Regulating act was incorporated by the parliament of the British government for administering and keeping check on East India Company rules and affairs. It was previously known as the East India Company Act 1773, as the main motive behind passing the act is to regulate the activities of the company. Controlling the mismanagement as well as the problem of dual systems in the lands of Bengal were crucial reasons for the incorporation of the regulating act of 1773.

Regulating act: overview 

Regulating act incorporation in India was the first step that was taken by the British government parliamentary system for controlling and regulating the management of East India company affairs. The administrative and political function of the government lay in passing the corporate regulation act for the first time in the history of India. The Governor of Bengal was provided a designation of Governor General in lands of Bengal. In British governments, Lord Warren Hastings was given the authority of the first governor general who was designated as the governor-general of Bengal for management of affairs of the dual governance system. The regulating act prohibited the labour and employees of the company to engage in any private or other jobs. The servants of the group of east India further passed it to restrict the acceptance of bribes. The Regulation act laid the foundation for the establishment of the Supreme Court in India.

The first regulating act 1773 

•  Establishment of the East India Company by the British government has led to the incorporation of various corporate laws. The first regulating act for managing the affairs of the East India Company was framed as the regulating act of 1773. 
• The British government incorporated it. It was the first intervention in the corporate and company territorial affairs of India by the British governments. 
• It was passed due to increases in the misgovernance in the Bengal land of the company. It resulted in the bankruptcy and financial crisis that resulted in governments taking governmental loans. 
• The provision of the company concluded the commissioning of the governor-general in the lands of Bengal authorised as governor-general of Fort William. It has managerial powers over the different administrations of Madras.
•  The Governor General was provided with four councils for casting votes but it could not veto against any decision. It was the major defect of the regulating act, 1773.
• Under this Regulating act 1773 the Supreme Court was being established. 
• Subordinates position of madras and Bombay was also being stated

Regulating act 1773: reasons 

The Regulating act 1773 was incorporated with the objectives to address the problem of dual system governance and the ill administration and affairs of the East India Company. Several other reasons can be understood as the foundation for passing the regulation act 1773 by the British parliament of India. The East India Company was struggling through a financial crisis and had been suffering from bankruptcy. It had taken a loan from the British government for 1 million pounds. Furthermore, there were also allegations of corruption and bribery on the officials of the company. Dual governance highlights that in Bengal two governmental rights were in place: first Diwani rights by the company, and second nizamat rights by the Nawab of the company. Both governmental rights were the main reason for the uplifting of clashes in Bengal. The need for a regulating act was felt most due to the increased lawlessness in Bengal as well as in the East India Company. The people who suffered most due to the mismanagement and dual governance system were the farmers and the general population.

Conclusion

Regulating act 1773 was the first act that was passed by keeping the needs and regulations of the company in mind. It was formerly known as the East India Company act 1772, but later on, the name was changed, as it possesses various regulating qualities that can directly address the problem of dual governance and mismanagement of the East India Company. The act further resulted in the transformation of the corporate entity to a political institution that is semi-sovereign. The regulating act was passed to overcome the hurdles raised from the dual system governance that raises many complex complaints.