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Historical development of company law
The document provides a historical overview of Indian company law, beginning with the Companies Act of 1850 and highlighting key amendments through to the Companies Act of 1956. It discusses the necessity of reform post-independence, leading to the formation of a committee to draft changes that ultimately resulted in the new act in 1956. The act aimed to protect shareholder rights and promote responsible business practices.
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Historical development of company law
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- 2. Brief History ofCompanyLaw The history of Indian company law began with the Companies act of 1850, modeled on British Companies act of 1844. Between 1850 and 1882, the Companies act was amended many times and the act of 1882 repealed all the previous laws and remained in force till 1912, though amended many times.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 1913 was based on the British Companies act of 1908.
- 3. Cont. Subsequent amendmentswere 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 15th January, 1937. After independence it was found that the company law should again be amended. Therefore The Companies Act, 1956 was passed and it came into force on 1st April 1956. This Act was also amended subsequently.
- 4. The CompanyLaw 1956 After the independence, it was found that the existing companies act should 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.
- 5. Cont. The centralgovernment brought a bill in parliament on 2nd 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.
- 6. Cont. On thebasis of the recommendations of the joint parliamentary committee, the parliament passed the new act in November, 1955 which received the presidents assents on 18th 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.
- 7. Main objectivesof theCompanyLaw 1956 To sustain trust & faith of Shareholders To protect & preserve rights of Share holders To make the drastic control over all the activities of company To make regulation of an effective Annual Meetings Investment of general public should be used for the development of society or social welfare