Resource Center 
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| Resource Center |
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| Regulatory Requirements |
Once an entrepreneur has taken all the important decisions relating to starting a business, he/she has to take into account the basic regulatory requirements which are to be followed for setting up the organisation. The most important regulation is the Companies Act, 1956, which regulates all the affairs of a company. It contains provisions relating to the formation of a company, powers and responsibilities of the directors and managers, raising of capital, holding company meetings, maintenance and audit of company accounts, powers of inspection and investigation of company affairs, reconstruction and amalgamation of a company and even winding up of a company. The Ministry of Corporate Affairs, earlier known as Department of Corporate Affairs under Ministry of Finance, is primarily concerned with administration of this Act as well as other allied Acts and rules & regulations framed there-under.
The next important regulation relates to environment. The environmental regulatory requirements envisage a wide legislative framework covering every aspect of environment protection like air, water, noise, forest conservation, wildlife protection, etc. Also, separate set of laws and rules for emission of hazardous wastes have been enacted. The Ministry of Environment and Forests (MoEF), is the nodal agency for regulating all such environmental aspects. It undertakes conservation & survey of flora, fauna, forests and wildlife; prevention & control of pollution; afforestation & regeneration of degraded areas. Every industry has to abide by all such guidelines and parameters for environmental protection because only this will ensure its sustainable progress and growth.
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| Environmental Regulations: |
A good environment is a constitutional right of the Indian Citizen. Environmental Protection has been given the constitutional status. Directive Principles of State Policy states that, it is the duty of the state to 'protect and improve the environment and to safeguard the forests and wildlife of the country'. It imposes Fundamental duty on every citizen 'to protect and improve the natural environment including forests, lakes, rivers and wildlife'.
In India, the Ministry of Environment and Forests (MoEF) is the apex administrative body for:- (i) regulating and ensuring environmental protection; (ii) formulating the environmental policy framework in the country; (iii) undertaking conservation & survey of flora, fauna, forests and wildlife; and (iv) planning, promotion, co-ordination and overseeing the implementation of environmental and forestry programmes. The Ministry is also the Nodal agency in the country for the United Nations Environment Programme (UNEP). The organizational structure of the Ministry covers number of Divisions, Directorate, Board, Subordinate Offices, Autonomous Institutions, and Public Sector Undertakings to assist it in achieving all these objectives.
Besides, the responsibility for prevention and control of industrial pollution is primarily executed by the Central Pollution Control Board (CPCB) at the Central Level, which is a statutory authority, attached to the MoEF. The State Departments of Environment and State Pollution Control Boards are the designated agencies to perform this function at the State Level.
Central Government has enacted several laws for Environmental Protection:-
- The Environment (Protection) Act, 1986, is the umbrella legislation which authorizes the Central Government to protect and improve environmental quality, control and reduce pollution from all sources, and prohibit or restrict the setting and /or operation of any industrial facility on environmental grounds. According to the Act, the term "environment" includes water, air and land and the inter- relationship which exists among and between water, air and land, and human beings, other living creatures, plants, micro-organism and property. Under the Act, the Central Government shall have the power to take all such measures as it deems necessary or expedient for the purpose of protecting and improving the quality of environment and preventing, controlling and abating environmental pollution.
- Acts relating to Water Pollution, are comprehensive in their coverage, applying to streams, inland waters, subterranean waters, and seas or tidal waters. These acts also provide for a permit system or 'consent' procedure to prevent and control water pollution. They generally prohibit disposal of polluting matter in streams, wells and sewers or on land in excess of the standards established by the state boards.
- Acts relating to Air Pollution, are aimed at prevention, control and abatement of air pollution.
- Acts relating to Forest Conservation, provide for the conservation of forests and for matters connected therewith or ancillary or incidental thereto.
- Acts relating to Wildlife Protection, provide for the protection of wild animals, birds and plants and for matters connected therewith or ancillary or incidental thereto with a view to ensuring the ecological and environmental security of the country.
- Acts relating to Biological Diversity, provide for conservation of biological diversity, sustainable use of its components as well as fair and equitable sharing of the benefits arising out of the use of biological resources and knowledge associated with it.
- Acts relating to Public Liability Insurance, provide for public liability insurance (immediate relief) to the persons affected by accidents occurring while handling any hazardous substances.
- Rules relating to Noise pollution, aim at controlling noise levels in public places from various sources like industrial activity, construction activity, generator sets, loud speakers, public address systems, music systems, vehicular horns and other mechanical devices having deleterious effects on human health and the psychological well being of the people.
- Rules relating to Management of Hazardous Substances, aim to control the generation, collection, treatment, import, storage, and handling of hazardous waste. The term "hazardous substances" include flammables, explosives, heavy metals such as lead, arsenic and mercury, nuclear and petroleum fuel by-product, dangerous micro organism and scores of synthetic chemical compounds like DDT and dioxins.
The Central Pollution Control Board (CPCB) has developed National Standards for Effluents and Emission under the statutory powers of the Water (Prevention and Control of Pollution) Act, 1974 and the Air ( Prevention and Control of Pollution) Act, 1981. These standards have been approved and notified by the Government of India, Ministry of Environment & Forests, under Section 25 of the Environmental (Protection) Act, 1986. Besides, standards for ambient air quality, ambient noise, automobile and fuels quality specifications for petrol and diesel. Guidelines have also been developed separately for hospital waste management.
Also, an Environmental Information System (ENVIS) has been established as a plan programme and as a comprehensive network in environmental information collection, collation, storage, retrieval and dissemination to varying users. The focus of ENVIS since inception has been on providing this environmental information to decision makers, policy planners, scientists and engineers, research workers, etc all over the country. ENVIS has developed itself with a network of participating institutions/organisations. A large number of nodes, known as ENVIS Centres, have been established in this network to cover the broad subject areas of environment with the focal point at the Ministry of Environment and Forest. These Centres have been set up in the areas of pollution control, toxic chemicals, central and offshore ecology, environmentally sound and appropriate technology, bio-degradation of wastes and environment management, etc.
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| Companies Act: |
In India, the Companies Act, 1956, is the most important piece of legislation that empowers the Central Government to regulate the formation, financing, functioning and winding up of companies. The Act contains the mechanism regarding organisational, financial, managerial and all the relevant aspects of a company. It empowers the Central Government to inspect the books of accounts of a company, to direct special audit, to order investigation into the affairs of a company and to launch prosecution for violation of the Act. These inspections are designed to find out whether the companies conduct their affairs in accordance with the provisions of the Act, whether any unfair practices prejudicial to the public interest are being resorted to by any company or a group of companies and to examine whether there is any mismanagement which may adversely affect any interest of the shareholders, creditors, employees and others. If an inspection discloses a prima facie case of fraud or cheating, action is initiated under provisions of the Companies Act or the same is referred to the Central Bureau of Investigation.
The Companies Act is administered by the Central Government through the Ministry of Corporate Affairs and the Offices of Registrar of Companies, Official Liquidators, Public Trustee, Company Law Board, Director of Inspection, etc. The Registrar of Companies (ROC) controls the task of incorporation of new companies and the administration of running companies.
The Companies Act, 1956 has been amended from time to time in response to the changing business environment. These amendments include:-
- The Companies (Amendment) Act, 2000
- The Companies (Amendment) Act, 2001
- The Companies (Amendment) Act, 2002
- The Companies (Amendment) Act, 2006
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