Lenders Law

Q1:  What is the new definition of a “Small Company”? Response:  A company is treated as a  small company  if: It is a  private company; Paid-up capital does not exceed  ₹10 crore; Turnover does not exceed  ₹100 crore. It is  not : a holding company; a subsidiary company; a Section 8 company; governed by any Special Act. Q2: From when do the revised limits apply? Response:  Eligibility shall be checked as on 31st March, 2026 and the benefits/ exemptions shall apply for the following financial year i.e. FY 2026-27 onwards  based on the MCA notification. Q3: If my company crosses ₹10 crore capital or ₹100 crore turnover in the middle of the year, does it immediately lose “small company” status? Response:  No. Eligibility is tested  only on 31st March . Your status for the current year remains unchanged. Q4: If my company falls below the thresholds during the year, does it im...

Ministry of Corporate Affairs, vide Gazette Notification no. G.S.R. 880(E) dated 1st December, 2025, expanded the “small company” bracket (₹10 Cr paid-up capital / ₹100 Cr turnover. With higher financial ceilings, a much larger segment of:  closely-held groups, family-run companies, promoter-driven private companies, now qualify for regulatory relaxations— provided they are not : holding companies, subsidiary companies, section 8 companies, governed by special Acts, public companies. Timing Matters: When Does “Small Company” Status Apply? Small company status is determined: As on the last date of the financial year (31 March); Applies to the immediately following financial year  — without any separate filing or approval requirement. . Mid-year restructuring or financial changes do not alter status immediately . One Subsidiary Can Kill Small Company Status — But Divestment Restores It If a company has even one subsidiary,  it is in...

Affidavits are among the most misunderstood documents in litigation and corporate filings. They are often signed casually—without realizing that an affidavit is not procedural paperwork but legal testimony in writing . As defined by the Oxford Advanced Learner’s Dictionary: An affidavit is “a written statement that you swear is true and that can be used as evidence in court.” Once you sign an affidavit, you step into the shoes of a witness. And witnesses are held accountable. The Law Governing Affidavits in India: The statutory framework for affidavits is not informal. It is embedded in law. The Code of Civil Procedure, 1908 governs affidavits through: Section 139 – Who can administer an affidavit- Order XIX – Affidavits as evidence- Only legally authorized persons (notary, magistrate, oath commissioner) can attest affidavits. Particularly important is  Order XIX Rule 3 CPC, which states that a ffidavits shall be confined to such facts as the deponent is able of his own knowledg...

The Insolvency and Bankruptcy Code (IBC) places a heavy responsibility on the Resolution Professional (RP) to ensure that only eligible Resolution Applicants (RAs) —and their connected persons —participate in a Corporate Insolvency Resolution Process (CIRP). With the recent IBBI Circular No. IBBI/CIRP/88/2025 dated 18 November 2025 , the scope, depth, and documentation requirements for such due diligence have become even more critical. The RP must directed to place a detailed note on section 29A compliance before the CoC when resolution plans are considered and ensure that deliberations and observations of the CoC are properly recorded in the minutes. This post distils the framework I personally follow as a legal practitioner, incorporating including digital tools like Tofler , ZaubaCorp , public-domain searches, SEBI jurisprudence on “persons acting in concert,” and a printable checklist. Understanding Section 29A and Who It Covers: Section 29A extends ineligibility not only t...

IBBI Valuation Framework – Current vs Proposed The Insolvency and Bankruptcy Board of India (IBBI) has released a Discussion Paper on Strengthening the Valuation Process under the IBC . The IBBI's proposed overhaul of valuation standards under the Insolvency and Bankruptcy Code seeks to eliminate inconsistencies, enhance transparency, and reduce subjectivity in valuation outcomes. Key reforms include introducing a unified valuation standard, redefining the appointment structure of valuers, and expanding valuation scope to intangible and synergy values. These reforms aim to strengthen market confidence, improve CoC decision-making, and bring valuation practices closer to global norms. However, proportionality remains essential—larger insolvencies require deeper analytical structures, while MSMEs should not be burdened with disproportionate compliance costs. Stakeholder feedback remains critical to fine-tuning these reforms. This blog analyses the changes suggested in the...

On 8 November 2025, the Securities and Exchange Board of India (SEBI) issued a strong cautionary advisory warning the public about the risks associated with Digital Gold/ E-Gold products offered on various digital platforms. This warning arrives at a time when fintech ecosystems are aggressively promoting digital gold through festive campaigns, ₹1 gold sales, jackpot offers, and even celebrity- driven, game show inspired advertisements . This widening gap between regulatory reality and advertising-driven perception demands a public conversation. 1. What SEBI Has Clarified: SEBI emphasizes that digital gold products: Not a security under the Securities Contracts Regulation Act (SCRA); Not a commodity derivative under the SEBI Act; Not an Electronic Gold Receipts (EGR) or Exchange Traded Funds (ETF) under relevant SEBI frameworks; Not issued by a government or regulated financial intermediary; SEBI has no jurisdiction over digital-gold issuers or platforms. This creates a regu...

The Hon'ble Supreme Court’s ruling in  EPC Constructions India Ltd. v. Matix Fertilizers and Chemicals Ltd.   (2025) clarifies that preference shares—however structured—remains part of a company's share capital, and cannot be regarded as "debt". Even if classified as “financial liability” under Ind AS 32, legal character under the Companies Act still governs enforceability. A cautionary tale for investors and creditors relying on redeemable or “put option” structures to secure repayment.  The Case in Brief In EPC Constructions (supra), the appellant had over ₹400 crores in receivables for project work. The appellant/ former operational creditor agreed to convert its dues into 8% Cumulative Redeemable Preference Shares (CRPS)—redeemable in three years. When the respondent/ debtor failed to redeem, the appellant (then in liquidation), through its liquidator, filed a Section 7 petition under the Insolvency and Bankruptcy Code (IBC), claiming default on redemption. Both ...

The Reserve Bank of India (RBI) has proposed the Master Direction – Internal Ombudsman for Regulated Entities, 2025 , to replace the 2023 framework . Issued under Section 35A of the Banking Regulation Act, 1949 and allied statutes, the new draft seeks to strengthen internal grievance redressal mechanisms and ensure speedy, meaningful resolution of customer complaints through a structured, independent review within each regulated entity (RE). This article compares the new draft with the 2023 Master Direction and highlights key changes. Topic Master Direction 2023 Draft Master Direction 2025 Appointment — IO eligibility IO: retired/serving GM-equivalent; min. 7 years relevant experience; not over 70; must not have been employed by the RE or related parties. Adds if serving, must relinquish prior post. Explicit permission ...