previlages to infra companies for raising capital under companies act, 2013
TRANSCRIPT
Privileges to Infra Companies for raising monies under Companies Act, 2013CS Phanindra DVK M.Com.,MBA, LLM, FCSPH: +91 [email protected] By
Generally, companies involved with Infrastructural Projects or Infrastructural Facilities require huge capital requirement for the business and have long gestation period for generating revenues / recovery of the investments.
Apart from the above, with the Government looking at Public-Private Partnership [PPP] model for developing infrastructural projects/facilities, Companies dealing with development of Infrastructural Projects or Infrastructural Facilities are to be given some exceptions/privileges, in the process of raising monies for the business and in the general Business activities.
Why Privileges or Exceptions ??www.sbsandco.com2
Ways in which money can be raisedwww.sbsandco.com3
The following provisions of the Companies Act, 2013 and the rules framed there under, contains the privileges for companies dealing with Infrastructural Facilities and Infrastructural Projects.
Section 55 (Preference Shares, Tenure as to redemption)Section 71 (Debentures, Tenure as to redemption)Section 186 (Loans made, Guarantee or Security provided)
Privilegeswww.sbsandco.com4
www.sbsandco.com5Privileges to Infra Companies
Subject to redemption of a minimum 10 % Preference shares from the 21st year onwards or earlier on proportionate basis at the option of Preference shareholdersSub-Section (1) being not to exceed 2 layers of investment companies
In addition to Infra Companies, companies permitted by Ministry or Department of the Central Government, RBI, National Housing Bank or any other Statutory Authority may issue Debentures for a period exceeding 10 years.
Now, we need to see what activities are carried on by the Company(ies), to qualify / fall under the ambit of Infrastructural Facilities or Infrastructural Projects.
To avoid any ambiguity as to interpretation of the scope of activities, a separate Schedule, detailing the activities which qualify to fall under Infrastructural Facilities or Infrastructural Projects are included in Schedule - VI to the Companies Act, 2013.
So, Infra Companies are not only those companies which deal in construction, but which deal with the activities/projects given in Schedule VI to the Companies Act, 2013. Let us see them in detail..Privileges to Infra Companieswww.sbsandco.com6
www.sbsandco.com7Infra Activities-1/7
www.sbsandco.com8Infra Activities-2/7
www.sbsandco.com9Infra Activities-3/7
www.sbsandco.com10Infra Activities-4/7
www.sbsandco.com11Infra Activities-5/7
www.sbsandco.com12Infra Activities-6/7
www.sbsandco.com13Infra Activities-7/7
From the above, it is can be clearly seen that a lot of companies dealing with Infrastructure Projects /Infrastructural activities will benefit from the said privileges/Exceptions under the Act.www.sbsandco.com14Finally.
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