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Friday, September 28, 2012

TRADE MARK REGISTRATION IN INDIA

Trade Mark is the mark capable of distinguishing the goods manufactured by  one manufacturer or service provider from that of others. We need to have protection over our Trade Mark as it represents our organization to the world. We today are very brand conscious and trade mark is certainly very precious and significant if we wish to create brand. 

Benefits of Registration of Trademark

  1. Trademark provides nationwide protection to the businessman. 
  2. It ensures that the name of Business entity remains protected as others can not use it for their business. Registered Trademark acts as a constructive notice to all other persons that they shall be refrained from using the trademark as their own. 
  3. Once trademark is registered it prevents likelihood that any other party claims as its their trademark.
  4. Once the trademark is registered, it is visible on trademark portal @ www.ipindia.nic.in and also easily searched on the same by agents or attorney, so that they shall not proceed with the registration of same or similar trademark. 
  5. Registered trademark holder can sue any other person for infringement, if that person uses the trademark without consent of owner for his benefit.  
  6. Trademark is significant from the point of view of the layman as, it is very important that brands remain protected or else anyone will come up in the market and start his own product in the name of reputed brand and confuse the consumer.
  7. It also plays vital role as to protect creditworthiness of the brand created by a businessman by prolonged quality. If the protection is not there any person with substandard goods may hamper the good credentials of businessman. 

Section 27 of The Trademarks Act, 1999

No Action for infringement of unregistered trademark.  
  1. No person shall be entitled to institute any proceeding to prevent, or to recover damages for, the infringement of an unregistered trade mark.
  2. Nothing in this Act shall be deemed to affect rights of action against any person for passing off goods or services as the goods of another person or as services provided by another person, or the remedies in respect thereof.
Interpretation to section 27 of Trademarks Act, 1999 

Accordingly any person whose logo or mark is not registered, is not entitled to bring suit against any other person for infringement of his mark nor he can ask for any compensation for that same. However it recognizes the common law rights of the trade mark owner to take action against any person for passing off goods as the goods of another person or as services provided by another person or the remedies thereof.

Procedure for Registration of Trademark.

Following are the steps for registration of Trademark in India. 

  1. Soft Search: It is very important to take soft search of the logo or mark proposed to be registered. Previously Trademark authorities provided the facility for physical search by them on payment of Rs. 500/-, however after updation of Trademark portal, physical search facility is no longer available and applicant must make a soft search w.r.t. trademark proposed to be registered. 
  2. Preparation of Application: After search completed and on being satisfied that prima facie same or similar mark is not registered under same class, applicant can process ahead for registration. 
  3. The application has to be made in prescribed form. The forms should be filled up as per the formats provided under Trademark Rules and forms. 
  4. Along with application, fees has to be paid as prescribed by Trade mark authorities.  Currently its Rs. 3500/-
  5. After making application to the trademark authorities, scrutiny is done by registering authorities. If any incomplete information is given, same is notified to the applicant. 
  6. After acceptance of application we get the application number for future reference. 
  7. After that the Trademark is published in trademark journal.
  8. If at the time of publication of trademark in journal, no objection is received then trademark shall be processed and registered. 
  9. If any opposition is received on the trademark so published, then Registrar issues applicant notice of opposition. 
  10. On receipt of this opposition letter, applicant needs to file his reply for the same. If necessary Registrar issues order for hearing on the same. 
  11. After hearing the Registrar shall give his decision.
  12. If case is decided in favor of applicant, the Registrar shall issue Certificate of registration otherwise application for registration shall be rejected.   
Effect of Registration of Trademark

Once the trademark is registered the owner of the same gets absolute right w.r.t that trademark and no other person is allowed to copy or otherwise make use of same or similar trademark. The owner shall get the right to sue any person for infringement of the same or receive the compensation from the person infringing the trademark.    

Thursday, September 27, 2012

INDEPENDENT DIRECTOR - An Overview



INDEPENDENT DIRECTOR

Independent Director is that Non-Executive Director of the Company who does not have any material or pecuniary transaction with the Company, Directors, Promoters, senior managers, holding or subsidiary Company or associates apart from receiving managerial remuneration.

Independent Director under Clause 49 of Listing Agreement.

As per new circular, ‘independent director’ means non-executive director who :

  1. Apart from receiving director’s remuneration, does not have any material pecuniary relationships or transactions with the company, its promoters, its directors, its senior management or its holding company, its subsidiaries and associates which may affect independence of the director. 
  2. Is not related to promoters or persons occupying management positions at the board level or at one level below the board
  3. Has not been an executive of the company in the immediately preceding three financial years
  4. Is not a substantial shareholder of the company i.e. owning two percent or more of the block of voting shares.
  5. Is not a material supplier, service provider or customer or a lessor or lessee of the Company, which may affect independence of the Director.
  6. Is not a partner or an executive or was not partner or an executive during the preceding three years, of any of the following :

      (i) The statutory audit firm or the internal audit firm that is associated  
          with the company, and 
        
       (ii) The legal firm(s) and consulting firm(s) that have a material                
          association with the company

Appointment of Independent Director

  • The Board of directors of the company shall have an optimum combination of executive and non-executive directors with not less than fifty percent of the board of directors comprising of non-executive directors.
  • Where the Chairman of the Board is a non-executive director, at least one-third of the Board should comprise of independent directors and in case he is an executive director, at least half of the Board should comprise of independent directors.
Provided that where the non-executive Chairman is a promoter of the company or is related to any promoter or person occupying management positions at the Board level or at one level below the Board, at least one-half of the Board of the company shall consist of independent directors.

