Report of the 1st Company Law Committee (2016) and the Companies (Amendment) Bill, 2016
Reforming company law for improving corporate governance standards in India
The Companies Act, 2013 was enacted in late 2013 and many of its provisions came into force in 2014. Before this law was enacted, companies were primarily regulated under the Companies Act of 1956. The 2013 Act brought about several transformative changes to company law in India. However, it also caused significant implementation issues that undermined ease of doing business and created several arbitrage opportunities for wrongdoers. The 1st Companies Law Committee was set up in 2015 to review the new Act and make recommendations for ironing-out such issues. Six working groups were set up under committee’s aegis to examine issues relating to incorporation, raising of capital, accounts and audit, corporate governance, offences and penalties and subjects falling within the jurisdiction of the National Company Law Tribunal (such as oppression and mismanagement, insolvency and schemes of arrangement).
The committee’s recommendations paved the way for several long-term changes to company law in India. One of its most important recommendations related to improving the transparency of Indian companies by requiring appropriate disclosures about beneficial ownership of shares in line with international best practices. This recommendation was targeted at discouraging the use of shell companies for tax avoidance and money laundering.
The Committee released its report in February, 2016. Many of its recommendations were included in the Companies (Amendment) Bill, 2016, which was introduced in the Parliament in March, 2016 and after being considered by a Standing Committee, got enacted in December, 2017.
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About the Contributors
Debanshu is one of Vidhi’s Co-Founders. He has over a decade of experience in commercial laws and the financial sector and has advised the Government of India on several legislative projects in this space. He was instrumental in advising the Government on the design and drafting of the Insolvency and Bankruptcy Code and its subsequent implementation. He has developed and curated Vidhi’s work on insolvency law, corporate law, financial regulation, and competition law and conceptualized its Bankruptcy Research Program. He has served as a member of a Government-appointed committee for operationalizing the National Company Law Tribunal and deposed before two Parliamentary committees examining financial sector legislation. He has also worked as a teaching fellow at Harvard Law School. He is an alumnus of the Harvard Law School, the University of Oxford, and Hidayatullah National Law University. He attended Harvard as a Fulbright Scholar and was awarded the Irving Oberman Memorial Prize in Bankruptcy and the Dean’s scholar prize in Corporations. He was also awarded a Distinction for his graduate studies at Oxford. In 2017, he was selected for NYU School of Law’s Hauser Global Scholarship, which he waived. His academic work has been published in peer-reviewed journals and an edited book published by Cambridge University Press, New York. He has been consulted by and mentioned in global business publications, such as IFR Asia and The Economist. Earlier, Debanshu practiced as an M&A and regulatory lawyer with AZB & Partners at its Mumbai and New Delhi offices.
Shreya is a Senior Resident Fellow and Lead, Law, Finance and Development. Her areas of interest are company law, insolvency law, corporate governance and responsible business conduct, fintech and financial inclusion. At Vidhi, she has worked on a diverse range of projects including research and drafting of the Insolvency and Bankruptcy Code, 2016 and consequent amendments and subordinate legislation, review of offences under the Companies Act, 2013 and drafting of the National Action Plan on Business and Human Rights. Shreya completed her B.B.A. LL.B. (Hons.) from the National Law University, Jodhpur in 2012 and her LLM from the Queen Mary University of London on a Chevening Scholarship in 2019, where her dissertation focused on peer-to-peer lending. She also worked as a Legal Consultant in the Financial Law Unit of the Legal Transition Team at the European Bank for Reconstruction and Development, London in 2019. Prior to joining Vidhi, she worked as an associate at Luthra & Luthra Law Offices, Delhi in the mergers & acquisition and real estate team.
Anjali worked as a Project Fellow at the Vidhi Centre for Legal Policy.
