Economic life is fundamental in today’s scenario and has a determining influence upon the social and cultural values of individuals. Economic conditions determine all other processes of life to a considerable extent. In earlier societies when the economic resources were scarce, survival of the fittest was the rule. That rule revisits the economic conditions of a country time and again. Economic conditions in a country are influenced by the corresponding legal structure. Law & Economics are intertwined to the extent of determining the extent of economic progress of a nation. With globalization becoming the omnipresent phenomenon, ignorance with regard to having a forward looking law for the current economic scenario is devoid of all good sense and logic. Corrupt corporate practices may rob a nation of the economic progress made by it and thus reposition of trust of shareholders become an essential phenomenon for sustainable economic development of a country. The macroeconomic impact of activities and decisions of corporate houses is measurable in terms of the value they create for their shareholders. This in turn is dictated by efficient corporate policies which are regulated by strong legal measures. In this regard, a report on Company Law prepared by a panel headed by Dr. J.J. Irani. Chapter X of the Report deals with mergers and acquisitions gains importance. The purpose of the present paper is to compare the existing as well as proposed law pertaining to mergers in light of the concept of corporate governance. The paper highlights the importance of mergers and acquisitions as an emerging economic phenomenon and the proposed legal structure, which would be helpful in determining economic accountability of corporations.  

The recent report on Company Law prepared under Dr. JJ Irani, has recommended for the simplification of corporate laws in the country. This is to reduce the uncertainty and ambiguity in relation to corporate activities in the country. Simplification of laws would lead to greater accountability and transparency on the part of a business entity. This could be translated in the way of higher shareholder value, an improved reputation for the company in a market, sustainability of economic operations in a reliable manner, easy availability of credit, improved status as a multinational, etc. All this means that there are two conflicting interests in the operation and governance of corporations. These are the interest of the shareholders and stakeholders on the one hand and the interests of the owners and promoters of the business on the other. Generally it is believed that higher profits mean longevity for the business, but consider the functioning of a corporation in the long run. Considerations of ethicality, morality and sustainable profits should weigh heavily in the minds of everyone. Systematic and simplified operations of a business make up an efficient economic order in the country.