The Amending Act of 1781 was passed to exempt the actions of public servants from the Supreme Court's jurisdiction and address the conflicts arising from the Regulating Act.

While it attempted to subordinate the Governors of Madras and Bombay, the provisions were vague (allowing exceptions for 'emergencies'), leading to continued independent actions by these Governors.

Instead of annual elections for all, the Act mandated that Directors hold office for four years, with one-fourth of the number being re-elected every year.

A Secret Parliamentary Committee reported in 1772 that servants of the Company, including Clive, had received large sums and jagirs, necessitating regulation.

Servants of the Company who engaged in corruption and private trade, returning to England with heaps of wealth and living lavishly, were nicknamed 'English Nawabs'.

The rules and regulations made by the Governor General in Council had to be registered with the Supreme Court to be valid.

It was the first attempt by the British government to centralize the administrative machinery in India and dictate the form of government for the Company's possessions.

The Act did not clearly define the jurisdiction of the Supreme Court or its relationship with the Governor General in Council, leading to severe conflicts between the judiciary and the executive.

They could be removed only by the British Monarch (King or Queen) upon representation from the Court of Directors, providing them some security of tenure.

The Act provided that the Governor General and the members of his council were to hold office for a term of five years.