Please enable JavaScript.
Coggle requires JavaScript to display documents.
Class - 1, Company Law: Meaning, Nature & Characteristics - Coggle…
Class - 1
Company Law: Meaning, Nature & Characteristics
Meaning & Introduction to Company
Latin Root: "To have meal together"
Corporation: Body Corporate
Incorporated Body
Special Law by Parliament
General Company Law
Types of Companies
Public: LIC, SBI
Private: Tata Steel Ltd., Reliance Industries Ltd.
Evolution of Law
Companies Act 1956 → Replaced by Companies Act 2013
Definition
Lord Justice Lindley
Association of individuals contributing to a common fund
Used in business/trade
Share profit/loss
Capital divided into transferable shares
Nature & Characteristics of Company
Corporate Personality
Case: Salomon v. Salomon & Co. Ltd. (1897)
Company is separate from owner
Shareholder not personally liable for debts
Case: Lee’s Air Farming Ltd.
Mr. Lee = Director + Employee
Widow entitled to workers’ compensation
Case: Re. Kondoli Tea Co. Ltd. (1886)
Property transferred to company = valid transaction
Artificial Person
Case: UBI v. Khader International Construction (2001)
Company = artificial person, can file suit under Order 33 Rule 1
Not a Citizen
Case: State Trading Corporation v. CTO (1963)
Company ≠ Citizen
But can claim Fundamental Rights (Article 14)
Case: R.C. Cooper v. Union of India (1970)
Shareholder can file petition on behalf of company
Case: Bennet Coleman & Co. v. UOI (1973)
Individual rights not lost on incorporation
Nationality & Residence
Case: Gasque v. Inland Revenue Commissioners
Company domicile = place of registration
Case: Tulika v. Parry & Co. (1903)
Residence = incorporation + board meeting location
Limited Liability
Shareholder liability limited to their contribution
Perpetual Succession
Company continues irrespective of member changes
Separate Property
Case: R.F. Perumal v. H. John Deavin (1960)
Member ≠ owner of company property
Case: Mrs. Bacha F. Guzdar v. CIT Bombay (1955)
Shareholder income ≠ agricultural income
Shareholders ≠ part owners of company
Transferability of Shares
Shares = movable property
Re. Balia and San Francisco Rly. (1868)
Companies Act, 2013 - Section 44
Capacity to Sue and Be Sued
Case: Floating Services Ltd. v. MV San Fransceco Dipaloa (2004)
Contractual Rights
Case: British Thomson-Houston Co. v. Sterling Accessories Ltd. (1924)
Limitation of Action
Doctrine of Ultra Vires: Company limited to objects in MoA
Separate Management
Ownership ≠ Management
Directors and managerial staff run company
Voluntary Association for Profit
Profit motive (except Sec 8 companies)
Termination of Existence
Only through legal means: Winding Up or Dissolution