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Law Service

Corporate Law

Legislative History

Corporate law is related to legal entities or publicly or privately owned companies. It deals with business associations and consists of corporate governance and corporate finance. Corporate governance involves the powers, relations and authority within a corporation and corporate finance consists of the policy dealing with the use of its capital. As such, corporate laws are the basis for corporate governance in India and it is essential to effectively accomplish a corporation’s financial performance.

Corporate Law in India

Corporate law connotes law of corporation or companies. It regulates all matters, from the birth of companies to their dissolution. It is the law that regulates the working of incorporated corporate entities. Corporate law does not restrict itself to the Companies Act only but applies to allied legislations as well.

The legal system in India closely resembles English law. In law, a company is considered as separate legal entity with a separate existence than the individuals who own or run the company’s activities. Corporate law deals with law related to corporations or companies, and it is essential to administer all matters starting from the formation of a company to its dissolution. The law controls functioning of incorporated bodies or legal entities. Nevertheless, it is not limited to Companies Act alone, but it also involves related legislation like Depositories Act, Securities Contracts (Regulation) Act etc. Likewise, corporate law provides in part to include contract and property law to corporate structure and, significantly handles the organizational issues that are related to it.

Corporate law is the branch of law which includes in it:
Companies Act
Company Rules & Regulations
Initial Public Offer
Further Public Offer
Rights Issue
Indian Depository Receipts
Qualified Institutions Placement
Public Issue of Debt Securities
Commercial Paper
External Commercial Borrowings
Trade Credits
Foreign Currency Exchangeable Bond
Corporate Restructure - Reduction of share capital
Buy back of shares
Reorganization through arrangement
Foreign investment law and many other related aspects which are related to the functioning and management of a corporate

Client Segments

Corporations can be considered as the most common form of business organization in the world. The main characteristic feature of a corporation is its limited liability to owners, issuance of shares and transferable stock, investor ownership, delegated management and perpetual existence. Once a company is incorporated, it has a separate legal standing from its owners and the owners shall not be personally liable even after the corporation is being sued. Therefore, the main purpose of corporate law is to safeguard the interests of the persons affected by the entity’s activities as well as the society as a whole. Corporate law structures corporate affairs in order to achieve these goals.

Related Enactments

The Indian Contract Act,1872
The Act prescribes the provisions governing Contracts in the country.

The Public Debt Act, 1944
The Act specifies the law relating to Government Securities and to the management by the Reserve Bank of India of the public debt of the Government

Industrial Disputes Act, 1947
The Act lays down the provisions for the investigation and settlement of industrial disputes, and for certain other purposes.

Industries (Development and Regulation) Act, 1951 (IDRA)
The main objectives with which the Act was enacted was to take necessary steps for the development of industries; to regulate the pattern and direction of industrial development; to control the activities, performance and results of industrial undertakings in the public interest.

The Securities Contracts (Regulation) Act, 1956 (SCRA)
The Act was enacted to prevent undesirable transactions in securities by regulating the business transactions.

The Companies Act, 1956
The Act governs the Companies incorporated in India.

Securities and Exchange Board of India Act, 1992 (SEBI)
The Act provides for the establishment of a Board to protect the interests of investors in securities and to promote the development of, and to regulate, the securities market and for matters connected therewith or incidental thereto.

Depositories Act, 1996
The Act provides for the regulation of depositories in securities and for related matters.

Prevention of Money Laundering Act, 2002
The Act specifies provisions for prevention of money laundering.

The Government Securities Act, 2006
The Act specifies the law relating to Government securities and its management by the Reserve Bank of India.