The School will develop and impart training and instruction in corporate regulation in a comprehensive manner with an understanding of the related statutory, legal and regulatory framework. The School will undertake teaching in corporate and other relevant laws so as to contribute to greater understanding of corporate systems amongst government policy makers and administrators as well as regulators. It will encourage and facilitate the development of a framework that enables company managements and professionals to discharge their regulatory compliance responsibilities.
Company law & Corporate Regulations:
The Companies Act, 1956 provides the basic statutory framework for regulation of structure, governance and activities of a company in India but must be read along with other special Acts regulating various classes of companies such as the Securities Exchange Board of India (SEBI) Act, 1992, The Banking Regulation Act, The Insurance Regulatory Authority Act, etc. Corporate regulation is essential to ensure compliance with company law in the interest of all stakeholders. It enables company operations to be conducted in a transparent manner allowing investors to take informed decisions about the risks and rewards associated with their investments in a company while encouraging responsible Corporate Governance that addresses stakeholders’ concerns fairly. The Act is a combination of several codes requiring specialized knowledge and understanding for raising, increasing or writing off of capital by companies, their management and governance with protection of rights of minority shareholders, company restructuring, mergers and amalgamations, regulatory enforcement through inspections and investigations into the affairs of companies, insolvency issues including liquidation and winding up, etc.
Modernization of Corporate Law & Regulations in India:
Review and revision of corporate laws is an on-going process in response to changing economic and technological scenarios. A broad-based consultative process, followed by merit evaluation of the responses received by committees of experts drawn from diverse backgrounds is essential so that contemporary thinking and best practices are incorporated into evolving regulatory structures. This underscores a continuous need for research into legal and corporate governance practices, their relevance and effectiveness before they can be adopted for incorporation into law. In light of the contemporary business and economic environment, the Government has introduced the Companies Bill 2009 (earlier Companies Bill 2008) to enable comprehensive revision of the Companies Act 1956.
Limited Liability Partnerships:
Global economic trends are enabling investment and services to flow across borders along with emerging international competition. In view of the increasing role of the services sector in the Indian economy, the wide range of disciplines in which services can be offered and the growing number of professionals it was felt necessary to enable Indian entities to have the requisite choices in corporate organization to compete internationally on a level playing field. The Limited Liability Partnerships Act 2008 addresses these requirements by adding an additional corporate structure for doing business in India.
The Limited Liability Partnerships Act, 2008 has been enacted to fulfil the need for a new corporate form which will enable professionals to organize and conduct business in a comprehensive and efficient manner. LLPs are useful for small businesses which require a framework that provides flexibility of ownership and consequent liability. The LLP framework is quite suitable to the requirements of service, knowledge and technology based enterprises without imposing on them detailed legal and procedural requirements intended for large widely held companies.
Regulation of Professional Services and Institutions:
In the interests of stakeholders it is necessary that the affairs of companies are carried out in a credible, fair and lawful manner. In this context, professionals such as chartered accountants, cost accountants and company secretaries, who provide a range of services to corporate entities, have a major role to play. The need to ensure that corporate professionals discharge their responsibilities with due diligence and accountability is well recognized. Further, it is essential to make these professions competitive to take on the competition from global players in the international market.
Towards this end, the Chartered Accountants Act, 1949, the Cost and Works Accountant Act, 1959 and the Company Secretaries Act, 1980, were amended by the Parliament in 2008. The regulation of professionals will, however, need to continue further with development of independent, separate bodies for public accounting, oversight and standards as distinct from bodies engaged in imparting of education and qualification in the professional disciplines.
Partnerships Act, 1932
The Indian Partnership Act was passed in 1932 to define and amend the law relating to business partnerships. The Indian Partnership Act is a Central Act but it is administered by the State Governments who can also pass legislation on this issue. It should be noted that the Act is not applicable to the State of Jammu and Kashmir.
Societies Registration Act, 1860
A society can be formed for the promotion of literature, science or the fine arts or the diffusion of useful knowledge/political education or for charitable purposes. Section 20 of the principal Act specifies the purposes for which societies may be registered under the Act.
For a society registered under the Societies Registration Act, 1860 or under Section 25 of the Companies Act profit motive for personal use is not allowed. Whatever profit is made through the working of such a society is accountable and necessarily put back in the working of such a society.