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  • In India, the laws and regulations that regulate corporate law compliance include the Companies Act, SEBI Regulations, FEMA and the IBC that provide on the Companies’ Reporting, Corporate Governance and Insolvency Resolution. 
  • In the present business environment, the company must follow certain rules and regulations which apply to it to avoid certain penalties which can be in terms of fines or penalties and also to enhance the position of the company in the market, compliance in the corporate world is significant because it lays the foundation, safeguards against the repercussions of negligence, boost confidence and guarantee the provision of a safer place of work. 
  • It is a branch of law that handles such general business legal concerns as corporations and their mergers and acquisitions and the management of business organizations and their interaction with other organizations and their shareholders. 


The course in corporate law is more inclined towards the legal subject and external environment, mergers and acquisitions, and the relations between the stakeholders, shareholders and other entities involved in the transactions through corporate governance and business transactions. Corporate lawyers offer legal services to companies and business entities and can work for major law firms, and firms of moderate size, or can be a part of organizations such as the “Reserve Bank of India, Securities Exchange Board of India, or Insurance Regulatory and Development Authority of India”. This area of the legal practice deals with a very wide range of services, including, but not limited to, drafting and negotiating various legal documents especially business-related agreements and also advice on issues to do with company formation and structure. Mechanics of business law, connected with corporate law, is the branch of law that addresses legal issues arising from commercial activities such as the sale of goods and provision of services, banking and finance. These two fields are sometimes related and the roles of lawyers may merge in some cases. Corporate lawyers are thus important in offering legal advisory services to companies, giving practical recommendations that reflect the corporate objectives as well as the business environment, and having a clear understanding of the legal regime regulating business activities. 

To meet the legal requirements of the state and avoid getting into trouble with the authorities, numerous advantages can be enjoyed by a company. Emphasizing compliance provides several advantages: It provides guidelines for the business to follow, avoids the possibility of legal consequences for negligence, enhances the image of the business, and ensures that the employees work safely and professionally. Compliance entails observing the rules, regulations, laws and procedures set by organizations and society in general. It assists the organization in remaining ethical, governing the business, and minimizing risks within the organization. The goal of compliance is to make sure that clients and companies conform to legal and moral standards that are acceptable in society.

Corporate compliance simply refers to the rules, laws and regulations of the industry and organization that are laid down by the employer for every employee to follow. It also includes internal and external compliance. It has two categories namely internal compliance, which are the guidelines and standards set within an organization and followed in its operations, and external compliance, which are the guidelines and laws set by external authorities that an organization has to adhere to. Compliance is vital to avoid violation of laws and other regulations because corporate compliance is important in developing countries like India with constantly changing rules and regulations. Compliance is synonymous with governance and risk management and can be described as a program or a set of rules that are in place in a given company and which help identify any non-compliance. The compliance program should provide direction to the employees and deter them from engaging in misconduct as they should make sure that they understand the program to improve their work. It means that the compliance and legal departments should ensure that all policies, procedures, and activities are in sync with the objectives; and strategic planning for risk assessment and management.


Corporate law in India has developed over the centuries in response to the economic, political and social environment of the country. The development of corporate law in India can be split into three broad phases: the colonial period, the period of post-Indianisation changes, and the period of globalization and liberalisation. The development of corporate law is also associated with the emergence of the concept of corporate compliance that defines modern business practices. The basis of corporate law in India was laid during the British colonial period with the introduction of the Indian Contract Act of 1872