Role of Independent Directors

Independent Director plays a very vital role in the Company. He is placed with fiduciary duty of maintaining standard level of corporate governance in the Company and prevents non compliance. He is watchdog of the Company and works in risk management, corporate governance, improving credibility etc.
In case of listed Companies, it is mandatory to set up Audit Committee which should comprise of two third Independent Directors.        

Important functions of Independent Director:

Following are some of very important functions of Independent Directors in the Company. 

  1. Consideration and review of annual financial statements of the Company before it is placed before the Board for its finalization. Review of changes in application of accounting policies, major changes impacting Company’s position etc.  
  2. Assisting the Board by recommendation in matters of appointment, reappointment and in some cases removal of statutory Auditor of the Company.
  3. Consideration of financial reporting process. 
  4. Consideration of quarterly financial statements. 
  5. Consideration of Internal Audit process and make recommendations for improving the same. 
  6. Place before the Board findings about the fraud, material non-disclosures etc, came to the knowledge of Independent Director. 
  7. Consideration and analysis of reasons for the same. 
  8. Special Review relating to related party transactions, transactions between subsidiary-holding company transactions and investments made between them, internal control procedure weakness etc.
  9. At all the times he should act in good faith and impartially.

Conclusion:

In order to sum up we can say, Independent Directors are expected to play role of a torchlight for development and maintenance of Corporate Governance in a Company. For listed Company, he is statutorily a very important person. He is expected to act as scrutinizer, who will ensure adequate measurements placed for proper disclosures in financial reporting of the Company and maintenance of high standards of internal auditing.   

 
  

 



Wednesday, September 26, 2012

REQUIREMENTS FOR FORMATION OF NBFC IN INDIA


Requirements to be complied with and documents to be submitted to RBI by NBFCs for obtaining certificate and Registration from RBI
1.
Minimum NOF requirement Rs. 200 lakh.
2.
Application to be submitted in two separate sets tied up properly in two separate files.
3.
Annex II to be submitted duly signed by the director/Authorized signatory and certified by the statutory auditors.
4.
Annex III (directors’ profile) to be separately filled up for each director. Care should be taken to give details of bankers in respect of firms/companies/entities in which directors have substantial interest.
5.
In case the directors are associated or have substantial interest in other companies, indicate clearly the activity of the companies (whether NBFC or not).
6.
Board Resolution specifically approving the submission of the application and its contents and authorising signatory.
7.
Board Resolution to the effect that the company has not accepted any public deposit, in the past (specify period)/does not hold any public deposit as on the date and will not accept the same in future without the prior approval of Reserve Bank of India in writing.
8.
Board resolution stating that the company is not carrying on any NBFC activity/stopped NBFC activity and will not carry on/commence the same before getting registration from RBI.
9.
Auditors Certificate certifying that the company is/does not accept/is not holding Public Deposit.
10.
Auditors Certificate certifying that the company is not carrying on any NBFC activity.
11.
Net owned fund as on date.
12.
Certifying compliance with section 45S of Chapter IIIC of the RBI Act, 1934 in which director/s of the company has substantial interest.
13.
Details of changes in the Memorandum and Articles of Association duly certified.
14.
Last three years Audited balance sheet along with directors & auditors report.
15.
Details of clauses in the memorandum relating to financial business.
16.
Details of change in the management of the company during last financial year till date if any and reasons thereof.
17.
Details of acquisitions, mergers of other companies if any together with supporting documents.
18.
Details of group companies/associate concerns/subsidiaries/holding companies.
19.
Details of infusion of capital if any during last financial year together with the copy of return of allotment filed with Registrar of Companies.
20.
Details of the bank balances/bank accounts/complete postal address of the branch/bank, loan/credit facilities etc. availed.
21.
Business plan for next three years indicating market segment to be covered without any element of public deposits.
22.
Cash flow statement, asset/income pattern statement for next three years.
23.
Brief background note on the activities of the company during the last three years and the reasons for applying for NBFC registration.
24.
II(b) is the company engaged in any capital market activity? If so, whether there has been any non-compliance with SEBI Regulations? (Statement to be certified by Auditors).
25.
Whether any prohibitory order was issued in the past to the company or any other NBFC/RNBC with which the directors/promoters etc. were associated? If yes, details there of.
26.
Whether the company or any of its directors was/is involved in any criminal case, including under section 138(1) of the Negotiable Instruments Act? If yes, details thereof.
27.
Whether the company was granted any permission by ECD to function as Full-fledged Money Changers?
28.
Whether the company was/is authorised by ECD to accept deposits from NRIs.
29.
Whether “Fit and Proper” Norms for Directors have been fulfilled.