Professional Documents
Culture Documents
they sold shares worth Rs. 44,070 Crores, resulting in a net flow of
Rs. 16, 617 Crores. (2nd August, 2010 - TOI)
Court Watch – SC asks HCs to keep off debt recovery proceedings –
―interfere only when borrowers have exhausted all alternative
remedies: Apex court‖ (3rd August, 2010 – Economic Times)
Supreme Court has ordered mobile telecom operators to give their
revenue sharing agreements to CAG (3rd August, 2010 – TOI)
Bombay HC to resume hearing in Vodafone – IT matter – verdict to
impact past dealings & define Mergers and Acquisitions road map in
India (2nd August, 2010 – Economic Times)
Legislation of the week – LS passes bill to replace ULIP ordinance –
The Securities and Insurance Laws (Amendment) and Validation Bill
2010 all set to create a ―super regulator‖ (Read More) (3rd August,
2010 – TOI, Economic Times)
Others – GST all set to rollout from 1st April, 2011(Read More) (5th
August, 2010 – Economic Times)
Did You Know ?
―Bombay Stock Exchange (BSE) is the oldest stock exchange in Asia,
and the largest in South – Asia.‖
Rate Card -
Bank Rate – 6.0% 1 Euro – Rs. 61.0700
Law Focus
This week on Law focus we will discuss the Limited Liability
Partnership Act, 2008.
Overview of LLP
The Limited Liability Partnership Act, 2008 was enacted after much
discussion and debate. Limited Liability Partnership (LLP) is viewed
as an alternative corporate business vehicle that provides the benefits
but allows its members the flexibility of organising their internal
structure as a partnership based on mutually arrived agreements.
Salient Features
Body corporate and Legal entity separate from its partners –
perpetual succession – mutual rights and duties of partners similar to
partnership act – separate legal entity, hence liability of partners is
limited to only their agreed contribution in the LLP.
Comments
―In the background of the global economic trends which enable investment and
services o flow across borders, the growing role of services and knowledge
based enterprises and emerging international competitions it is necessary to
enable entities also to have the requisite choice in corporate organizations to
compete internationally on the level playing field.‖
…. Anagha I BSL
“The concept of designated partners to the LLP has been explained in Section 7
following with their responsibilities stated in Section 8 & 9. Section 7 states that
a LLP shall have at least two designated partners who are individuals of which
at least one shall be a resident of India.”
“The liability of a LLP will be meted out of the property of LLP. A partner will
not be personally liable directly or indirectly for an obligation of the LLP solely
by reason of being a partner of the LLP.”
“While you can convert from a firm or a company to an LLP, there are no
provisions for erring and deciding to reconvert back into a partnership or a
company. In such a case, the decision has to be well weighed realising that
there is no “u turn” available down the road.”
…. Shashank Mangal I BSL
Bone of Contention
The recent bickering among the regulators namely between the Securities
exchange board of India and the insurance regulatory and development
authority has caused a lot of panic amongst the investors and private life
insurance companies.
Government –
Date Sebi Irda Finance Ministry
Abolished entry loads for
August ‗09 mutual fund schemes
Issued show-cause notices
to some life insurers
asking why action should
not be taken against them
December for selling ULIPs without
‗09 its approval
Again questioned Insurers
about not seeking Sebi‘s
January permission over issuance
‗10 of Ulips
―ULIPs are broadly
similar to the mutual
funds, except that they are
required to segregate a
certain part of the
premium towards the life
February insurance of the plan
‗10 holder.‖
―Ulips globally are
managed by insurance
regulators, and under no
circumstance will we let
Ulips to be taken over by
March ‗10 Sebi.‖
Issued order to ban 14
private insurance
9-Apr- companies from
2010 issuing/servicing Ulips
6
1. Unit linked insurance plans majorly invested the collected premiums into
the securities market, and the securities market naturally fell under the
garb of SEBI.
3. The push for ULIP schemes arose because of a higher commission rate
which the agents earned over the mutual fund schemes.
In Furtherance:
Even before this dispute the government had setup the HLCC (high level co-
ordination committee) which supervised and furthered inter regulatory peace.
The chairman for this board was the RBI governor. However following this
dispute the Lok Sabha passed an act known as the Securities and Insurance
Laws (Amendment) and Validation Bill 2010.
Conclusion:
The dispute magnified beyond HLCC and the government had to intervene by
passing an ordinance and subsequently the act. In anticipation of such similar
circumstances the government has appointed Finance Minister as the chairman
of the committee and the RBI governor as the vice-chairman. The government
further pressed on ULIP schemes to be promoted as an insurance policy and not
solely as an investment vehicle
Further Reading –
Conceptualised and Edited
1. Difference between
by –
Endowment Scheme
and ULIP. Team Information Panel of
Corporate Law Cell.
2. The Securities and
Insurance Laws For further queries write to
(Amendment) and us at ilsccell.ip@gmail.com
Validation Bill 2010