This Act of the British Parliament is known as the Charter of the British East India Company. It was passed on August 7, 1793, during the Second Anglo-Mysore War, and granted the British East India Company a Charter of Incorporation, a government-issued licence to trade. The Charter stipulated that the Company should be governed by a Governor and Company of Adventurers (a Board of Directors) and that the Company should be subject to the authority of the British East India Company in all respects. It also stipulated that the Company should have a share capital of 1.2 million pounds and that each share was to be valued at £100.

Charter Act 1793

The Charter Act 1793 established the Company’s trade monopoly with India. It expanded the scope of the Supreme Court’s jurisdiction in India. They could recruit the members of the Civil Service as magistrates, scavengers for the presidency towns, and could prohibit the sale of alcohol without a licence.

The British Charter Act of 1793 was the attempt by the British government to regulate the affairs of the East India Company, which had acquired great power and influence in the Indian subcontinent since its first voyage in the early 17th century. The Act was the culmination of a series of parliamentary debates and discussions on the future of the Company. The Act also widened the scope of British territories in India, which would later become the United Provinces, the predecessor of modern-day India. The British Charter Act of 1793 was the first step in the process of nationalisation of the British East India Company. The Act was the result of a long campaign by the owners of the Company to reform its government and improve its performance. The 1793 Act was the first step in that process and set a framework for further reform.

Provisions of the Act

This Charter Act of 1793 extended the company’s trading privileges for another twenty years.

• The corporation was required to pay the British government 5 lakh pounds annually after paying essential expenses, interest, dividends, salaries, and other charges from the Indian income
• The Governor-General, governors, and commander-in-chief needed royal approval to be appointed
• The company’s senior executives were forbidden from leaving India without permission
• If they leave without permission, it was considered a resignation sign
• Individuals and corporate personnel were permitted to trade in India under the Company’s licence
• The ‘privilege’ or ‘country trade’ licences permitted opium to be exported to China
• The revenue administration was separated from judicial functions, resulting in the abolition of the Maal Adalats, or revenue courts
•  Members of the Home Government were supposed to be paid out of Indian income, which they were until 1919

Features of the Charter Act of 1793

1. This Act allowed the Company to continue its control over British territories in India.
2. The Company’s trade was to be continued for the next 20 years.
3. This Act clearly stated that all the political and administrative functions of the Company would be on behalf of the British government.
4. Dividends of the Company were allowed to be raised by 10%.
5. The Governor-General was given exemplary powers, and in some situations, it could override the council’s decisions.
6. The Governor-General of Bengal was given the authority over the governor of Madras and the governor of Bombay.
7. While the Governor-General was absent from Bengal,  he (the Governor-General of Bengal) could appoint a Vice President from among the council of his civilian members.
8. The composition of the Board of Control had changed. The Board was composed of a President and two junior members, which is not that the members should be of the Privy Council.
9. The salaries of the employees and the Board of control were now charged to the Company.
10. Finally, after the expenses, the Company had to pay the British government Rs. 5 Lakhs annually from Indian revenue.
11.  The top-most executives in the Company were given the opportunity to leave at will, but if they left the Company without proper documentation, it was considered a resignation.
12. This Act divided the revenue administration functions from the judicial functions, leading to the disappearance of revenue courts.

The British Charter Act of 1793 was the first step nationalising the British East India Company. The Act resulted from a long campaign by the Company’s owners to reform its government and improve its performance. 

It was also a response to the outcry against the Company’s aggressive policies in India. The 1793 Act was the first step in that process and set a framework for further reforms.

Conclusion

By establishing British India’s constitutional status, the Charter Act of 1793 can be understood in terms of its function in affirming the Crown’s sovereignty over British India and so understanding the relevance of the Charter Act. It also broadens the range of options available to British merchants in private trading.