CORPORATE LEGAL SYSTEM – CORPORATE REGULATION

SEMESTER: VII & IX

BA.LL.B. (HON’S.-II)
SESSION: JULY-NOVEMBER-2018
DR. Y. PAPA RAO

INTRODUCTION TO THE COURSE:

In the present context, it is widely recognized that “the two most powerful
institutions in the society are the business and government; where they meet on
common ground – amicably or otherwise – together they determine public policy,
both foreign and domestic for a nation.1 Historically, the role of government in respect
of business varied considerably in kind and degree, from laissez fair and mercantilism
to conventional communism characterized by centralized planning and almost state
monopoly. The last seven decades or so, the period since the end of the II World War
and the coming into being of the World Bank – IMF and GATT, have witnessed several
shifts, evolutionary to revolutionary, in approach, policy and government
intervention in business across the world. Thus the need of the hour is to identify the
areas of concern then adopt, and implement an effective regulatory framework that
provides paradigm for the business enterprises and corporate entities to foster the
market.

Markets, across the globe are undergoing profound, unprecedented and fast-
paced changes. The change is from regulation to management; the change is from
regulation to development. This change in the world market has changed the role of
regulators as well. Regulation within the corporate sector cover a broad spectrum of
activities extending from providing a suitable environment or a developing a culture
that encourages corporate houses to enter the market, to promote the development of
business, to share liabilities, bear risks, to plan for best use of resources and to finally
ascertain the end results of the corporate entities. This necessitates for having a
separate paper on Corporate Regulation so that the role and function of the regulators
can be meticulously studied.

1
Marshall E. Dimock, Business and Government, New York: Holt, Rhinemann and Winston Inc. 1960, p.1.
MODULE 1. INTRODUCTION

1. Basic concepts and dimensions

2. Financial regulation – scope, rationale and policies.
3. Financial system – Overview
- Financial Markets
- Financial Institutions
- Financial Instruments
- Financial Services
MODULE 2. REGULATORY FRAMEWORK – REGULATORS

1. Government –
Business and Government
Legal environment
2. Ministry of Finance – Objective and Vision
Function, Role
E-Governance
MCA-21
3. Registrar of Companies.
4. Securities Exchange Board of India (SEBI)
5. Reserve bank of India
6. Insurance Regulatory and Development Authority
7. Pension Fund Regulatory and Development Authority
8. Competition Commission of India
9. Self-Regulatory Organizations (SROs)
10. Ombudsman

References
SEBI Regulations:
 SEBI (Self Regulatory Organizations) Regulations 2004
 SEBI (Ombudsman) Regulations, 2003

MODULE 3. CORPORATE REGULATION UNDER INDIAN COMPANIES ACT

1. Directors – position, role and function

2. Individual Shareholder Right, Corporate Membership Rights, Derivative Action
and Representative Suits
3. Transfer and transmission of securities
4. Company Secretary – regulation
5. Investigation in the affairs of the company
6. Investors rights under Companies Act 1956
7. Prospectus and Disclosures

MODULE 4. PROTECTION OF INVESTORS THROUGH REGULATION

 1. Rights of Investors under SEBI, SCRA and Listing Agreement
2. Dematerialization of Securities – Depositary System & Procedures
3. Buy-back of Shares
4. Issue of ESOP and Sweat Equity Shares
5. Prohibition of Fraudulent and Unfair Trade Practices
6. Investor Education and Investor Grievance Redressal Mechanisms
7. Alternative Investment Fund Regulation
8. Collective Investment Scheme Regulation

References
SEBI Regulations:
 SEBI (Prohibition of Fraudulent and Unfair Trade Practices) Regulations 2003
 SEBI (Ombudsman) Regulations, 2003
 SEBI (Depositories and Participants) Regulations, 1996
 SEBI (Employee Stock Option Scheme (ESOP) Guidelines
 SEBI (Issue of Sweat Equity) Regulations, 2002
 SEBI (Prohibition of Insider Trading) Regulations 2015

MODULE 5. CORPORATE GOVERNANCE

1. Corporate Governance : need for regulation – concept, benefits

2. Evolution, best practices
3. Corporate governance - features and problems of law reforms
4. Codes and guidelines on corporate governance - Analysis

References
 Cadbury Report 1995
 CII Voluntary Code of Corporate Governance (1998)
 Kumarmangalam Birla Committee Report (1999)
 Malegam Committee Report (2002)
 Naresh Chandra Committee Report (2002)
 Narayan Murthy Committee report (2003)
 J.J. Irani Committee Report (2005)
 Corporate Governance Voluntary Guidelines 2009
 Listing Agreement, Clause 49& Sec 177 of Companies Act 2013.

