Legal & Industry Updates - February 2022
SPECIAL EVENTS
Impact of Union Budget on the Capital Market, February 4, 2022
The team at Ivy Law participated in a webinar on the “Impact of Union Budget on the Capital Market” organized by ASSOCHAM. The panel deliberated upon various aspects of the union budget and its impact on critical areas of growth, key areas of investment, foreign international investors, inflationary pressure, currency market, sovereign rating and the energy sector.
National Webinar on Corporate Criminal Liability, February 26, 2022
The team at Ivy Law participated in a webinar on the topic of "Corporate Criminal Liability (with special reference to white-collar crimes)” organized by LexCom. The session focused on the collective blindness i.e. the liability of a corporation even when a single individual is at fault, criminal liability of corporations for knowingly turning a blind eye to ongoing criminal activities, liability of corporations for criminal conspiracy amongst its employees or involving one employee and others not on the payroll of the corporation, and mergers, dissolutions and liabilities related to it.
LEGAL & INDUSTRY UPDATES
Limited Liability Partnership (Amendment) Rules, 2022 (source)
The Ministry of Corporate Affairs (“MCA”) has notified the Limited Liability Partnership (Amendment) Rules, 2022 (“LLP Amendment Rules”) on February 11, 2022. The LLP Amendment Rules will come into force from April 1, 2022. The LLP Amendment Rules have substituted Rule 19(1) of the Limited Liability Partnership Rules, 2009 (“LLP Rules 2009”) by virtue of which a registered trademark user (limited liability partnership (LLP) or a company or a proprietor) under the Trade Marks Act, 1999, having a name similar to or which too nearly resembles the name or new name of a LLP incorporated subsequently, may seek a direction from the Regional Director requiring the subsequently incorporated LLP to change its name. The LLP Amendment Rules have inserted a new Rule 19A (Allotment of new name to existing LLP under sub-section (3) of section 17 of the LLP Rules 2009). Pursuant to Rule 19A of the LLP Amendment Rules in case a LLP fails to change its name or new name, within a period of three months from the date of issue of such direction, the letters “ORDNC” (which is an abbreviation of the words Order of Regional Director Not Complied), the year of passing of the direction, the serial number and the existing LLPIN of the LLP shall become the new name of the LLP without any further act or deed by the LLP, and the Registrar shall accordingly make entry of the new name in the register of LLP and issue a fresh certificate of incorporation. However, the above name change shall not apply to an LLP in the event a notice for change of name application (Form 5) is pending for disposal at the expiry of three months from the date of issue of direction by Regional Director, unless the said application is subsequently rejected.
Provisions Under the Companies Act, 2013 to be Applicable to LLP’s (source)
The MCA vide its notification dated February 11, 2022 has notified the sections of the Companies Act, 2013 (“Act”) which shall apply to LLP’s, except where the context otherwise requires. Amongst the Sections of the Act, Sections 90 (Register of significant beneficial owners in a Company), Section 164 (Disqualifications for Appointment of Director), Section 165 (Number of Directorships), Section 167 (Vacation of Office of Director), Section 206(5)-(Power to Call for Information, Inspect Books and Conduct Inquiries), Section 207(3)-(Conduct of Inspection and Inquiry), Section 252 (Appeal to Tribunal for the Revival of Companies) and Section 439 (Offences to be Non-cognizable) of the Act will be applicable to LLP’s from the date of the notification’s publication in the official gazette.
Personal Data Protection Bill 2019 (source)
As reported by Economic Times, the current Personal Data Protection Bill, 2019 (“Original Bill”) may be completely replaced by a new bill. The intent behind replacing the Original Bill with the new bill, is that the Original Bill does not comprehensively addresses the needs of India’s changing technology landscape, hurting the country’s fledgling technology and startup ecosystem. The Original Bill attracted sustained criticism from several stakeholders, both local and global. Among their concerns were the inclusion of non-personal data and treating social media platforms as publishers. The Original Bill has been drafted by a panel led by retired Supreme Court Judge BN Srikrishna and was reviewed by a Joint Committee of Parliament (JCP) which submitted its final recommendations and a revised draft bill, only in November 2021. As per the JCP’s draft bill, the government can only tweak the clauses to some extent but the provisions cannot be changed completely, thus as a better option considered is to introduce a new bill all together aligning it with the current times.
Proposed Amendments to SEBI Regulations Regarding Separation of Role of Chairperson and MD/CEO (source)
The Securities Exchange Board of India (SEBI), vide its board meeting dated February 15, 2022, passed a resolution not to retain the provisions requiring top 500 listed entities to ensure that the Chairperson of the board shall be a non-executive director and who is not related to the Managing Director or the Chief Executive Officer as per the definition of the term “relative” defined under the Act. This provision was incorporated in the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 as amended in May 2018 and is scheduled to come into effect by April 01, 2022 for top 500 listed companies. As the revised deadline is less than two months away the unsatisfactory level of compliance with respect to this corporate governance reform, various representations received, constraints posed by the prevailing pandemic situation and with a view to enable the companies to plan for a smoother transition, SEBI in its board meeting has waived the above stated requirement to be a mandatory requirement and instead be applicable on a voluntary basis.
Plastic Waste Management (Amendment) Rules, 2022 (source)
The Ministry of Environment, Forest and Climate Change through a notification dated February 16, 2022 has notified the Plastic Waste Management (Amendment) Rules, 2022 (“PWM Amendment Rules”). The PWM Amendment Rules provide a new Schedule II (Rule 9) in the Plastic Waste Management Rules, 2016 pursuant to which the Guidelines on Extended Producer Responsibility for Plastic Packaging (“Guidelines”) have been stipulated. The Guidelines will come into force with immediate effect. Producer of plastic packaging; importer of all imported plastic packaging and / or plastic packaging of imported products; brand owners including online platforms/marketplaces and supermarkets/retail chains other than those, which are micro and small enterprises as per the criteria of Ministry of Micro, Small and Medium Enterprises, Government of India; (iv) plastic waste processors (“Entities”) are covered under the extended producer responsibility (the responsibility of a producer for the environmentally sound management of the product until the end of its life) obligations and provisions of the Guidelines. The Guidelines have further classified plastic packaging categories into four different categories. The Entities cannot carry any business without registration obtained through the online centralized portal developed by Central Pollution Control Board (CPCB) and cannot deal with any entity not registered through the on-line centralized portal developed by CPCB. Amongst others, environmental compensation will be levied based upon polluter pays principle, with respect to nonfulfillment of extended producer responsibility targets by Entities for the purpose of protecting and improving the quality of the environment and preventing, controlling and abating environment pollution.
Disclaimer: The updates provided in this document is not a legal opinion and does not claim to capture all legal developments related to the subject matter stated herein. It is advisable to seek legal advice for accurate applicability, prior to relying on the updates for any legal matter.