Dual Control System: It established the dual system of control by the British government and the East India Company.

The Company became a subordinate department of the State and its territories in India were termed ‘British possessions’.

However, it retained the control of commerce and day-to-day administration.

Court of Directors and Board of Control Established:

A Board of Control was formed to exercise control over the Company’s civil, military and revenue affairs. It consisted of:

The chancellor of exchequer

A secretary of state

Four members of the Privy Council (appointed by the Crown)

The important political matters were reserved to a secret committee of three directors (Court of Directors) in direct touch with the British government.

Governor-General and Commander-in-Chief: The council of governor-general was reduced to three members including the commander-in-chief.

In 1786, Lord Cornwallis was granted the power of both the governor-general and the commander-in-chief.

He was allowed to override the council’s decision if he owned the responsibility for the decision