Corporate Affairs - An International Perspective

Rapid growth of multinationals and the era of cross border mergers has given rise to complex problems of implementation of international law. Purely national solutions to the problems of corporate control are of no avail. Therefore, the mechanisms and processes by which such international companies are governed becomes an area of vital importance for the nations they function in.

Given hereunder is an international perspective with regards to how the corporate affairs are governed, administered and regulated in the world’s significant economies.

NATION	GOVERNING ACT	ADMINISTRATIVE BODY	ADJUDICATING BODY
India	The Companies Act, 2013	Ministry of Corporate Affairs Registrar of Companies	NCLT
United Kingdom	The UK Companies Act, 2006	Secretary of State	Company Names Tribunal UK Courts of competent jurisdiction
United States of America	State Laws The Federal Constitution The Revised Model Business Corporation Act US Securities Act, 1934	Securities and Exchange Commission Federal Trade Commission	Federal Courts of USA
Australia	The Corporations Act, 2001	Australian Securities and Investments Commission	Federal Circuit Court of Australia Federal Courts of Australia

INDIA:

The Ministry of Corporate Affairs, Government of India is responsible for formulating strategies and policies related to the corporate affairs in the country. Governed by the Companies Act, 2013, the Registrar of Companies acts as the administrative body for the companies in India. Securities and Exchange Board of India (SEBI) acts as the regulatory body for the publically listed companies. The adjudicating authority for matters of corporate affairs lies with the newly constituted NCLT and NCLAT. The jurisdiction of all other civil courts will be dispensed with, once the NCLT becomes fully functional. The Supreme Court of India, subject to certain restrictions, still however remains the court of highest appeal in matters of corporate affairs.

It must also be noted that with the onset of The Insolvency and Bankruptcy Code, 2016, the power of adjudication in matters of bankruptcy and insolvency in companies, which earlier vested with the Debt Recovery Tribunal, will also be shifted over to the National Company Law Tribunal.

UNITED KINGDOM:

The Company Law in UK had undergone a major reform in UK under the Company Law Reforms. The Department of Trade and Industry was responsible for bringing out the new company law, which is now known as the UK Companies Act, 2006. While the Indian Legal System updated itself by constituting a Tribunal which specifically relates to corporate affairs, there is no separate adjudicating body specifically formed for such matters in UK. Usually, the powers of sanctioning the scheme of restructuring or of resolving an application for grievances of the stakeholders are vested with the courts of competent jurisdiction.

However, the Company Names Tribunal is a separate adjudicating body specifically constituted to provide a remedy for parties who are aggrieved by the registration of a company name in which they have a goodwill/reputation; specifically, that they suspect the name has been registered in order to extract money or to prevent the aggrieved party from registering the name.

UNITED STATES OF AMERICA:

There is no federal corporation statute as such in the US. Each state has its own corporate law regime and it provides for wide diversity of legislation and experimentation in the corporate form. However, the Federal Constitution ensures uniformity and harmony across the United States. Another harmonising factor is existence of model statutes which serve as uniform acts or drafting guides which may be customised by individual states. Revised Model Business Corporation Act largely serves as a guide for corporate laws for most of the states in US. Since the US has a long tradition of individual ownership of securities, the most significant of these federal laws applicable to corporations is the federal securities regime. Therefore many matters characterised as company law elsewhere have been characterised in the US as securities law and taken out of the ambit of state legislatures.

There is no special court formed for matters relating to corporate affairs. The Securities and Exchange Commission is the administrative body for corporate affairs in the US. The Federal Trade Commission can be approached when issues related to consumer protection and competition aspects come into question. The rest of the jurisdiction lies in Federal Courts of the US.

AUSTRALIA:

Heavily borrowed from the common law of UK, the Australian companies are governed by Corporations Act, 2001 and administered by a single national regulatory authority, the Australian Securities and Investments Commission.

The adjudicating bodies for corporate affairs include Federal Circuit Court of Australia which hears less complex disputes in matters under family law, administrative, bankruptcy, industrial relations, migration and trade practices law. The Federal Court of Australia hears matters on a range of different subjects including bankruptcy, corporations, industrial relations, native title, taxation and trade practices laws, and hears appeals from decisions (except family law decisions) of the Federal Magistrates Court.

SOURCES:

Advanced Company Law – ICSI;

The UK Companies Act, 2006;

www.nclt.in;

www.mca.gov.in;

www.gov.uk;

www.australia.gov.au;

www.ftc.gov;

www.uscourts.gov