, then I think you should really revise companies act.
in hindi there is a saying “baal ki khaal nikalna”
Your interpretation is nothing but that.
please re-read the companies act and then if your doubt still persists, re-read again.
abhishek
Dear Abhishek,
Thanks a lot for your reply even though you did not answer my question.
My Hindi might not be as good as you, but, there is one saying that I can recall for your reply:
“NAACH NAA JAANE ANGAN TEDA”
The fact that I am asking such a question shows that I am a lawyer, and worried if any of my actions is in contravention of the Bar Council Rules.
My question is simple. As an Advocate, can I invest money and purchase share of a company limited by shares in light of the restrictions imposed on the Bar Council to practicing Advocates?
Attention is drawn to the following restrictions of the Bar Council including Chapter II rule 47 (Conditions to Right to Practice), which says:
“47. An advocate shall not personally engage in any business”
Of course, in most of the cases, the shares of a Pvt company limited by shares are purchased in return of investment into the company. My question is whether such an activity is in contravention of said rule 47?
Dear Abhishek - Request you to please share some light only if you know about the issue. Unnecessary distraction from the issue is not welcomed.
Thanks in advance.
KM Malhotra