This article has been written by Ms Kamakshi, a 4th year law student from REVA university

The Companies Act 1956 was enacted on the recommendation of the Baba Commission established in 1950. It aims to consolidate  existing company law and create a new foundation for companies to operate in an independent India. The passage of this Act in 1956 repealed the Companies Act 1913. 

2. The Companies Act, 1956 has  provided the legal framework for Indian companies ever since. The need to simplify this law has been felt at times as the corporate sector has grown in step with the Indian economy and has undergone more than 24 changes since 1956. Significant amendments to this Act were made by the  Companies (Amendment) Act 1988 on the recommendation of the Sachar Commission and, as a result of the report, the Companies (Amendment No. 2) in 1998, 2000 and finally 2002. done by law. of the Eradication Commission. 
3. Faced with the challenges of economic restructuring  to meet the realities of the changing economic environment, many countries have undertaken major revisions to their  corporate laws. British company law was amended in his 1980s. As a result, many countries whose legal systems  derived from the UK, such as Australia, New Zealand and Canada, have also reviewed their corporate law and implemented some major reforms. It is widely recognized that reforming and updating the basic legal framework that governs business is essential to enabling sustainable economic reform. 
4. After a slow start in the 1980s, India embarked on an economic reform program in her 1990s. A major overhaul of the Companies Act 1956 was also deemed necessary. Attempts were made in 1993 and 1997 to replace the current law with  new laws, but they were unsuccessful. Companies (Amendment) Bill 2003. Significant provisions on corporate governance have also been introduced, but their consideration  has been deferred until a full revision of the Companies Act. Reforms have been progressively continued through amendments, but it is still not  possible to obtain a comprehensive new law to replace the existing law. 
5. In the current domestic and international situation, corporate law needs to be simplified to accommodate clear interpretation and provide a framework that enables faster economic growth. There is also growing recognition that the regulatory framework for companies must be consistent with the new economic scenario, promote good corporate governance, and be able to protect the interests of  investors and other stakeholders. increase. Companies in a highly competitive, technology-driven business environment need opportunities for greater autonomy of behavior and  self-regulation with optimal compliance costs, while ensuring transparency through better disclosure and  owners and management should be more accountable for improvement. compliance.  
6. It is welcomed that the Government has adopted this new initiative for a major review of the Companies Act 1956, based on an extensive consultation process. As a  first step in this consultation process, a legal concept paper on corporate law is now available electronically. This allows all interested parties to not only express their views on related concepts, but  also to propose wording on various aspects of company law. corporate law. This was a commendable step and received a great response. Comments and suggestions were received from a wide range of organizations, professional bodies and individuals. This consultation process will not only allow ideas, comments and proposals to flow in from all sides, but will also allow the government to draft appropriate legislative proposals to meet the demands of the growing Indian economy in the coming years. make it possible. 
7. Accordingly, the Government considered it appropriate to subject the proposals contained in the Concept Papers, and the proposals received for them, to a worthy evaluation by an independent panel of experts. The current committee was established on December 2, 2004 under the chairmanship of Dr. He. J. J. Irani, director of Tata Sons, advises the government on  proposed changes to the Companies Act, 1956. The aim of the exercise is  to enact simplified and compact legislation that can respond to changing national and international scenarios, enable the adoption of internationally recognized best practices and provide sufficient flexibility. It is recognized as an aspiration of the government side. To develop new contracts in a timely manner in response to the demands of ever-changing business models. Giving India a modern company law that meets the needs of a competitive economy is a welcome move. 
8. The  Committee  of Experts shall consist of his thirteen members and his six special members from various fields and fields, such as trade  industry, chambers of commerce, professional bodies, representatives of banks and financial institutions, senior advocates, etc. Consists of invitees. Represented by special guests related to the subject. The Commission thus brings  a wide range of expertise and experience to the issues before it. In the exercise taken up by  the Commission, the Commission took the Companies Act 1956 (Amendment) as its basis and adopted the following approach: 

1. Taking note of the concept papers and proposals/objections and comments  received from various quarters in order to make it possible to form an opinion on the desirable features of the new legislation, 

1. Good corporate governance that identifies the key factors to be addressed by the new legislation, maintains the desirable features of the existing framework, separates substantive law from procedure, and gives equal consideration to the concerns of all stakeholders; provide a clear framework for  

 iii. It makes recommendations to allow for simple and clear interpretation and paraphrases the provisions of the law  to allow for easy understanding and interpretation. 

1. Increase procedural flexibility by drafting regulations so that  the legal framework can adapt over time without  substantive statutory changes, a time-consuming process; 

1. Responding to concerns arising from the experience of  stock market fraud and corporate disappearances in the 1990s

A glimpse into the emergence of the Companies Act 1956: Indian company law is largely based on current English law. The predecessor of the 1956 Act was the 1913 Act, with several amendments and amendments, including sweeping amendments to the 1936 and his 1951 Acts. An unprecedented scale at the same time. During this period, there were significant developments in the organization and management of public companies, which attracted more public attention. After two years of post-war research, Britain’s Cohen Commission (Companies Law Reform Commission) submitted a report recommending far-reaching changes to the 1929 UK Companies Act. Even in India, there were deep feelings about the experiences gained during the war. The time for a new law is ripe. Thus, shortly after World War II, the Indian government began amending the Companies Act. His two corporate lawyers, Bombay and Madras, were appointed to advise the government on the amendments to the 1913 Act. Their report was taken into consideration and a memorandum of opinion was circulated by the end of 1949. October 28, 1950. Government of India, C.H. He submitted a report in March 1952 recommending amendments to the Companies Act 1913. The report was again submitted to chambers of commerce, trade associations, professional bodies, key businessmen, shareholders and workers’ representatives.

Conclusion 

The changes made to the law were reactive in nature. For example, the most significant changes were in response to the following global phenomenon: i) colonial era; ii) the period after World War II; iii) the opening of the Indian market in 1990; However, recent changes are positive in nature and seek to increase the effectiveness of laws relevant to social dynamics.