CORPORATE GOVERNANCE MAY NOT ENSURE MORE PROFIT COMPANY

Arvind Alopiprasad Pardeshi Mr., Rajiv Gandhi School of Intellectual Property Law, IIT, Kharagpur

Abstract

The word company is defined in Companies Act, 1956. The definition of company is subject to the other definitions given in other provisions of the Act for the limited purposes stated therein. In order for a company to exist, it has to be set up and registered with the appropriate company authority. Once registered; the company is regarded as a legal person, with legal rights and obligations. A company’s existence and organization are continuously scrutinized through a well-established set of rules, laws, and policies that govern the way in which the company is run and controlled. This is known as corporate governance. Companies can be private or public. Public companies, under certain circumstances, can choose to list their shares on a stock exchange or alternative investment markets. The corporate governance rules apply to every company, whether private or public. However, the larger and more complex a company is, the more closely its decisions are scrutinized. For multinational companies corporate governance has extended internationally, with rules and regulations that cooperate at cross-border levels. Corporate governance exists to protect the shareholders of a company. It also aims to preserve the reputation of a company and its business against any fraudulent acts committed by its directors and officers.