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Unit 1: Nature of the Companies Act, 1956

To ensure better management of companies, the Central Government accord approval for Notes
the appointment and reappointment of persons as Managing Directors, Whole-time
Directors or Managers of a public limited or private limited company which is a subsidiary
of a public limited company, under Section 269 read with Section 388 of the Companies
Act.
In 1988, the Government dispensed with the requirement of the approval for appointment
of managerial personnel in respect of cases which fulfill the conditions as prescribed in
Schedule XIII of the Act.
This Schedule can be modified to suit the changing needs of the time and circumstances in
keeping with this policy of regulation by exception.

1.5 Keywords

CLB: Section 10 E enables the Central Government to constitute the Board of Company Law
Administration (CLB).

Officer: Section 2(30) provides that the term ‘Officer’ includes any director, manager or secretary
or any person in accordance with whose directions or instructions the board of directors or any
one or more of the directors is or are accustomed to act.
SEBI: Section 2(45B) provides that the Central Government may, by notification in the Official
Gazette, establish the Securities and Exchange Board of India (in short - SEBI) for the protection
of investors in securities.
The Central Government: The Central Government is the supreme authority responsible for the
administration of company law.

1.6 Review Questions

1. What is the extent of the Companies Act, 1956?
2. Enumerate the companies to which the Companies Act, 1956 is applicable.

3. Enumerate the associations to which the Companies Act, 1956 is not applicable.
4. Describe the scheme of the Companies Act, 1956.
5. Outline the set up of Company Law Administration.
6. What are the different authorities by which the administration of the Companies Act, 1956
is carried out?
7. Write an explanatory note on Company Law Board.
8. Discuss about “Societies registered under the Societies Registration Act, 1860.”
9. What do you mean by Official Liquidator.

10. Write short notes on:
(i) Public Financial Institutions
(ii) SEBI

(iii) Advisory Committee
(iv) Meaning of (a) officer, (b) relative, (c) officer who is in default.

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