Date: Feb 19, 2013
Venue: College Seminar Hall
A seminar on Companies Bill, 2012 was organised by the Commerce Society for the first years following their subject Corporate Law.
The entire batch seemed to be present and were excited to learn more about a topic in their course.
The speaker for the day was Mr. J.P. Sharma, Professor of Law & Corporate Governance, Dean, Faculty of Commerce & Business, Head, Department of Commerce, Delhi School of Economics, University of Delhi.
He was warmly welcomed by our HOD, Mr. N.K. Jain and other teachers present.
Sir started his presentation by explaining where the concept of Companies Act came from. Going back to the 11th-13th century, we were introduced to GUILTS, the trade monopolies and to the two types of issuers. The basic question about the difference between a Company and a Partnership was highlighted and the answer was - Liability and Mutual Agency. It was interesting to know that the Companies Act was conceived, born and brought up in England! Surprisingly, our laws are a copybook of their provisions. We got to know that the major development or changes took place during the time of the EIC (East India Company) under the rule of Queen Elizabeth I. As a part of current affairs, last year the EIC was bought by an Indian in the UK.
In the year 1844, the concept of a Joint Stock company was introduced, while in 1862, it was removed. The year 1948 saw the full fledged Companies Act.
The need for Companies Bill arises because of focused attention on Corporate Governance. The Satyam scandal in Jan 2009 brought about major changes in the legal outlook. The fiasco took everyone by surprise and the introduction of this bill became inevitable. From 30,000 to a sprawling 9.5 lakh companies in India, the development has come a long way. The bill was first suggested in Oct 2008, next action in Aug 2009, in 2011 and has finally been passed by the Lok Sabha on Dec 18, 2012. The structure of the bill consists of 658 sections, 470 clauses and 7 schedules that support the main bill. The main highlights of the bill are the 33 new definitions, it's purpose to promote small business and the mention of an Associate Company.
The new components are the Key Managerial Process, CEO, CFO, Officer in Default, Promoter, Uniform Financial Year, Entrenchment Procedures, Registered Office of the Company, Prospectus, the sources of finance and the irredeemable shares.
The Bill talks about the manner of selection of the independent directors, their duties, Boards Meetings and Committees and the AGM.
Initiatives have been taken to shift processes online including the registration of companies, maintenance of books of accounts, the issue and circulation of shares etc. A Code of Conduct has also been mentioned. Secretarial Standards have been brought out, duties have been casted upon the Company Secretaries, stringent punishment for failure of distribution of dividends and Class Action suits with the invent of Serious Fraud Investigation Office. Insider Trading has also been prohibited with imprisonment and fine.
Prof. Sharma really added a lot to our knowledge and learning. The house was also open to queries and questions. Mr. Bharat Bhushan, Professor, Commerce came up with his sense of humour, questioning why an attempt to change the law results in the change of the government, why illiterates get yo become chairpersons and why AGMs are not held only on Sundays! Students present also came up with their curiosity.
The Seminar ended by felicitating the winners of a monthly event- The Brainy Ericture, Mahvish Hamid and Richa from the first year.
Prof Sharma congratulated the winners.
The Commerce Society strives to achieve excellence in whatever it does and welcomes suggestions for future events.
- Shaurya Gahlawat