Manag., January-2017-Q49
- Option : A
- Explanation : Dr. J.J. Irani Committee Report on Company Law, 2005 The Government of India constituted an Expert Committee on Company Law on 2nd
December 2004 under the Chairmanship of Dr. J.J. Irani. Set up to structurally evaluate the views of several stakeholders in the
development of company law in India in respect of the concept paper promulgated by the Union Ministry of Company Affairs, the
J.J. Irani committee has made suggestions to reform and update the basic corporate legal framework essential for sustainable economic
reform. The report has taken a pragmatic approach keeping in view the ground realities and has sought to address the concerns of all
the stakeholders to enable the adoption of internationally accepted best practices.
Recommendations of the J.J. Irani Committee: Some of the most significant recommendations of the Irani committee are: > One-third of the board of a listed company should comprise independent directors. > Allow pyramidal corporate structures, that is a company which is a subsidiary of a holding company could itself be a holding company. > Give full liberty to the shareholders and owners of the company to operate in a transparent manner. > The new company law should recognize principles such as ‘class actions’ and ‘derivative action’. There are proposals to devise an exit option for shareholders who have stayed with a company and not participated in a buy back scheme implemented earlier. > Introduce the concept of One Person Company (OPC) as against the current stipulation of at least two persons to form a company. > Allow corporations to self-regulate their affairs. > Mandate publication of information relating to convictions for criminal breaches of the Companies Act on the part of the company or its officers in the annual report. Provide stringent penalties to curb fraudulent behaviour of companies. > Disclose proper and accurate compilation of financial information of a corporation.
