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DR. J.J IRANI COMMITTEE REPORT ON

COMPANY LAW,2005

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BRIEF INTRODUCTION

CORPORATION: It is creation of law as anassociation of persons forming part of the

society in which it operates.

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GOOD CORPORATE GOVERNANCE

Good Corporate Governance are not born , but are made by

the combined efforts of all Stakeholders which includeShareholders, Board of Directors , Employees, Customers ,

Dealers , Governmentand the Societyat large.

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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.

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OnAugust 4, 2004 the Ministry of Company Affairs hadpublished a Concept Paper on Company Law on itswebsite to enable a broad-based examination ofvarious Company Law issues requiring revision.

Later, on December 2, 2004, the Governmentconstituted an Expert Committee on Company Law

under the Chairmanship of Dr. J.J. Irani to makerecommendations on :

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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 theprovisions of the law.

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Providing greater Flexibility in rule making.

Protecting the interestsof the Stakeholders, Investors,Small Investors.

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SPECIAL INVITEES FOR COMMITTEE

Trade & Industry Associations

Chambers of Commerce

Senior Advocates & Auditors

Representatives of Govt. depts.

Regulatory Bodies

Professional bodies and Institutes

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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 CorporateGrowth in the coming years.

It is balanced and well rounded document attempts to

equate the pulls and pressures of Modern Businessand those of Shareholders Democracy.

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It is the step towards providing a GrowthOriented and

Modern Company Law.

It address the concerns of all the Stakeholders to

enable the adoption of internationally accepted best

practices.

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ISSUES REGARDING REPORT

IndependentDirectors

PyramidalStrs.

Power toShareholders

Single PersonCompany

Self-regulation

StringentPenalties

Accounts &

Audits andGovernanceStandards

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INDEPENDENT DIRECTORS

50% of the Board of a listed company consist of

Independent Directors.

1/3rdof the Board of a listed company should comprise

Independent Directors.

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PYRAMIDAL STRUCTURES

Subsidiary Companies could itself be a Holdingcompany.

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SINGLE PERSON COMPANY

Introducing the concept of One Person Company(OPC)

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STRINGENT PENALTIES

Help to curb fraudulentBehaviour of the companies

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ACCOUNTS AND AUDITS

Proper and Accurate Compilation of financial

information of a Corporate and its Disclosure.

Stringent penalties in case for Non-observance.

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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.

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THANK YOU