Individuals, organizations, and establishments require a legal structure and authorization to function as a corporation.
Corporate law dictates the legislation governing their rights and conduct.
They address any legal requirements or external affairs that arise during the existence of a corporation.
They also maintain law and order among shareholders, stakeholders, and consumers and perceive how they interact.
The scope of corporate law encompasses the formation, functioning, merging, and disenfranchisement of an establishment.
Major lawsuits involve cases of corporate malpractice, fraud, or violation of intellectual property rights. The rights and health of employees in the workforce are also protected.
The nature of the industry usually shapes relevant corporate laws. Each sector has a unique functioning and requires legislation of matters prevalent exclusively to them.
- Banking and Finance Sector – Laws in this sector often deal with financial matters like debt restructuring, funding, and lending, acquisition, etc.
- Real Estate – Laws oriented to real estate involve property acquisitions, transactions among parties, joint ventures undertaken by companies, etc.
- Capital Market – Lawyers dealing in the International Capital Market resolves cases on Initial Public Offerings (IPO), debt securities, exchangeable bonds, institutional placements, and work closely with investors and banks.
Companies often hire corporate lawyers to resolve in-house legal matters about policies, taxes, and employment.
Public and private law firms also undertake litigation duties and advise corporations on security, tax, or regulatory issues.
The Companies Act, 1956 is the most prominent legal documentation in India regarding corporate and company law.
Other significant legislation includes –
- Foreign Trade Act (Development and Regulation) of 1992, regarding the regulations in exports and imports in India
- Companies (Amendment) Act, 2006, mandates any establishment to appoint am individual as director only if they hold a Director Identification Number (DIN, under Section 266B)
- Competition Act, 2002, upholds sustainable competition in the market and prohibits foul play.
- Employment and Labor Law, 2019, defines labour laws on bonuses and minimum wages to employees and equal remuneration.
- Corporate Social Responsibility (2014) mandates that businesses must dedicate a certain amount of their profits to societal welfare, including education, poverty, gender equality, etc. India is the first country to make CSR compulsory.
- Prevention of Money Laundering Act, 2002, to combat cases of money laundering and financial mishandling.
- The Securities and Exchange Board of India, 1992, to establish a Board representing the interest and security of the company and the investors.
- The Company Secretaries Act, 1980, for the development and direction of Business secretaries.
Business problems and corporate culture may be diverse across different sectors.
However, legal requirements often overlap. Corporate law is a vast stretch of legislation that often derives from financial regulation, corporate governance, and commercial law.
The objective of the rules is to ensure the equal representation of all parties in the realm of business.
It also illustrates the structure of the establishment and defines the tasks and duties of company representatives.
For more details about the nuances of corporate law and the legislation in India, please fill-up the form on our website and get in touch with expert counsel.