The Securities and Exchange Board of India, vide its Circular no. CIR/MRD/DP/07/2011 dated 16th June 2011 and SEBI/Cir/ISD/3/2011 dated 17th June 2011 respectively, issued the fresh norms for the following:
1. Change of name of Listed Companies; and 2. Shareholding of Promoters/ Promoters group in Demat mode A brief comparative analysis of the existing provisions and the new provisions for both the Circulars is given below: ANALYSIS OF SEBI NORMS FOR DEMAT HOLDING AND NAME CHANGE OF LISTED COMPANIES SHAREHOLDING OF PROMOTERS/ PROMOTERS GROUP IN DEMAT MODE Existing ProvisionsTo remain listed in normal segment of the Stock Exchange all listed companies were required to have atleast 50% of its Public Shareholding, to be in Demat mode. New NormsTo remain listed in normal segment of the stock exchange all listed companies will be required to dematerialize 100% of the Promoters and Promoter’s group Shareholding including group Shareholding including pledge/ usage as collateral. Implications• Till now, there was no mandatory requirement of Promoters’ holdings to be in Demat mode. • Now, in addition to • Now, in addition to 50% Public holding being in Demat mode, 100% of the Promoters’ holding should be held in Demat mode, including pledge/ usage as collateral. • This has to be complied with by the Quarter ended September 2011. • In case a Company fails to comply with the same, the trading of such securities shall take place in trade to trade segment. CHANGE OF NAME OF LISTED COMPANIES Existing Provisions A listed company seeking change of name shall comply with the condition that at least 50% of its total revenue in the preceding 1 year period should have been accounted for by the new activity suggested by new name. New NormsA listed company can change its name if it satisfies either of two criteria:- a. At least 50% of its total revenue in the preceding 1 year period should have been accounted for by the new activity suggested by new name; OR b. The amount invested in the new activity/ project (Fixed Assests + Advances + Work in progress) is at least 50% of the Assets of the Company. The Advances shall include only those extended to contractors and suppliers towards execution of project, specific to new activity as reflected in the new name. Implications• This new Clause will relieve the Companies, which are engaged in business activities, wherein the gestation period is usually longer and the revenue stream is often delayed. • As per the existing norms, a listed Company proposing a name change must make sure that atleast 50% of its total revenues in the preceding 1 year should have been accounted for from the new business activity. • Now, with promulgation of new Norms, the Companies will not be required to wait for the earnings from the new business activity for a name change. Now, the same can be proposed on the basis of their Investments in the new activity/ the Project. Stock Exchanges have been advised to make necessary amendments and implement the above Circulars |
Subscribe to:
Post Comments (Atom)
GST Not Leviable on Transfer of Leasehold Rights of MIDC Plots: SC Dismisses Revenue’s SLP
In a significant development, the Supreme Court has dismissed the Revenue’s Special Leave Petition (SLP) challenging a Bombay High Court (...
-
· Legal Framework: Section 171 of the Income Tax Act, 1961 provides the legal framework for the partition of a Hindu Undivided...
-
New utility for generation of Form 16A in pdf format provided by https://www.tdscpc.gov.in is very light and is sized only 8.43 MB while ...
-
1. Introduction Cross-border investment structures often employ intermediate holding companies in jurisdictions like the Cayman Islands. A c...
-
A new website launched for TDS related matters www.tdscpc.gov.in TRACES – T DS R econciliation A nalysis and C orrection E nabling S yste...
-
Issue before the Income-tax Appellate Tribunal (ITAT) Whether the phrase “paid up capital and general reserves” should be defined as “Ne...
-
Introduction Employee welfare is a cornerstone of corporate responsibility, and gratuity forms a critical part of the social security benefi...
-
Facts Saptarshi Ghosh (the tax payer) was a salaried employee of TCS Limited (employer), an Indian company. He was on deputation to the U...
-
Selling a property can trigger a significant tax liability in the form of capital gains tax. However, the Income-tax Act, 1961, allows you...
-
In the complex landscape of India’s Goods and Services Tax (GST), the tax treatment of non-compete fees has emerged as a critical area f...
-
The newly enacted Income Tax Act, 2025, marks a significant step toward simplification by consolidating multiple presumptive taxation sche...
No comments:
Post a Comment