The Indian Companies Act was passed in the year 1866, which incorporated all the previous alterations and offered a comprehensive structure for the regulation of the companies. The Act introduced the main concepts of company registration, the differentiation between public and private companies, and the rules concerning share capital and dividends. The economic liberalization of the 1990s was a significant development in corporate law in India where reforms were implemented to deregulate the economy, encourage private sector development, and attract foreign investment. The Companies Act of 2013, which was passed to repeal the earlier Companies Act of 1956, brought in several new reforms in the form of simplified processes for company incorporation, operation, and closure, CSR provisions for certain companies, enhanced corporate governance standards, and provisions for firms’ non-compliance with stricter penalties compared to the previous act. The development of corporate compliance was parallel to the development of corporate law and aimed at ensuring that organizations follow the set legal and regulatory frameworks within which businesses are expected to operate. These regulatory authorities include the Securities and Exchange Board of India (SEBI) for securities and the capital markets, the Reserve Bank of India (RBI) for the banking sector and the Insurance Regulatory and Development Authority of India (IRDAI) for insurance.


A.    The Company Act, 2013 

The Companies Act of 2013 is the main legal act that governs the activities of corporations in India, their establishment, operation, and termination, with a focus on the principles of corporate governance. In particular, the Act sets out provisions that govern the formation of companies as to documents and statutory declarations. It also offers principles of corporate governance which include the recommendations on the Board of Directors in terms of structure and functioning including provisions for independent directors and audit committees for supervision. Moreover, the Act mandates companies to present and submit financial statements and annual returns to enhance the quality of financial reporting and disclosure in organizations. For instance, the Companies Act of 2013 incorporates the CSR strategy whereby some of the companies are expected to dedicate a portion of their revenues to community development initiatives and other social causes.

 Finally, the Act guides the systematic and orderly liquidation and dissolution of companies, as well as steps for settling claims and liquidation to safeguard the rights of the parties concerned. In conclusion, it can be said that the Companies Act, 2013 is an important piece of legislation that defines the legal framework for the corporate governance of companies in India and spells out guidelines that must be adhered to by all companies registered under the act.

B.    The Securities and Exchange Board of India (SEBI) Regulations

SEBI is an Indian regulatory body that looks into the securities market in the country with the responsibility of protecting investors and facilitating the growth of the market. SEBI has laid down many rules and regulations for the companies and one of them is SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 which helps in maintaining timely disclosure by the listed companies to protect the investors and help them in making informed decisions. SEBI also implemented the SEBI (Prohibition of Insider Trading) Regulations, 2015 to regulate unfair market practices and to prohibit insider trading to protect the securities market. In addition, the SEBI  (Substantial Acquisition of Shares and Takeovers) Regulations, 2011 regulates the acquisition of shares and takeovers of listed companies to protect the interests of shareholders and promote fair and transparent corporate actions. In this and many other ways, SEBI has the important responsibility of maintaining the health and efficiency of the securities market in India and the protection of investors.

C.    The Foreign Exchange Management Act (FEMA), 1999

FEMA regulates foreign exchange transactions to facilitate external trade and payments while maintaining foreign exchange market stability. It outlines the procedures for foreign investments, repatriation of profits, and cross-border transactions.


The ROC is a central administration body dealing with ministerial and administrative aspects of company incorporation and LLPs under the MCA in India. As per the provision of Section 609 of the Companies Act, the ROC is majorly responsible for registering companies and LLPs in different states and union territories as well as conducting checks and verification to ensure that these organizations comply with the legal requirements highlighted under the Companies Act of 2013. Arguably, to regulate and monitor the activities of these registered entities, the ROC sustains records of such entities and anyone is entitled to search through these records for a prescribed charge. The Central Government supervises the ROC through Regional Directors, but the overall control and direction are vested in the Central Government.

Companies need to be registered at the ROC and they help them understand some regulations and reporting by referring to other Companies, shareholders, directors and other factors on a file of company documents annually. It supports and encourages a favourable climate for the business by availing some key services, for instance, the formation of a company by issuing incorporation certificates to act as proof that a business entity exists. Companies may be registered for an indefinite time and can only cease to exist when their name is deleted from the register of companies.

