SUB:SPECIAL PURPOSE VEHICLE-MEANING, SCOPE AND OPERATIONS.
You are kindly requested to give your input/ valued opinion on the following academic query-
A Public Limited company limited by shares, had been incorporated under the Companies Act 1956 as a Special Purpose Vehicle ( SPV)having main objective as dealing in infrastructure and logistics work.
The company was incorporated as Special Purpose Vehicle (SPV) as a precondition and on the directions of the Concessioning Authority dealing in infrastructure and logistics work.
However, interpretational difficulty is being faced in the interpretation of the word- SPECIAL PURPOSE VEHICLE as follows-
i.)What is the definition ,scope and operations of SPECIAL PURPOSE VEHICLE? It had not been defined under The Companies Act, 1956 or Companies Act, 2013.Further, it had not been defined anywhere in the Concession Agreement signed with the Concessioning Authority.
ii.) Can a company incorporated under the Companies Act as a SPECIAL PURPOSE VEHICLE undertake any other activity( ancillary activities as defined in the Memorandum and Articles of Association of the company) to augment its income apart from the Main objects of the company OR its activities are only limited to the main objective?
iii.) If the company wants to start any other business as per other objects in the Article and Memorandum of Association, is there any liability on directors?
A prompt reply to above will be highly appreciated.
regards,
abhatt
CAclubindia
