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DR. J.

J IRANI COMMITTEE REPORT ON COMPANY LAW,2005

BRIEF INTRODUCTION

CORPORATION : It is creation of law as an

association of persons forming part of the society in which it operates.

GOOD CORPORATE GOVERNANCE

Good Corporate Governance are not born , but are made by the combined efforts of all Stakeholders which include Shareholders , Board of Directors , Employees, Customers , Dealers , Government and the Society at large.

DR. J.J. IRANI

The Chairperson of the Committee of Company Law , 2005.

Responsible for giving the Suggestions in laying Sound Base for Corporate Growth in coming years.

On August 4, 2004 the Ministry of Company Affairs had published a Concept Paper on Company Law on its website to enable a broad-based examination of various Company Law issues requiring revision. Later, on December 2, 2004, the Government constituted an Expert Committee on Company Law under the Chairmanship of Dr. J.J. Irani to make recommendations on :

RECOMMENDATIONS BY DR. J.J IRANI


Responses received from various Stakeholders on the CONCEPT Paper. Issues arising from the revision of the Companies Act, 1956. Bringing about compactness by reducing the size of the Act & removing redundant provisions. Enabling Unambiguous interpretation by recasting the provisions of the law.

Providing greater Flexibility in rule making. Protecting the interests of the Stakeholders, Investors, Small Investors.

SPECIAL INVITEES FOR COMMITTEE


Trade & Industry Associations Chambers of Commerce Senior Advocates & Auditors

Representatives of Govt. depts.


Regulatory Bodies Professional bodies and Institutes

IMPORTANCE OF THE REPORT


The Irani report has made suggestions to reform and update the basic corporate legal framework essential for sustainable economic reform. It will helps in making Sound Base for Corporate Growth in the coming years. It is balanced and well rounded document attempts to equate the pulls and pressures of Modern Business and those of Shareholders Democracy.

It is the step towards providing a Growth Oriented and Modern Company Law. It address the concerns of all the Stakeholders to enable the adoption of internationally accepted best practices.

ISSUES REGARDING REPORT


Independent Directors Single Person Company

Pyramidal Strs.
Selfregulation Accounts & Audits and Governance Standards

Power to Shareholders Stringent Penalties

INDEPENDENT DIRECTORS
50% of the Board of a listed company consist of Independent Directors. 1/3rd of the Board of a listed company should comprise Independent Directors.

PYRAMIDAL STRUCTURES

Subsidiary Companies could itself be a Holding company.

POWER TO SHAREHOLDERS
Liberty to the Shareholders. Shift from govt. approval regime to a Shareholders approval and disclosures regime. Protect the Rights of Minority Shareholders

SINGLE PERSON COMPANY

Introducing the concept of One Person Company (OPC)

STRINGENT PENALTIES

Help to curb fraudulent Behaviour of the companies

ACCOUNTS AND AUDITS


Proper and Accurate Compilation of financial information of a Corporate and its Disclosure. Stringent penalties in case for Non-observance.

GOVERNANCE STANDARDS
It is hoped that that Committees report will give a new thrust and fresh perspective to the Govt. on Company Law. It has just submitted its recommendations but its thrust is reminiscent of attempts in the U.S. and elsewhere to tone down the rigour of the emerging Law.

THANK YOU