Insider trading is prohibited and is considered an offence vide SEBI (Insider Trading) Regulations, 1992. The definitions of some of the important terms are given below : ‘Dealing in securities’ means an act of subscribing, buying, selling or agreeing to subscribe, buy, sell or deal in any securities by any person either as principal or agent. ‘Insider’ means any person who, is or was connected with the company or is deemed to have been connected with the company, and who is reasonably expected to have access to unpublished price sensitive information in respect of securities of a company, or who has received or has had access to such unpublished price sensitive information. A “connected person” means any person who- (i) is a director, as defined in clause (13) of section 2 of the Companies Act, 1956 of a company, or is deemed to be a director of that company by Continue reading
Business Law
Dishonour of Cheques – Section 138 of Negotiable Instruments Act
A paying banker is under a legal obligation to honour his customer’s mandate. He is bound to do so under his contractual relationship with his customer. A wrongful dishonour will have the worse effect on the banker. However, under the following circumstances, the payment of a cheque may be refused: Countermanding: Countermanding is the instruction given by the customer of a bank requesting the bank not to honour a particular cheque issued by him. When such an order is received, the banker must refuse to pay the cheque. Upon receipt of notice of death of a customer: When a banker receives written information from an authoritative source, regarding the death of a particular customer, he should not honour any cheque drawn by that deceased customer. Upon the receipt of notice of insolvency: Once a banker has knowledge of the insolvency of a customer he must refuse to pay cheques drawn Continue reading
About Sarbanes-Oxley Act of 2002
Public Company Accounting Reform and Investor Protection Act of 2002 commonly known as Sarbanes-Oxley Act or SOX Act was enacted by US Congress to handle concerned issues surrounding business management and financial reporting as a way to restore and maintain investor confidence in the US capital market grappling with corporate scandals and accounting irregularities. With the integrity of the market further compromised by the failures of Enron’s bankruptcy and WorldCom, the act considered as the most significant corporate regulatory reform since the Securities and Exchange Act of 1934, sought to curb the ongoing-spectacular corporate failures and scandals occurring in North America. The WorldCom’s failure was the last straw, prompting the speed passage of most drastic legislation to affect the accounting profession since 1933. The major purpose of this act is to provide reliable and accurate information to the investors. The formation of this act had to undergo a detailed process Continue reading
Securites and Exchange Board of India Act, 1992
Major part of the liberalisation process was the repeal of the Capital Issues (Control) Act, 1947, in May 1992. With this, Government’s control over issues of capital, pricing of the issues, fixing of premia and rates of interest on debentures etc. ceased, and the office which administered the Act was abolished: the market was allowed to allocate resources to competing uses. However, to ensure effective regulation of the market, Securites and Exchange Board of India Act, 1992 was enacted to establish SEBI with statutory powers for: (a) protecting the interests of investors in securities, (b) promoting the development of the securities market, and (c) regulating the securities market. Its regulatory jurisdiction extends over companies listed on Stock Exchanges and companies intending to get their securities listed on any recognized stock exchange in the issuance of securities and transfer of securities, in addition to all intermediaries and persons associated with securities Continue reading
Discharge of a Contract
When the rights and obligations arising out of a contract are extinguished, the contract is said to be discharged or terminated. In other words, discharge of a contract means termination of the relationship between the parties to a contract. The ways of discharging a contract can be discussed as:- i) Discharge of Contract By Performance: When a contract is duly performed by both the parties within the specified time and in the manner prescribed, the contract is said to have been performed and discharged. Performance may be: (a) Actual (b) Attempted. Actual Performance: When each party to a contract fulfils his obligation arising under the contract within the time and in the manner prescribed, it is called actual performance of the contract and the contract is discharged. Attempted Performance — When the promisor offers to perform his obligation under the contract, but is unable to do so because the Continue reading
Types of Fire Insurance Policies
Fire Insurance contract is an insurance policy where insurer agrees to make good the loss of the insured that occurs out of a fire accident that it was during a period that was specified. The contract of fire insurance contains the maximum sum that can be claimed by the insured. It is important to note that in this contract of insurance, only the loss is paid by the insurer to the insured but not the maximum amount specified in the contract made in between the insurer and the insured. The maximum assured sum is paid only when the loss is more than the specified amount according to the contract. The fire insurance policies are of different types and they were specified here under. Types of Fire Insurance Policies Specific Fire Insurance Policy: In this type of fire insurance policy, the loss is covered up to a specific amount. That specific Continue reading