This post analyses the permissibility of and key legal considerations for share-based benefits/ incentives, like ESOPs, RSUs, SARs, etc., that foreign companies offer to the employees of their Indian group companies. Introduction Companies have started using share-linked and share-based benefits as incentives to retain employees on a long-term basis, and it is beginning to be the most valuable component of employees’ compensation/ remuneration or CTC. Employee stock options (“ESOPs”) are among the most common forms of share-based benefits. An ESOP is essentially an option (and not an obligati ..read more

Introduction In the intricate ecosystem of global healthcare, the trust between doctors and patients forms the bedrock of ethical practice. A growing number of Indian healthcare service providers are integrating digital health technologies into their business development initiatives and operational framework, leading to an unsettling trend. Several such healthcare providers now deploy offline and online resources to set up and maintain incentive-driven patient referral networks through collaboration and partnership arrangements with healthcare institutions and practicing doctors. These arrange ..read more

Background In terms of the Securities and Exchange Board of India (Substantial Acquisition of Shares and Takeovers) Regulations, 2011 (“Takeover Regulations”), acquiring control and/or shares/voting rights of a listed company beyond the specified quantitative thresholds (i.e. initial acquisition of 25% or more of the voting rights; or subsequent acquisition by a person holding at least 25%, of more than the creeping acquisition limit of 5% voting rights in a financial year) can trigger an obligation to make an open offer to its shareholders (“Open Offer”). The Takeover Regulations contemplate ..read more

Introduction Intellectual Property Rights (IPR) have undergone significant evolution in the recent past, and the increasing number of filings for different types of IP rights across the world show the increasing commitment of countries to foster innovation, creativity, and their desire to sustain it. In today’s rapidly evolving landscape of innovation and technology, securing intellectual property rights through patents has become paramount for businesses and inventors. However, navigating the complex realm of patent law demands a thorough understanding of existing inventions and their legal i ..read more

Background The Supreme Court (“SC”) issued a notice[i] on a special leave petition filed by the Competition Commission of India (“CCI”) on March 1, 2024, against a Division Bench order of the Delhi High Court (“Delhi HC”) passed on July 13, 2023. The impugned order dealt with four appeals and a writ petition filed by Telefonaktiebolaget LM Ericsson (“Ericsson”), CCI, and Monsanto Holdings (P.) Ltd. (“Monsanto”) against previous Delhi HC judgements in Ericsson AB v. CCI (March 30, 2016)[ii], Ericsson AB v. CCI (December 14, 2015)[iii], Monsanto Holdings (P) Ltd. v. CCI (May 20, 2020)[iv], and ..read more

In part II of our series on establishing global capability centres (“GCCs”) in India,[1] we discuss the key issues that foreign companies face when strategising the structure and model for setting-up a GCC. Introduction The rapid expansion and growth of GCCs in India have compelled many MNCs to either scale up their existing centres or open one if there is none. It is crucial for a foreign entity (“Foreign Entity”) seeking to set up a GCC in India to conduct a structuring analysis and evaluate its position ahead of making a proposal. Given that it is very difficult (and possibly impractical ..read more

Context As the financial year 2023-24 draws to a close in a few days, it is the right time to reflect on the functions and responsibilities of the Audit Committee as well as address some “inconvenient” questions concerning their effectiveness vis-a-vis various listed and unlisted companies. Following the audit of year-end financial statements, the Audit Committee typically convene meetings, examine the statements, and confirm to the Board of Directors that such financial statements (FS) reflect the “true and fair view” of the state-of-affairs of the company as mandated by law. But can one be c ..read more

Background Companies, as the business grows, operate through their subsidiaries for various reasons such as flexibility in operation of different units, expansion in different geographies, etc. While subsidiary is an entity over which the wholly owned subsidiary has control, the Companies Act, 2013 (“CA 2013”) recognises subsidiary companies as a separate legal entity. In Vodafone International Holdings BV v. UOI, [1] the Supreme Court of India held that “A company is a separate legal persona and the fact that all its shares are owned by one person or by the parent company has nothing to ..read more

Introduction The practice of experimenting on animals has long been a focal point of ethical and regulatory debates. Juxtaposed against the concerns for animal welfare, this complex landscape tries to strike a balance between the pursuit of scientific progress to advance human knowledge and safeguard the rights and well-being of fellow planet inhabitants. Notwithstanding the surge in global commitment to reduce the number of animals used in experimentation and research activities, reports indicate that more than 100 million animals are used globally for experimentation on an annual basis. Furt ..read more

The Companies Act in India and jurisdictions all over the world have statutorily recognised subsidiaries as a separate legal entity. Section 2(87)[1] of the Companies Act, 2013 (“CA 2013”), defines “subsidiary company” or “subsidiary” as a company in which the holding company controls the composition of the Board of Directors; or exercises or controls more than one-half of the total voting power either on its own or together with one or more of its subsidiary companies. Subsidiaries are of different types, a vast majority of which are pure investment holding companies. However, there are many ..read more