The ROC can ask for further elaboration from any company and the legislation empowers the ROC to search the business premise and remove any books of accounts with prior approval from a court of law. The other procedure of winding up a company is where the Registrar of Companies initiates the process through the presentation of a petition. The ROCs’ relationship with a company is continuous due to its importance in tracking the company’s compliance with the law. After compliance with the formalities required by the legal statutes, Companies must inform the ROC of alterations in their name, objectives and any changes in their registered office. This makes it easier to review the constitution and Report regularly to check that it meets the relevant legal requirements.

A.    Annual Filings

Annual return for a company includes the filing of several accompanied forms, audited details of financial statements, audit reports, directors reports and several other statutory schedules. The common shortest process of acquiring a divorce is legally known as “No-fault divorce”. The annual return can only be filed with an audited copy of the company books of account by a Chartered Accountant employed full-time by the company. The annual return must be filed by the company within a certain period after holding its annual general meeting. However, for private limited companies, the date of the annual general meeting is important to understand the time relating to various filings that have to be submitted to the registrar of companies.

The requirement for the filing is that a company needs to file its audited financial report and the directors’ report with the ROC with an AOC-4 form with shareholding details not later than thirty days from the date of the AGM. Further, under the Companies Act of 2013, section 92 also known as the filing of Annual Returns, it is mandatory for every company to file the annual return with the ROC within 60 days from the date of conclusion of the AGM. The annual return is in the prescribed formats that include forms AOC-4 and MGT-7 along with the annexures and the attachments. AOC-4 is filed within 30 days of AGM and MGT-7 will be filed within 60 days of AGM. They are both required and address the basic facts about the company.

B.    Event-Based filings

Event-based compliances are essentially regulatory duties that have to be met by the company over and above the regular, periodic and annual compliances which have to be conducted with the ROC and other concerned statutory bodies. Such compliances are associated with particular incidents or issues, additional responsibilities, or emerging changes and challenges in an organization. This paper identifies that to meet event-based legal considerations, firms need to consider and follow the general provisions. It’s during the registration of a new business that the procedure becomes a central consideration. Yet, the Companies Act, 2013 examines the guidelines and standards of the private limited company incorporated under section 2(68) and compliance to numerous regulations at various steps. 

Event-based business compliance can be daily/weekly/monthly, yearly or sporadic legal statements or covenants that may be required by law or recommended to reduce legal issues with the legal government. The following procedures are considerably relevant to the amendments in the registered documents related to the organization: Any amendment in the registered documents associated with the organization must be submitted to the ROC and other relevant authorities. Also, company directors need to make sure that the business operates following conditions laid down in the articles of association of the company as well as the memorandum of association of the company. To reflect the best interest of the company and its shareholders, the company must function efficiently and effectively, and dismiss recklessness or legal dereliction of the duties. This includes providing relevant information to the stakeholders, various business undertakings, and the company’s financial strengths correctly.

  • Changes in the Share Capital (Form SH-7)

A company/firm must have at the minimum an authorization share capital with at least one share. It can classify shares in the following types or classes of shares including equity shares, preference shares, and sweat equity shares depending on the conditions set in the Act. The authorized share capital of a company is used to state the maximum amount of share capital of the company that can be issued and subscribed to by its members and can be increased from time to time by passing an ordinary resolution in compliance with the AOA. Companies arising under the Companies Act 2014 need to apply for a change of the authorized share capital through form SH-7, which is submitted to the Registrar of Companies to effect an increase or decrease in the authorized share capital. It should also be understood that a company cannot issue shares beyond the amount of authorised share capital, the amount up to which share capital a company may issue. The authorized capital refers to the total subscribed capital of a company, which is divided into smaller units of fixed nominal value, and the company, under an authority bestowed by the shareholders in the general meeting, may offer its shares to the public.

