Over the past 75 years since India gained independence, corporate law in India has undergone significant evolution and changes. The Companies Act was first introduced in 1956 but was replaced by the Companies Act of 2013 which focused on higher professional accountability and investor protection. Major changes occurred after India's liberalization of trade in 1991, opening the economy up to foreign investment and competition. This led to transitioning corporate documentation and registration online. Securities and Exchange Board of India was also established in 1992 to regulate the stock market and bring it up to global standards. More recently, the Insolvency and Bankruptcy Code was introduced in 2016 to deal with rising corporate defaults and non-performing loans. Overall, these changes have helped transform India's corporate system
Over the past 75 years since India gained independence, corporate law in India has undergone significant evolution and changes. The Companies Act was first introduced in 1956 but was replaced by the Companies Act of 2013 which focused on higher professional accountability and investor protection. Major changes occurred after India's liberalization of trade in 1991, opening the economy up to foreign investment and competition. This led to transitioning corporate documentation and registration online. Securities and Exchange Board of India was also established in 1992 to regulate the stock market and bring it up to global standards. More recently, the Insolvency and Bankruptcy Code was introduced in 2016 to deal with rising corporate defaults and non-performing loans. Overall, these changes have helped transform India's corporate system
Over the past 75 years since India gained independence, corporate law in India has undergone significant evolution and changes. The Companies Act was first introduced in 1956 but was replaced by the Companies Act of 2013 which focused on higher professional accountability and investor protection. Major changes occurred after India's liberalization of trade in 1991, opening the economy up to foreign investment and competition. This led to transitioning corporate documentation and registration online. Securities and Exchange Board of India was also established in 1992 to regulate the stock market and bring it up to global standards. More recently, the Insolvency and Bankruptcy Code was introduced in 2016 to deal with rising corporate defaults and non-performing loans. Overall, these changes have helped transform India's corporate system
Over the past 75 years since India gained independence, corporate law in India has undergone significant evolution and changes. The Companies Act was first introduced in 1956 but was replaced by the Companies Act of 2013 which focused on higher professional accountability and investor protection. Major changes occurred after India's liberalization of trade in 1991, opening the economy up to foreign investment and competition. This led to transitioning corporate documentation and registration online. Securities and Exchange Board of India was also established in 1992 to regulate the stock market and bring it up to global standards. More recently, the Insolvency and Bankruptcy Code was introduced in 2016 to deal with rising corporate defaults and non-performing loans. Overall, these changes have helped transform India's corporate system
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75 years of Evolution in Corporate Law
There is a saying that change is the only constant in this world. The same holds true for a massive evolution brought in the field of Corporate Law and Governance in the past 75 years of Independence. With the ‘Azaadi ka Amrit Mahotsav’ being celebrated with pomp and show all over India, let us have a look at the major changes introduced in the Corporate Legal System over the past 75 years. To start with, the Companies Act was introduced in 1956 for regulating the operations and functioning of companies in the post-independence era. However, with several changes taking place in the Indian business environment and with a rising need to curb the unethical practices of Companies, it had to be replaced by the Companies Act, 2013. The new act called for higher professional accountability and also focused on investor protection which was hardly given any importance in the previous act. However, it shouldn’t stop here. There is still a need to make continuous improvements in this act for meeting the changing needs and expectations from companies. Hence, the act is and should be amended from time to time as per the requirements. The major changes in Corporate Laws primarily came up after ‘liberalization of trade’ by the Indian Government in 1991. Foreign trade opened up and Indian companies were now interacting and at the same time competing with Multinational Companies. From the post liberalization era, Corporate Law has witnessed a significant transition from physical to online/electronic work including documentation, incorporation and registration of companies. Liberalization had several advantages but at the same time, it failed to revive the Stock Market as it was still suffering. Several fraudulent activities such as insider trading, price rigging and unregistered sales had become highly prevalent in the absence of any regulatory body. As a result, Securities and Exchange Board of India was established in 1992 which laid down the guidelines relating to the registration, conduct and the procedure to be followed by the brokers in stock market. It played a vital role to uplift the stock market and brought it at par with the global standards. After liberalization, for attracting investments and increasing trade activities, various concessions on loans and tax relaxations were provided to domestic and international companies. This plan of action severely backfired as companies started defaulting on loans and evaded taxes. Owing to this unprecedented increase in non-performing loans, the Insolvency and Bankruptcy Code was introduced in 2016. Being a very recent development, it has shown very promising prospects in providing a consolidated framework for insolvency resolution of corporations and for developing a sound business ecosystem in India in the coming years. The latest change or rather a revolution in the corporate world has been an increased recognition and acceptance of Cryptocurrencies all over the world. At present, there are around 15 million retail investors of Cryptocurrency in India. Several companies in recent times have been established to provide assistance and education to the general public regarding the trading of Cryptocurrencies along with certain risks which it carries. All these changes in Indian corporate ecosystem were brought to accommodate the changing business scenario and trade all over the world. To a large extent, these changes have played a vital role in making India reach to a level of global competence where it is considered a ‘Corporate Giant.’ However, we are still quite far from achieving a completely fair and ethical corporate system where all companies and professionals work with utmost integrity and honesty. To achieve this, we as working professionals need to incorporate basic corporate ethics in our organizations and encourage it among others. It is only through these measures that we could realize the vision of our Freedom Fighters to develop India into a global force to reckon.
