Section 41 of CA 2013 : Section 41: Global Depository Receipt

Explanation using Example

Imagine a technology company based in India, "InnovTech Pvt. Ltd.", wants to attract foreign investments. To do this, they decide to reach out to investors in the United States. The board of directors convenes a general meeting where they propose the idea of issuing American Depository Receipts (ADRs), which are a type of depository receipts. This proposal is to be voted on by the shareholders.

At the general meeting, the shareholders discuss the potential benefits and risks of issuing ADRs. After a thorough discussion, a vote is taken, and the proposal is passed with the required majority. This successful vote is a special resolution, as it is a significant decision that will allow the company to raise capital from foreign markets.

Following the special resolution, "InnovTech Pvt. Ltd." complies with the necessary regulatory framework and issues the ADRs in the US market, thereby successfully entering the foreign capital market. This action is in line with Section 41 of The Companies Act, 2013, which allows them to issue depository receipts abroad after a special resolution is passed.