  • Changes in directors or key managerial personnel (Form DIR-12)

The Ministry of Corporate Affairs under the Companies Act, 2013 supported by the Companies (Appointment and Qualification of Directors) Rules, 2014, explains the processes of change in directors in respect of companies. There in fact various procedures that need to be followed when hiring a director. The first step is that a board meeting is held to inform the directors on the subject of the GM not less than 7 days before passing a resolution to call for a GM for the director’s appointment. After this, a notice is published to shareholders, directors and auditors and it contains GM’s details such as the agenda, the date, the time, and the place. This notice has to be in writing and given at least 21 clear days before the GM but, if 95% of the entitled members agree other than writing or electronically, a shorter notice can be given. At the GM, the appointment resolution is passed conditionally before waiting for the shareholders’ approval. Such notification shall be made in writing to the Registrar on or before the thirtieth day after the appointment using the DIR-12 form. 

As per the company law, DIR-12 the form related to changes in directors and managers and other employees and officers of the company have to furnish company details, director details, date of appointment/cessation, DIN no and DSC no wherever necessary in case of change in directors and manager and other employees and officers of the company. Documents that may be attached include the annexure for appointment cases, notice of resignation or proof of the commission of an act which warrants removal or resignation whichever is applicable in addition to any other documents which may be filled in at the discretion of the Director.

  • Allotment of shares (Form PAS – 3)

Section 39 (4) and section 42 (9) of the Act of Companies alongside rules 12 and 14 of the Companies (Prospectus and Allotment of Securities) Rules, 2014 has set some prerequisites that envisage that every time a firm offers shares or securities through MCA Portal, a particular e-form named PAS-3 has to be filed with ROC. All these details must be provided at the relevant place of this form, including the following particulars: 

‾    The Corporate Identification Number (CIN)

‾    The class, number and face value of the securities to be allotted, whether in cash or otherwise, 

‾    The total number of securities to be allotted and the dates of which, 

‾    Any shareholders’ resolution and the SRN of Form No. MGT-14, 

‾    The manner of Furthermore, the form must indicate information that pertains to the allotment, consideration details bonus shares and information relating to private placement.

Furthermore, it should specify the details of the company’s capital and debt structure after the allotment and highlight if a list with all the details of the allottees is included as a part of the attachment. 

  • Event Based Compliance as per Company Act, 2013

Section 4 describes the various event-based compliances needed to be done by different types of existing companies according to the rules, provisions, and regulations of the Indian Companies Act, 2013, SEBI, RBI FEMA and other Legal Acts & statutes. “TrustTech” is one of the leading corporate law firms in Chennai with a wide network across India; its lawyers are well-experienced in corporate, company, and secretarial laws, apart from IP laws. They help and advise corporations as to the proper implementation of their respective event-based compliances with the regulatory and government bodies to ensure compliance accurately and within the necessary time frames.

Depending on the type of company and its specific business activities, the following event-based tasks, events, or business activities may require reporting or compliance. Depending on the type of company and its particular business activities, the following event-based tasks, events, or business activities may require reporting or compliance.


  • Quoram: Two members qualify the membership base of any quorum capable of performing the corporate business. Where there be a Committee meeting of the members, lawfully convened and attended by the requisite quorum, any such Committee may exercise all or any of the authorities, powers and discretions for the time being vested in or exercisable by the Committee. 
  • Frequence: Board meetings can be held regularly or at any time when certain conditions call for the action. In particular, the initial meeting of the board of directors of a company is required not later than thirty days after incorporation. For the One Person Company, the Small Company, and the Dormant Company, there must be at least one board meeting held in the first half, and another in the second half of the twelve months but not less than ninety days apart. For other companies, the above key provisions have to be complied with, and they are required to hold at least four board meetings in a year and the interval between two consecutive meetings cannot exceed 120 days.
  • Minutes of the meetings: Board meeting minutes are formal notes of the meeting that contain records of the actions taken by the directors. They should be kept with a lot of details and normally contain, the date, time and place of the meeting, directors and any other people present, whether there was a proper quorum, what was discussed, and what resolutions were passed and decisions made together with members declaration of interest and the date of the next meeting. It is also important to have the signed minutes forwarded to the next board meeting and approved along with being signed by the chairman so that they can be seen to be an accurate record.
  • Committees: The proper management of a board is to create committees for specific functions and responsibilities to strengthen the governance and functioning. There are usually key standing committees for example the Audit Committee with the role of overseeing such affairs as financial reports, controls, and audits; the Nomination and Remuneration Committee with the function of determining board appointments and policies to do with remunerations; Risk Management Committee which has the responsibility of identifying and managing risks; and finally the Corporate Social Responsibility Committee charged with the responsibility of formulating and implementing the company’s CSR strategies. Every committee has working documents referred to as charters which communicate the responsibilities, members, and meetings’ schedules. There are usually formal presentations by agency or committee staff members at the meetings and the committees convene at least three times per year or more often if needed to discharge their functions adequately.


