Section 166(2) of the Companies Act 2013; Protection of Stakeholders or Primacy of Company

Abstract

The provision for protection of stakeholders is a mere eye wash and does not actually protect the interest of the Stakeholders. The provision 166(2) is cleverly worded and imposes a good faith duty of much higher magnitude towards the company while it only insists with the compliance of a best interest standard for the protection of the shareholders.