Evolution & History of Company Law in India

Evolution & History of Company Law in India

The earliest business associations in England were the "Merchant Guilds". Some of the merchant Associations or guilds who have regulated the companies.

(i) A Royal Charter established the East India Company in the year 1600.

(ii) In England the Joint Stock Companies Act was passed for the first time in 1844.

(iii) In the year 1850, taking the English Joint Stock Companies Act 1844 as a base, a provision was made for registration of joint stock companies in India.

(iv) The Joint Stock Companies Act was passed in India by introducing the concept of limited liability in the year 1857.

(v) In 1913, the Indian Companies Act of 1913 was passed. The Act introduce the institution of private companies in the corporate sector in India. After Independence. Based on the recommendation of the Shri.H.C.Baba committee in 1950 and the provisions of the English Companies Act 1948, the Companies Act 1956 was introduced in the parliament.

The Companies Act 1956 came into force on 1st April, 1956. The main objectives of the Company Law 1956 are:

(i) To sustain trust and faith of Shareholders

(ii) To protect and preserve the rights of Share holders

(iii) To have drastic control over all the activities of company

(iv) To make regulation of an effective Annual Meeting,

(v) The investment of general public should be used for the development of society or social welfare activities.

The Companies Act 1956 has been amended from time to time. From 2006 to 2009 some important Changes was made.

(i) The Company Law Board (CLB) has been abolished and National Company Law Tribunal (NCLT) is formed.

(ii) The rehabilitation of sick companies will be undertaken by the NCLT and not by the Board for Industrial & Financial Reconstruction (BIFR).

(iii) Earlier the BIFR was entrusted with the rehabilitation of sick companies as the matter came under the jurisdiction of the Sick Industrial Companies Act 1985 (SICA) but now the Sick Industrial Companies Repeal Act 2003 has replaced SICA and the work of revival and rehabilitation has been entrusted to NCLT.

Again the Companies Act has been amended in the year 2013 and has introduced several new concepts and definitions.