General meetings are pivotal events in the corporate governance framework, providing shareholders with an opportunity to engage with the management and make key decisions about the company's future. There are two main types of general meetings: the Annual General Meeting (AGM) and the Extraordinary General Meeting (EGM).

  • Annual General Meeting (AGM): AGMs are mandatory annual meetings between the shareholders and the directors, that give shareholders a chance to hear reports from the company and to put questions to the directors. The usual activities of an AGM are to: 

‾    Approve the financial statements for the previous year and reports; 

‾    Declare dividends; 

‾    Elect or re-elect directors; 

‾    Appoint or re-appoint auditors and fix their remuneration; and

‾     Transact such other business as is appropriate and included in the notice of the meeting.

  • Extraordinary General Meeting (EGM): EGM- Shareholders' meeting, other than an AGM, presented by the corporation) to talk about pressing or exclusive business which may not wait until the subsequent AGM Generally, the board of directors may convene EGMs or they must do so upon the request of a certain percentage of shareholders, according to the company's bylaws and relevant regulations. EGMs are usually called to obtain approval for key decisions such as mergers and acquisitions, changes to the company’s constitution, new shares or securities issuance, or addressing time-sensitive corporate governance matters.


The purpose of a statutory audit is to ensure that the entity accurately represents its financial position by examining information such as books of accounts, bank balances and financial statements Both public and private limited companies are required to be regulated road calculations. Regardless of the nature of the business or the currency used, the annual audit of these companies should be audited annually. In contrast, a limited liability partnership (LLP) is required to be legal only if its turnover exceeds 4 million or its capital issued exceeds 2.5 million in any financial year accountability. Every company and its directors must appoint auditors at the first board meeting within 30 days from the date of incorporation. At each Annual General Meeting (AGM), the shareholders of the company must elect an auditor, who shall hold office from one AGM until the conclusion of the next AGM As per the Companies (Amendment) Act, 2017, auditors can be appointed for a maximum of five consecutive AGMs, their appointments need not be approved at any AGM but auditors cannot be appointed for more than one or two consecutive terms in an individual partnership in.


Corporate governance compliance as per the SEBI LODR Regulations is mandatory in India for all the listed companies and constitutes a vital part of the Indian company law for protecting the shareholder's and investors' interests. These rules, enacted by SEBI, provide measures for corporate governance in India by imposing high standards to ensure more investor protection and inspection of the security market. Another area that is critical when looking at corporate governance compliance under SEBI, and LODR Regulations is that of the board of directors. The regulatory body that oversees companies and operations in India, SEBI, has laid down certain rules that have to do with the makeup of the board of a company that is listed; these rules include the requirement that a listed company must have an independent board, and there must be a certain number of such directors as per the SEBI guidelines. They bear the responsibility to monitor the actions of the management, to bring in an impartial assessment and, to protect the interest of the small investors or minority shareholders.

