Introduction

Company is the most common form of Entity for carrying on business. Two main types of associations recognized for carrying on of business is Partnership and The Company The concept of separate legal personality is the important feature which distinguishes the company from partnership

Separate legal personality
A company has a dual nature as both an association of its members and a person separate from its members. A company’s property is owned by the company as a separate person ,not by the members A member may come and go but a company remains the same .

Salomon v. Salomon & co Ltd[1897]AC22 Lord Macnaughten ”……..The company is at law a different person altogether from the subscribers to the memorandum and though it may be that after incorporation the business is precisely the same as it was before and the same persons are managers and the same hands receive the profits ,the company is not in law the agent of the subscribers or trustees for them .Nor are the subscribers and members liable in any shape or form except to the extent and in the manner provided by the Act .That is I think declared the intention of the enactment.”

It can sue and be sued Perpetual succession Transferability of shares Management under a board structure .own and Dispose of property.Consequences of separate legal Personality Limited Liability Company can Acquire .

it is generally used to denote a commercial association incorporated under a general statute .1956 .Though the term company has no precise legal definition . General statute in India is The Companies Act.

A corporation may be formed for any law ful purposes Most of them are formed for commercial purpose .We are concerned with commercial corporations .

1956 .Division of Commercial Corporations Jurisprudentially of three categories (a) Chartered (b) statutory (c) Registered In category ( C ) the birth traceable to a certificate issued by an officer of the state. empowered by a statute to do so Refer S.34 of the Companies Act. Most of the commercial corporations are registered companies .

1)Pooling of resources 2) Entrustment of management to a small group 3)Transferability of investment with comparative ease 4)Limiting the risk of investors 5) Perpetual succession

Distinction Between company and partnership
Partnership comes into existence , only when the partners begin to carry on business in accordance with their agreement. Where as a registered company comes into existence as soon as it is registered , regardless of whether it transacts any business.

Distinction Between company and partnership
A member of the partner ship is liable for all the debts and obligations of the firm incurred during member ship, regardless of any agreement to the contrary between the partners Where as a member of the body corporate is not liable for the debts of the corporation unless liability is imposed on the members by the constitution or by the statute.

Distinction Between company and partnership Every partner in a firm may act for the purpose of firms business and acts of any one member of a partnership bind all the partners . Where as in an incorporated company a board of Directors may be appointed to act for the company in matters of business no member of the company has as a member .any authority to bind the company. .

Registered company evolved from partnership Evolution of the deed of settlement company Which provided for most of the essential features of the registered company .

K) Three cardinal principles (1)Incorporated by registration (2) Compulsory registration of association with more than 25 members (3)Publicity Requirement Winding up governed by separate statute Major defect Absence of limited liability .Statutes -England a) Joint stock companies Act 1844(U.

Statutes -England b) Limited Liability Act1855 Cautious approach Minimum capital Statutory auditing and accounting required to be approved by the treasury C) Joint stock Companies Act1856 The cautious approach of Limited Liability Act 1855 abandoned .The only requirement for the limited liability was the addition of the word limited as the last component of the company’s name .

INDIA Joint Stock Companies Act.1857.1882.But they were incorporated through The royal charter or through the Letters patent or by Special Acts of Governer General in council Joint stock companies Act.1850 The first statute provided for the incorporation of the registered company Prior to this act there existed incorporated bodies in India to carry on commercial activities .1913.1866.1956 .

Calcutta.In India under the act of 1850. and Bombay. Section 2(2) Holding company to annex to its balance sheet.105-B) . Act of 1913-The concept of private company was introduced Amendment Act of 1936.The outstanding contribution was the recognition of group companies through holding subsidiary relation ship.Main difference between Joint Stock companies Act 1844(uk) and J.S.the registration was done by the supreme court of Madras.To incorporate the changes introduced in England by the companies Act. India is with respect to the authority empowered to register the company .1929. the balance sheet and profit and loss account of the subsidiary companies Also recognized the issue of redeemable preference shares (S.

See.1936 1) Power conferred on the General Meeting to Remove a rotational director before the expiry of his term 2) Certain power could be exercised by the board of directors only with the consent of general meeting (eg.86H.87A to 87-1) 5)Minimum subscription clause to meet certain financial requirements can not be arbitrarily fixed .sale of any undertaking of the company ) 3) Statutory provision providing for the vacation of the office of a director in certain contingencies (s 86 -1) 4) Statutory regulation of the office of managing agents (s.Other important change effected by the Amendment Act. S.

1977.1963.1956 Based on English Companies Act.1996.1956 Many provisions to safe guard investors and public 1)Appointment of Directors and removal of directors 2)Disqualification provisions strengthened 3)Relief against oppression and mismanagement .1985. The Companies Act.1966.2002.1969.2000.1988.The Companies Act.1960.1965.1948 But many amendments introducing drastic changes Major amendment Acts Acts of 1957.1974.

Tribunal abolished in 1967 .433(h).293B Effects of amendments Acts Amendment Act .408 .398.1960 –introduction of the concept of deemed public company –additiona criteria introduced by subsequent amendment acts 1963-Estabilishment of company law tribunal to facilitate speedy action against persons involved in malpractices and irregularities in the management of the company.433(f).4)Regulatory role strengthened 5)Publicity Requirements 6)Public interest recognized as a legitimate corporate policy –see Ss397.

Ceratin quasi judicial power conferred on the company law board Amendment Act.Also the establishment of the company law board as an administrative body under the control of the department Act of 1974.1977-Regulation of Company deposits Amendment Act 1985workers dues a statutory mortgage over the properties of the company in winding up and also an overall preferential claim S.529(3)& 529A .

approval for managerial appointments and remuneration in certain cases Depositories Act and Depositories Related Laws (Amendment)Act.1996&1997.Amendment Act 1988 1) CLB a quasi judicial organ free from control of central govt. . 2)New definition of officer in default-mens rea requirement diluted 3)Dispensing with govt.