MODULE 6 CORPORATE SOCIAL RESPONSIBILITY

1. CSR – concept, different approaches,
2. Problem in delimiting boundaries.
3. Regulation – Voluntary CSR
4. Provisions of Companies Act, 2013
5. Current Issues.

References
 CSR Voluntary Guidelines 2009
  National Voluntary Guidelines on Social, Environmental & Economic
Responsibilities of Business 2011
 Companies Act 2013
OTHER REFERENCES:
Webliography:
1. http://www.sebi.gov.in/ [Securities Exchange Board of India]
2. https://nsdl.co.in/ [National Securities Depositories Ltd.]
3. https://cdslindia.com/ [Central Depository Securities Ltd.]
4. http://www.nse-india.com/ [National Stock Exchange]
5. http://www.bseindia.com/ [Bombay Stock Exchange]
6. http://www.nasdaq.com/ [National Association of Securities Dealers
Automated Quotation System]
7. http://www.mca.gov.in/ [Ministry of Corporate Affairs, GOI]
8. http://www.rbi.org.in/home.aspx [Reserve Bank of India]
9. http://finmin.nic.in/ [Ministry of Finance]
10. http://www.crisil.com/index.jsp [CRISIL]
11. http://www.dipp.gov.in/ [Department of Industrial Policy and Promotion]
Important Acts
1. Companies Act, 2013
2. Securities and Exchange Board of India Act, 1992
3. Securities Contract (Regulation) Act, 1956
4. Foreign Exchange Management Act, 1999
5. Reserve Bank of India Act 1934
6. Depositaries Act 1996
Books
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2. Bharat’s Manual of SEBI, 16th Ed (2009) vol. 1 & 2
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Wadhwa, 2005
4. Charlesworth& Morse, Company Law
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Clarendon Press: Oxford (1993)
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and responsibility, Oxford University Press
8. Joseph A. McCahery and Vermeulen, Corporate Governance of Non-Listed
Companies, Oxford (2008)
9. K Sekhar, Guide to SEBI Capital Issues, Debentures, & Listing, 3rd Ed. in 2 volumes,
Wadhwa, 2003
10. K. Majumdar, Dr. G. K. Kapoor Company Law & Practice, Taxman
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Financial Markets, Kluwer Law International (2007)
12. Palmer, Company Law
13. Pennington, Company Law
14. Phillip R. Wood, Regulation of International Finance, The Law and Practice of
International Finance Series, Thomson: Sweet & Maxwell (2007) (Chapters 1-7)
15. Rainer Grote and ThiloMarauhn, The Regulation of International Financial Markets:
Perspectives for Reform, Cambridge (2006)
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Practice with Case Studies, Deep & Deep (2007)
17. Robin Hollington, Shareholder’s Rights, 5th Ed., Thomson: Sweet & Maxwell, (2007)
18. Subhasis Ray, Corporate Social Responsibility: Cases, ICFAI Publication.
19. T. P Ghosh on Companies Act 2013, Taxmann.
20. Taxmann’s Companies Act 2013.
21. Taxmann –Guide to CSR.
22. Dr. G.K. Kapoor, Sanjay Dhamija, Company Law and Practice, Taxman, 20th Edition,
2015.
23. Taxman, SEBI Manual, 24th Edition, 2014
24. A. Ramaiya, Guide to The Companies-Act-2015, Eighteenth Edition
25. Lexis Nexis, Corporate Law Reference, Second Edition-2016.
26. Dr. H.K Saharay-Company Law- Seventh Edition-2016
27. Taxmann’s SEBI Mannual – 29th Edition-2017
28. Brenda Hanningan- Company Law- 5th Editions-2018
29. Avtar Singh –Company Law 17th Edition-2018
30. Taxmann (LL.B Series-2018) By Dr. G.K. Kapoor, Dr. Sanjay Dhamija and Dr. Vipan
Kumar (Authors).