In addition, SEBI mandates various committees of the board to implement corporate governance in the listed companies. Some of them include the Audit committee whose role is to oversee issues concerning financial reporting and internal control, the Nomination and Remuneration committee whose major responsibility is to assess, review and recommend matters relating to the appointment of directors and the compensation policies that have been implemented within the organization, and lastly, the Stakeholders Relationship Committee which is charged with the responsibility of handling complaints and assuring effective communication between the organization’s stakeholders.


In the Indian context of company regulation, violation of the provisions of the act entails certain sanctions that may be levied against organizations as detailed under the Companies Act 2013, and as enforced by relevant bodies such as the Ministry of Corporate Affairs (MCA) as well as the National Company Law Tribunal (NCLT).

Penalties for non-compliance encompass a range of consequences: Penalties for non-compliance encompass a range of consequences:

  • Certain rules are prescribed through legislation, and the failure to observe them results in monetary penalties being levied against the errant companies. These fines range from one cent to a higher amount of monetary value according to the extent and recurrence of the non-compliance.
  • A common consequence of failing to meet regulatory requirements or standards is legal action which can be brought by governmental agencies or by individuals through lawsuits. Such actions can entail further operational expenses, revenue loss, an undesirable reputation among clients and partners, legal vicarious liability for damages, and the risk of punitive damages.
  • Failure thereof can lead to the removal of directors from standing as directors of any company for a specified period. The stakes are high for the participants in these disputes which can lead to losses of employment and tarnishing of images.
  • Persistent violation of statutory requirements automatically makes the company an issue for regulatory authorities to withdraw registration. This action directly slows down the functionality of the business throughout the organization.
  • The non-compliance penalties can be publicized since the act of non-compliance is a violation punishable by law; the publicity affects the reputation of the company and the trust stakeholders have for the company. Likely to face the following: Implementation of the law diminishes business prospects and investors’ confidence.
  • The Companies Act, 2013 has made it unlawful for any individual or competitor to submit fake data about their organization and in genuine cases of infringement, charges may be brought against individuals or companies. Administrative consequences may include fines and removal of licenses or permits as well as imprisonment of the people of responsibility.

To reduce the threats that emanate from non-compliance, organizations need to abide by all the legal regulations to avoid incurring fines, document themselves properly, and adhere to compliance procedures. Conducting compliance audits frequently and addressing necessary measures are crucial for effective business activities’ proper functioning cooperation with all legal requirements.


In conclusion, corporate law and observance in India come under a broad legal framework that includes,  the Companies Act, SEBI Regulations, FEMA and IBC. This has made it necessary for businesses to comply with these regulations so as not to be penalized by the law, maintain investor confidence and uphold ethical standards of conduct in business activities. In the history of Corporate Law in India, its development has been influenced by economic and social changes from the colonial period up to the liberalization and globalization era. Some key legislations such as the Companies Act 2013 & SEBI guidelines regulate corporate governance reporting/disclosure thereby making the corporate world transparent/ accountable. The ROC, as it is commonly referred to, monitors legal compliance through oversight and facilitates companies’ registration and regulation. It is mandatory for the survival of companies to follow regulatory requirements through annual fillings as well as other event-based compliances to maintain transparency. 

Board meetings and general meetings are platforms that allow shareholders to participate in decision-making whereas statutory audits ensure that financial reporting is done accurately. 

Therefore, corporate governance compliance under SEBI and LODR Regulations is vital for listed companies aimed at protecting shareholder interests and maintaining market integrity. The importance of adherence to regulatory standards cannot be overstressed since non-compliance may result in severe penalties, litigation costs or a damaged reputation. 

To do this they need to carry out regular compliance audits, effectively document their procedures and meet legal conditions. In order words, corporate law plus compliance make up the pillars of a strong regulatory framework which nurtures transparency, accountability and ethical behaviour within the Indian corporate sector. This will enhance their credibility while promoting investor protection thereby contributing significantly towards the overall growth of the economy.

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