Company Regulatory Legislations In India 4u2o4r

V In India, < < is the most important piece

of legislation that empowers the Central Government to regulate the formation, financing, functioning and winding up of companies. V It empowers the Central Government to inspect the books of s of a company, to direct special audit, to order investigation into the affairs of a company and to launch prosecution for violation of the Act. V These inspections are designed to find out whether the companies conduct their affairs in accordance with the provisions of the Act, whether any unfair practices prejudicial to the public interest are being resorted to by any company or a group of companies and to examine whether there is any mismanagement which may adversely affect any interest of the shareholders, creditors, employees and others.

V The Companies Act is istered by the Central

Government through the Ministry of Corporate Affairs and the Offices of Registrar of Companies, Official Liquidators, Public Trustee, Company Law Board, Director of Inspection, etc. The Registrar of Companies (ROC) controls the task of incorporation of new companies and the istration of running companies.

V %Companydz means a company formed and ed

under the Act or an existing company as defined in clause (ii):

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Ôor the purposes of this Act, a company shall subject to the provisions of sub-section (3), be deemed to be a subsidiary of another if, but only ifȄ V that other controls the composition of its Board of directors; or %that otherV Where the first-mentioned company is an existing company in respect of which the holders of preference shares issued before the commencement of this Act have the same voting rights in all respects as the holders of equity shares, exercises or controls more than half of the total voting power of such company; V

V where the first-mentioned company is any other

company, holds more than half in nominal value of its equity share capital; or V The first mentioned company is a subsidiary of any company which is that otherǯs subsidiary. V Ô Ô V The Company shall be ed under the Companies Act whether it is private or public.

V A minimum standard of good behavior and business honesty

in company promotion and management. V Due recognition of the legitimate interest of shareholders and creditors and of the duty of managements not to prejudice to jeopardize those interests. V Provision for greater and effective control over and voice in the management for shareholders. V Proper standard of ing and auditing.

V A fair and true disclosure of the affairs of companies in their

annual published balance sheet and profit and loss s. V Recognition of the rights of shareholders to receive reasonable information and facilities for exercising an intelligent judgment with reference to the management. V A ceiling on the share of profits payable to managements as remuneration for services rendered. V A check on their transactions where there was a possibility of conflict of duty and interest.

V A provision for investigation into the affairs of any

company managed in a manner oppressive to minority of the shareholders or prejudicial to the interest of the company as a whole. V Enforcement of the performance of their duties by those engaged in the management of public companies or of private companies which are subsidiaries of public companies by providing sanctions in the case of breach and subjecting the latter also to the more restrictive provisions of law applicable to public companies.

V The Companies Act, 1956 has been amended from

V V V V

time to time in response to the changing business environment. These amendments include:The Companies (Amendment) Act, 2000 { < < { < < { < <