Corporate Affairs

2019 ias preliminary exam test series
  • There were about 29,357 registered companies at work in 1957 and this number has increased to 800761 registered companies in March, 2013.
  • The Ministry’s name was changed from ‘Company Affairs’ to ‘Corporate Affairs‘ in 2007.
  • The Ministry is primarily concerned with the administration of the Companies Act, 1956 and other related statutes namely, Limited Liability Partnership Act, the Acts governing the 3 professional institutes and with Competition Policy.
  • Companies Act, 2013 seeks to bring corporate governance and regulation practices in India at par with the best global practices.

 LIMITED LIABILITY PARTNERSHIP ACT

  • Limited Liability Partnership (LLP) is an alternative corporate business vehicle that enables professional expertise and entrepreneurial initiative to combine and operate in a flexible, innovative and efficient manner.
  • The liability of partners incurred in the the normal course of business does not extend to the personal assets of the partners.
  • It is capable of entering into contracts and holding property in its own name.
  • The provisions of newly enacted Limited Liability Partnership Act, 2008 have been notified for implementation with effect from March, 2009.
  • Limited Liability Partnership Rules, 2009 have been notified on 1st April, 2009.
  • LLP is a new business vehicle in the body corporate form and therefore a separate legal entity which limits the liability of the partners to their agreed contribution.
  • Originally, the Ministry of Corporate Affairs had set up a single central Registry in Delhi for registration of LLP.
  • In June, 2012, the Ministry has decentralized the Registry in 20 different locations, so as to enable wider penetration.
  • There are certain companies, inoperative since incorporation. In order to give an opportunity to the defunct companies, for getting their names struck off from the Register of Companies.
  • The Ministry has issued guidelines namely “Fast Tract Exit Guidelines” under Section 560 of the Companies Act, 1956. The said guidelines are in operation since July, 2011.

 NATIONAL FOUNDATION FOR CORPORATE GOVERNANCE (NFCG)

  • The Ministry of Corporate Affairs has set up NFCG as a not-for-profit trust to provide a platform to deliberate on issues relating to good corporate governance and to sensitize corporate leaders on the importance of good governance practices.
  • The NFCG has a three-tier structure for its management, viz., the Governing Council under the Chairmanship of Minister of Corporate Affairs, the Board of Trustees and the Executive Directorate.

 SERIOUS FRAUD INVESTIGATION OFFICE (SFIO)

  • Serious Fraud Investigation Office (SFIO) has been set up in the Ministry of Corporate Affairs by way of a resolution dated 2nd July, 2003.
  • The office has been set up to investigate corporate frauds of serious and complex nature.
  • It carries out investigation under the provisions of the Companies Act, 1956 and files prosecutions for the violations of the provisions of the Companies Act as well as Indian Penal Code (IPC).
  • At present there is no special Act governing the functioning and jurisdiction of SFIO. Therefore, the SFIO derives powers and functions under the Companies Act, 1956.
  • Investigations are being ordered and carried out under Section 235 and 237 of the Companies Act, 1956.
  • Under these provisions, the Central Government (under Section 235) or the Tribunal/Company Law Board/Court (under Section 237) can order investigation of any company or group of companies by the SFIO.

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Current Affairs for IAS Exam