Question

The Companies Act, 1956 is of no use to companies registered under it in India.

• A. True
• B. False

Answer 1

The correct option is B False

This statements is False because of the following reasons:

(i) The Companies Act,1956 which constitutes the company law in India, came into force with effect from 1st April,1956.

(ii) It contains 658 sections, XIV schedules, a number of rules and regulations and a number of forms.

(iii) This law is based largely on the report of the Company Law Committee, 1952 and it also follows closely the new changes introduced in the British Company Law by the British Companies Act, 1948.

(iv) The main objective of the Companies Act, 1956 is to protect the interests of a large number of shareholders and creditors of the company.

(v) It is also aimed to develop the corporate sector on a healthy line.

(vi) The economic and social policies of the government were to be fulfilled and achieved through this Act.

(vii)All companies intending to do business in India, have to be registered under the Companies Act, 1956.

(viii)They have to strictly follow the provisions laid down in the Act.

(ix)Hence, it cannot be said that the Companies Act, 1956 is of no use to companies registered under it in India.