Delisting under SEBI Delisting Regulations, 2021
Voluntary delisting via reverse book-building or fixed-price route; promoter must reach 90% post-delisting. Compulsory delisting by exchange for repeated non-compliance.
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CS
Company Secretary interview questions
96 questions available.
Difficulty
Slump Sale — meaning and tax treatment
Transfer of one or more undertakings for lump-sum consideration without itemised values. Taxed under §50B at LTCG / STCG rates depending on undertaking holding period.
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Conversion of company — private to public and vice versa
Private to public: SR + alteration of MoA + AoA; ROC approval. Public to private: SR + NCLT approval (post-2018 amendment) + compliance with min member requirements.
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Demerger — tax-neutral conditions under Section 2(19AA)
Transfer of undertaking on a going-concern basis with shares issued to demerged company's shareholders pro-rata; book values preserved; specific §2(19AA) conditions met.
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Buy-back vs Capital reduction — comparison
Buy-back: company purchases own shares using free reserves; tax favoured pre-2024. Capital reduction: returns capital, requires NCLT order. Both reduce capital base.
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Reduction of share capital under Section 66 — procedure and considerations
Special resolution → NCLT confirmation; auditor certificate on accounting treatment; reduce paid-up capital, cancel unpaid capital or return excess to shareholders.
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Employee Stock Option Plans (ESOPs) — regulatory and tax framework
Issued under Companies Act §62(1)(b) + SEBI SBEB Regulations. Taxed twice: perquisite on exercise (FMV − exercise price) and capital gains on sale.
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POSH Act, 2013 — applicability and compliance
Workplaces with 10+ employees must constitute Internal Committee. Inquiry within 90 days; annual report to District Officer; LCC at district level for unorganised sector.
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Tax implications of buy-back of shares
Company pays buy-back tax u/s 115QA @ 23.296%. Shareholders' receipts exempt u/s 10(34A). Post Finance Bill 2024 changes shift tax to shareholders for buybacks after 1 Oct 2024.
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Stamp duty implications on Scheme of Arrangement
NCLT order sanctioning scheme is an instrument liable to stamp duty per State Stamp Act; rates vary, with cap in some states. Applies on transferee company's state.
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Drag-along and Tag-along rights in shareholder agreements
Drag-along: majority can force minority to sell on same terms. Tag-along: minority can join majority's sale on same terms. Common in PE-backed companies.
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Earn-out clauses in share-purchase agreements
Portion of consideration contingent on post-closing performance (revenue, EBITDA, milestones); used to bridge valuation gaps and retain selling management.
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Valuation methods in M&A — DCF, comparable companies, precedent transactions
DCF (intrinsic), Comparable Companies (trading multiples), Precedent Transactions (M&A multiples), Net Asset Value, Capitalised Earnings. Used in combination for credible range.
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Difference between Friendly Takeover and Hostile Takeover
Friendly: with consent of target board; negotiated price, smooth integration. Hostile: bypassing the board via direct offer or proxy fight.
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Competition Commission (CCI) clearance for combinations
Notify CCI within 30 days of binding agreement if combination crosses asset / turnover thresholds. Standstill obligation until clearance.
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FEMA implications in cross-border M&A — inbound and outbound
Inbound: FDI routes apply; valuation as per DCF / SEBI norms. Outbound: ODI framework with 400% net-worth cap and Form FC. Cross-border mergers per RBI 2018 Regulations.
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Due diligence in M&A — types and key focus areas
Legal, financial, tax, commercial, HR, IT, environmental and secretarial — each builds a risk profile, identifies deal-breakers and informs warranties.
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Scheme of Arrangement / Compromise under Sections 230-232 of the Companies Act, 2013
Court-supervised compromise / arrangement between company and members/creditors. NCLT sanction needed; approved by 3/4 in value of each class.
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Foreign Contribution (Regulation) Act, 2010 — applicability and renewal
FCRA regulates receipt of foreign contributions by associations / NGOs / individuals. Registration via Form FC-3A; valid 5 years, renewable.
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Annual Return on Foreign Liabilities and Assets (FLA)
Filed on RBI FLAIR portal by Indian entities with FDI/ODI/foreign assets/liabilities by 15 July each year. Required even if no transactions during the year.
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