Issue Of Equity Shares With Differential Voting Rights

Gaurav Shanker And Nishtha Agarwal    |   

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In order to make the provisions of companies law more conducive for innovative technology companies and start-ups, the Ministry of Corporate Affairs (MCA) vide Notification dated 16th August, 2019 modified the rules under Companies (Share Capital and Debentures) Rules, 2014, through Companies (Share Capital and Debentures) Amendment Rules, 2019, pertaining to issue of equity shares with differential voting rights (DVRs). This move was initiated to enhance the control of promoters over the management of the company, provide flexibility on internal structuring of share capital of the company and to remove the cumbersome requirement of maintaining distributable profits consistently for three years. 

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