Fundamentals of

Company Law
Prof. V. Shyam Kishore
VIT School of Law, VIT University, Chennai
What is a Company?
• A voluntary association of persons formed for
the purpose of doing business.

• S. 2(20) CA, 2013: Company means a company

incorporated under this Act or under any
previous company law.

Prof. V. Shyam Kishore VIT School of Law

Nature of Corporate Form
• Independent corporate existence. (Salomon v.
Salomon & Co. Ltd.)
• Limited liability.
• Perpetual succession.
• Separate property.
• Transferable shares.
• Capacity to sue and be sued.

Prof. V. Shyam Kishore VIT School of Law

Lifting of the Corporate Veil
• Thus a company has been provided with a
veil to shield the individuals behind the
company.

• However under certain circumstances, if

the veil is used for a wrongful purpose,
this veil can be lifted.

Prof. V. Shyam Kishore VIT School of Law

Circumstances for lifting the
Corporate Veil include:
• Reduction in membership.
• Misdescription of company name.
• Fraudulent conduct of business.
• Determination of ‘enemy’ character.
• Benefit of revenue.
• Govt. companies.

Prof. V. Shyam Kishore VIT School of Law

Types of Companies:
• Limited company (by share or by guarantee)
• Unlimited company.
• Government company.
• Foreign company.
• Private company.
• Public company.
• One person company.

Prof. V. Shyam Kishore VIT School of Law

Key Players: Promoters:
• No clear definition.
• A person who undertakes to form a company, sets it
going and who takes the necessary steps to accomplish
that purpose.
• Does not include people acting in professional capacity
though!
• Generally secure management of the company once it is
incorporated.
• Fiduciary position. Cannot make profits at the expense of
the company.

Prof. V. Shyam Kishore VIT School of Law

Key Players:
• Members & shareholders
• Board of Directors.
• Directors.
• Managing Director / CEO.
• Manager.
• Chairman.
• Whole-time director (WTD)/ Executive- director.
• Non-executive director.
• Independent director.
• Nominee director.

Prof. V. Shyam Kishore VIT School of Law

Key Players: Key Managerial
Persons (KMP):
• S. 2(51) CA 2013: KMP in relation to a
company means:
• CEO, MD or the manager;
• Company secretary;
• WTD;
• CFO; and such other officer that may be
prescribed.

Prof. V. Shyam Kishore VIT School of Law