F.Y.B.M.S ‘B’
GROUP NO.
♣ The history of Indian company law began with the Companies act of 1850, modelled on British Companies act of 1844. ♣ This principle of limited liability was applied in the new joint stock Companies act, 1857. ♣ Between 1850 and 1882, the Companies act was amended many times and the act of 1882 repealed all the previous laws and remained in force till 1912, though amended many times. ♣ The Indian Companies act of of 1913 was the result of concerted effort for a consolidated and comprehensive law and was based on the British Companies act of 1908. ♣ Subsequent amendments were in in 1914, 1915, 1920, 1926, 1930, 1932 and 1936.The amendment in 1936 was based on the lines of the British companies act of 1929 and became operative from 15 th January, 1937. ♣ After independence it was found that the company law should again be amended. ♣ Therefore The Companies Act, 1956 was passed and it
All company legislations in India are more or less a close re-enactment of the English acts, extensively adopting the very language. This was firstly on account of the British occupation of India, and secondly, their introduction into India both the British company and partnership firm modes of business by the acts of 1850 and 1932, respectively, on their familiar models, together with big chunks of their Anglo-Saxon jurisprudence jurisprud ence as well as English as the official language. Therefore, the English connection in our company law is obvious.
After the independence, it was found that the existing companies actshould be amended to suit the changed conditions in the country. In line with Cohen Committee of England, the central government appointed a 12-member company law committee in October 1950 under the chairmanship of Mr. C. H. Bhabha (known as Bhabha Committee) and submitted their report in April 1952. The central government brought a bill in parliament on 2 nd September, 1953. The parliament appointed a joint parliamentary committee in May 1954 to go into the recommendations of the Bhabha committee and to suggest any modifications or changes. On the basis of the recommendations of the joint parliamentary committee, the parliament passed the new act in November, 1955 which received the presidents assents on 18 th January, 1956, this act came into force with effect from April, 1956. It consists of 658 sections and 14 schedules. It also helps the growth of companies on healthy business principles.
The act of 1956 has been amended several times; (1)in 1960 introducing some restrictions on management of companies, managerial remuneration and private companies, (2) in 1962 introducing section 293-B by which it empowered the directors of companies to contribute to the national defense fund to meet emergency arised from Chinese aggression, (3)in 1963, for preventing abuses of powers by the company management (4) in 1965, changes were made to strengthen the provision relating to investigation of affairs of companies. Thereafter, minor amendments were made in 1966, 1967, 1969 and 1974. The amendment act 1977 introduced, amongst other things, a new sub-section (8) with sec. 58-A to empower the central government to exempt any company from repayment of deposits received from the public. The companies (amendment) act, 1985 brought about provision to contribute any amount upto 5 present of average net profits, during the three immediately preceding financial years, directly or indirectly to any political party or for any political purpose to
(a) To protect the interests of large number of shareholders, as there exists separation of ownership from management in a company. (b) To safeguard the interests of creditors. (c) To help the development of Companies in India on healthy lines, because corporate sector constitutes a very important segment of the economy. (d) To help the attainment of the ultimate ends of the social and economic policy of the Government. (e) To equip the Government with adequate powers to intervene in the affairs of a company in the public interest and as per the procedure prescribed by law so that the interest of all the stake-holders may be protected from unscrupulous
A new section.2( section.2(45) 45) defining company secretary was incerted to recognize “ company secretary in practices”. To transfer such judicial and quasi-judicial functions which are being exercised presently by the court or by the central government to company law board(independent company law board has been set up). To provide for intervention by the company law board against non-payment of public deposits by companies. For requiring companies to disclose reasons for refusal to register transfer of shares. For compulsory listening of all public issues with stock exchange(s). Measures for minimizing unnecessary burden and costs on the companies in respect of procedural matters such as, holding
Prohibits the issue of irredeemable shares. Revised the structure of managerial remuneration as per schedule XIII. Depreciation rates de-linked from income-tax and schedule XIV is made applicable for depreciation rates. Inter-corporate loans (sec.370) and inter-corporate investments (sec.372) have been amended significantly. In regard to the appointment of company secretary under sec.383A, the central government is empowered to prescribe the paid up share capital limits for the appointment of whole time secretary.
Facilitates for nomination Buy-back of Shares [S. 77-A] Sweat Equity Shares [S. 79-A] Investor Education and Protection Fund National Advisory Committee on Accounting Standards [S. 210-A] Inter-corporate loans and investments [S. 372-A]
