Company law

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MANU (Querist)
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22 September 2014 can any on tell me what is the meaning of to invest otherwise in trust securities the amount of compansation received by it as a result of any merger or amalgamation ..........sec 180 of company law

Ankur Garg

Ankur Garg (Expert)
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22 September 2014 There are certain Govt. Prescribed trust securities investment in which is exempt from the provisions of section 180. Exempt here means for investment in trust securities shareholders approval is not required and only board resolution is enough. Whereas investment otherwise than trust securities requires shareholders approval u/s 180.

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MANU

MANU (Querist)
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22 September 2014 Lekin trust security is exempte from such p
rovision

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Ankur Garg

Ankur Garg (Expert)
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22 September 2014 That is what I am saying. Trust securities are exempted by Govt from Companies Act provisions and companies can invest in them just by passing board resolution.

No need to take shareholder approval.

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MANU

MANU (Querist)
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22 September 2014 But why trust security is exempte from such p
rovision .....?is there any reason for that

MANU

MANU (Querist)
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22 September 2014 But why trust security is exempte from such p
rovision .....?is there any reason for that

Ankur Garg

Ankur Garg (Expert)
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22 September 2014 Yes there is a reason.

All these trust securities are issued by Govt. or Govt. companies and agencies. Reason behind exemption is to encourage investment by corporates in such securities so that good amount can be collected by Govt. and Corporates can earned good interest and tax exemptions.

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MANU

MANU (Querist)
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24 September 2014 Does it mean that u are taking about the investment in primary market

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