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CS Executive · Capital Market and Securities Laws · Securities and Exchange Board of India

A student preparing a note on SEBI's legal character reads that the Board is established under the SEBI Act, 1992. Which description of SEBI's status under the Act is correct?

SEBI is a body corporate with perpetual succession and a common seal. It can acquire, hold and dispose of movable and immovable property, enter contracts, and sue or be sued in its own name, so it is a separate legal entity under Section 3(2).

  1. AA body corporate with perpetual succession and a common seal, able to hold property, contract, and sue or be sued in its own nameCorrect
  2. BAn unincorporated government department that must sue and be sued through the Central Government
  3. CA statutory body whose existence ends when its Chairman's term ends
  4. DA body corporate that may hold only movable property and cannot enter into contracts

Explanation

Section 3(2) makes the Board a body corporate with perpetual succession and a common seal. It can acquire, hold and dispose of movable and immovable property, contract, and sue or be sued by its own name. The other options deny one or more of these features, so they are wrong.

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