In India, strategic counseling and portfolio development are intertwined with a myriad of legal provisions. SimranLaw, a premier law firm in Chandigarh, delves into the complexity of these legal issues unraveling the intricacies from years of expertise and practice. This article aims to deepen readers’ understanding of these key legal provisions by discussing their relevance, citing case laws, judgments, and the role they play in shaping strategic decisions and portfolio development practices in India.
1. Securities and Exchange Board of India (SEBI) Regulations:
The SEBI (Investment Advisers) Regulations, 2013 is the central regulation that governs investment advisory activities in India. It provides a framework for strategic counseling, portfolio management, and investment advisory services. It mandates that all financial advisers must be registered with SEBI before providing such services. For instance, in Wealth Managers (India) Pvt. Ltd. v. SEBI (2016), the Securities Appellate Tribunal upheld that providing portfolio management services without registration from SEBI is a violation of its regulations.
2. Companies Act, 2013:
The Companies Act, 2013 plays a crucial role in terms of engagement in strategic counseling. It sets out the rights, responsibilities, and duties of a company’s directors, particularly regarding the development of policies and strategies of a company. In M/S Shriram EPC Limited vs Rioglass Solar Sa (2018), the National Company Law Appellate Tribunal held that board resolutions related to strategic matters are enforceable under the Companies Act.
3. Foreign Exchange Management Act, 1999 (FEMA):
FEMA guides the cross-border investment strategies and international portfolio development. It regulates inbound and outbound foreign investment activities which aids businesses seeking foreign investment or planning to invest overseas. In Louis Vuitton Malletier vs Mr. Najmul Hasan & Others (2009), the Delhi High Court elucidated the FEMA guidelines that foreign investment doesn’t necessarily equate to foreign control.
4. Insolvency and Bankruptcy Code, 2016 (IBC):
IBC shapes strategic counseling by explicitly defining the process for insolvency resolution and liquidation of corporate debtors, this has been substantiated in case law “Innoventive Industries Ltd vs ICICI Bank & Anr” where the Supreme Court stated that IBC represents a paradigm shift recognizing that resurrection of companies is the beating heart of bankruptcy law.
5. Income Tax Act, 1961:
Key provisions of this Act significantly impact decisions on strategic wealth management and tax-efficient portfolio development. The Vodafone International Holdings B.V. vs Union of India & Anr (2012) is a landmark case where the Supreme Court held that Indian tax authorities do not have territorial jurisdiction over offshore transactions.
6. Real Estate (Regulation and Development) Act, 2016 (RERA):
For businesses investing in real estate, RERA provides guidelines for project planning and execution. In Fortune Infra developers Private Limited vs Dharma Sheela Anand & Ors (2020), the Bombay High Court considered RERA provisions setting a finest precedent for portfolio developers engaged in real estate projects.
Understanding these key legal provisions governing strategic counseling and portfolio development can be complex and challenging yet essential for businesses operating in India. Expert guidance from seasoned legal practitioners like those at SimranLaw can help companies seamlessly navigate these legal intricacies, ensuring compliance while leveraging these provisions for strategic growth.