India is changing. India has already positioned itself into the world as a superpower of future. India’s economy is growing rapidly than any other developing countries in the world. Business in and with India is the most important point in the business-itinerary of any top businessman around the world. Understanding the trend, Indian government has brought many changes (positive ones) in the business world. And Corporate Governance is one of them.
Importance of Corporate Governance in India
An organization with good corporate governance accumulates a higher level of confidence from the shareholder of the company. Independent directors of the company contribute to instill a positive outlook of the company across the financial market and positively influence price of the share. Across the world, Corporate Governance is undoubtedly one of the most important criteria for foreign institutional organizations and companies to decide which company they want to invest in. Corporate Governance in India put emphasize on the functions of audit and finances which comes with legal, moral and ethical implications for both businesses and its impact on shareholders. According to Indian Companies Act 2013 introduced various innovative measures to appropriately balance legislative and regulatory reforms for the growth of the enterprise and to increase foreign business and investment, keeping in mind the intricacies of international practices. The rules and regulations associated with corporate governance are the measures which help to increase of the involvement of the shareholders decision making ability and introduce transparency in business. This facility ultimately safeguards the interest of the society and most importantly shareholders. Corporate Governance not only safeguards stakeholders’ interests but also help to foster the economic progress of a country.
Role of Business and Corporate Law in Mergers & Acquisitions
When it comes to mergers & acquisitions, SEBI is really cautious about implementing the various rules and regulations pertaining to Corporate Business Law. SEBI’s Takeover Code by the Takeover Regulations Advisory Committee (TRAC) has been laid to overhaul the oft-amended and improper complex set of norms that govern takeovers of Indian listed companies. SEBI’s informal guide to the case of Bharti Airtel advised that depository receipts such as ADRs/GDRs will not attract the open offer requirements. The Code was unexpectedly amended shortly thereafter to clarify that holders of ADRs/GDRs will be obligated to make an open offer if only they are entitled to exercise the voting rights under the depository agreement.
Why do we need good corporate law firms in India
Yes, it is really important to have a Business Corporation Law to strengthen the foundation of business transaction of India. However, it is also important to have Business Law Firms that will ensure the ethical business practice across the country. The role of a good legal firm is to offer a hassle-free business formation, proceedings and lawsuits. Starting from basic compliance issues to complex lawsuits- everything should come under the work of a law firm. The majority of small business owners have opined that business law firms play a major role in their business proceedings. The role of law firms are countless – collecting and signing documents, procedures of setting-up of new business and the headache of registering a company.
Therefore, it is utmost important to have the support of or service of a business law firm at the time of forming a company.