COMPANY LAW

Aims and objectives

To understand
the basic rules and conduct enforced by the state to regulate the conduct of people, to protect their property and contractual rights

Companies Act 1956

FEATURES OF CO. ACT

To

Give Power to Govt. Interfere with the Affairs of Co. Protect Dishonest Management Disclosure of all Info. Attain Social and Economic Policies of Govt.

Special provisions for Govt. Companies

Extensive power to Central Govt. &

Company Law Board.

Public company national asset, not

exclusively for shareholders or directors

Not applicable on partner ship firms.

Present set up of Co. Law Admn.

Central Govt. Sec.637: gives powers to CLB Company Law Board Sec.10 E: judicial fun.

Registrar of Companies sec. 609: to register

Public trustee: appointed to safeguard int. of shareholders & prevent voting rights of donors. Sec. 153 A

SEBI: mission of SEBI is to make India as one of the best securities

market of the world and SEBI as one of the most respected regulator in the world.

Advisory committee sec. 41 (O)

National Advisory Comt. Sec. 209 : advices central govt on accounts Official liquidator: under control of HC and CLB

Definition

Sec.3(1)(i) & (ii) Company registered under this act or an existing company. An existing company means a company found and registered under any of the former companies act.

A company is an artificial legal person created by law

The term company is not synonymous with partnership, though every such unincorporated company is a partnership. When the companies are authorized by the government they are known by the name of corporations.

Features Of Co.
1.

Incorporated association:

Registration must for all associations Pvt: 2-50 Pub: 7 nil

Partnership firm: 2-20

2. Separate and legal entity:

Purely creation of Law

Position to exist
Enter in to contract

Appoint people as employee

Can do everything just like natural

persons

3.

Limited liability:

Only the amount payable as an investor, i.e., value of shares

4.

Common seal :

Acts as signature

First meeting approved by the board with 2 directors as witnesses

5.

Voluntary association for profit:

Formed for an accomplishment of public good

Not against public policy

6.

Perpetual life:
Till it is legally brought to end Continuity not affected by death or insolvency of original owners

7.

Separate ownership and Management:

Managed

by elected representatives of share

holders Board of Directors.

8.

Transferability of shares:
Freely

transferable

9.

Termination of existence:
By

winding up

persons

There should be at least two persons to form a partnership or partnership firm.

"Partnership" is the relation between persons who have agreed to share the profits of a business carried on by all or any of them acting for all.

Restrictions on the number of persons

The maximum number of members that can exist in partnership is 10 in case of a firm carrying on banking business and 20 in case of any other business.

This restriction is placed by the companies act and not the partnership act. Partnership The relationship between the persons is called "partnership".

Firm The partners are collectively called a "firm".

Firm Name The name under which the partnership business is carried on is called the "firm name".