The constitution of India has mentioned several laws and regulations to safeguard and regulate the companies operating in India. Amongst those the Company Act 1956 has underlined several provisions and laws for the smooth functioning of corporate bodies and companies. While incorporating a company in India one must follow the prescribed modalities mentioned under the Company Act 1956 and other related amendments.
The Company Act 1956
This principal Act aims at:
• Protection of companies and investors.
• Facilitating the growth and development of the company.
• Safeguarding the interest of creditors.
• Attainment of the socio-economic goals fixed by the government policies.
• Regulating company affairs to preserve public interest.
The Companies (Amendment) Bill, 2003
With the rising complexities of corporate world the principal Act needed certain amendments to suit with the economic liberalization process. As result The Companies (Amendment) Bill, 2003 was introduced to ease the rigidity lies in principal Act. This amendment emphasizes on:
• Reduction of share capital
• Transfer of securities.
• Procedural reforms etc.
Other Related Laws
Apart to The Company Act 1956, Indian Parliament has enacted several other laws to have control over the changing corporate world. The other provisions related to company affairs are also mentioned in the following Acts and laws such as
• The Company Secretaries Act, 1980
• The Competition Act 2002
• The Competition Act, 2002 No.12 of 2003
• The Monopolies and Restrictive Trade Practices Act, 1969
• The Partnership Act, 1932
• The SICK Industrial Companies (Special Provisions) Act, 1985
• The Sick Industrial Companies Act, 1985 etc.
Various Indian Company Acts provide through guidelines and provisions for safeguarding the interest of both the investors and the creditors. These Acts facilitate the corporate stakeholders to operate under one umbrella so that uniform code of conduct in company affairs can be drawn out. Various Company Acts empower the central government to regulate all segment of corporate world to attain the targeted socio- economic goals of the country. Finally the public interest gets more support from effective implementation of these laws into action.