49. 2 Shares of public companies made freely transferable Amendment Act.111.2000 (See s.150.111A115.inserted by the amendment act 1960)abolished Minimum paid up capital prescribed for private and public companies SEBI made administrative authority in the case of a listed companies in so far as they related to matters relating to issue and transfer of securities and non payment of dividend (Sections specified) .83.41. Sch.43A.Amendment of Ss 2.51.152.

5crore or more Disqualification for directors failing to file annual accounts and returns (for three years etc .Directors responsibility statement to be included in the boards report Setting up of Audit committee mandatory for public companies with apaid up capital of Rs.274(1)(g) Appointment of nominee directors by small share holders .(s. .

Amendment Act 2002 Producer companies introduced Second Amendment Act 2002 Setting up of National Company Law Board Tribunal to replace company law board Part VI A inserted which is a substitute for SICA provisions .

FORMATION OF A COMPANY .

Types of Companies Based on the mode of formation – Statutory Private Act of Parliament – Chartered (erstwhile) By the Crown’s prerogative – Registered Registration under the Companies Act .

by shares or guarantee if unlimited with or without share capital public or private .Creation of a Registered Company Step 1 Choice of type Limited or Unlimited If limited.

5 choices are available – Public company limited by shares – Private company limited by shares – Private company limited by guarantee &without share capital – Private unlimited company with a share capital – Private unlimited company not having a a share capital .

Constitutional Documents Memorandum Of Association Name Clause Registered Office Clause Object Clause Liability Clause Capital Clause Association Clause .

Name Clause .

Company’s Seal. Business Letters.II-Name of the Company Company-Artificial Person.identity Name to be stated in MoA.& outside places of business & Offices Application To Registrar checking Availability-Form 1A . Business Letters. Negotiable Instruments.

which will be injured if a new company adopts it .Desirable to Central Government – Identical with – Too nearly resembling Name is part of the business reputation.

Society of Motor Manufacturers and Traders v Motor Manufacturers and Traders Mutual Insurance co.Ltd [1925]1 Ch 625 Plaintiff.incorporated in 1902-Defendents-registeringmore or less similar name-action to restrain use of name Qn-Whether name undesirable being similar? Resemblance between the two names must be calculated to deceive. . It is calculated to deceive when it suggests that the corporation adopting it is in some way or other associated with the existing corporation Held-not undesirable as not calculated to deceive as anyone who took time could understand that the two companies deal in different areas.

Remedy for Use of Same Name If a registered Trade Mark-Can Sue for Infringement Tort Of “Passing Off” Injunction Remedy under section 22(1) .

any two or more persons.III-Subscription & Membership SECTION 12 Mode of forming incorporated company. (2) Such a company may be either (a) a company having the liability of its members limited by the memorandum to the amount. with or without limited liability. . or where the company to be formed will be a private company. by subscribing their names to a memorandum of association and otherwise complying with the requirements of this Act in respect of registration. unpaid on the shares respectively held by them (in this Act termed "a company limited by shares").(1) Any seven or more persons. form an incorporated company.. if any. associated for any lawful purpose may.

or (c) a company not having any limit on the liability of its members in this Act termed "an unlimited company").(b) a company having the liability of its members limited by the memorandum to such amount as the members may respectively undertake by the memorandum to contribute to the assets of the company in the event of its being wound up (in this Act termed "a company limited by guarantee"). .

Ref Sec 33(2) Registration Fee -ref sch 10 Stamp Duty on the constitutional documentsRef Indian Stamp Act.Rel Articles .IV-Lodgment of Documents with Registrar Memorandum Articles of Association Agreement with proposed Managerial Personnel.( if any) Certificate of Compliance of Requirements-by whom?.

SECTION 33 – Registration of memorandum and articles.] .(1) There shall be presented for registration. if any.. which the company proposes to enter into with any individual for appointment as its managing or whole-time director or manager. (b) its articles. if any. to the Registrar of the State in which the registered office of the company is stated by the memorandum to be situate (a) the memorandum of the company. and [1] [(c) the agreement.

1949 (38 of 2) A declaration by an advocate of the Supreme Court or of a High Court.(1) of section 2 of the Chartered Accountants Act. "chartered accountant in whole-time practice in India" means a chartered accountant within the meaning of clause (b) of sub-section 1949) who is practicing in India and who is not in full-time employment. an attorney or a pleader entitled to appear before a High Court. [4] Explanation. or [2] a Secretary or a chartered accountant in whole-time practice in India] who is engaged in the formation of a company.] . or by a person named in the articles as a director [3] [***] manager or secretary of the company. and the Registrar may accept such a declaration as sufficient evidence of such compliance.-For the purposes of this sub-section. that all the requirements of this Act and the rules thereunder have been complied with in respect of registration and matters precedent and incidental thereto. shall be filed with the Registrar.

the articles.3) If the Registrar is satisfied that all the requirements aforesaid have been complied with by the company and that it is authorised to be registered under this Act. . if any. he shall retain and register the memorandum. and the agreement referred to in clause (c) of subsection (1). if any.

Satisfaction of Registrar
Nature of Registrar’s Power? “authorised to be registered under this Act”? Not only checking Compliance of Section 33 Lawful object Stamp duty & Fees

Effect of Registration- SECTION 34
Effect of registration.- (1) On the registration of the memorandum of a company, the Registrar shall certify under his hand that the company is incorporated and, in the case of a limited company that the company is limited. (2) From the date of incorporation mentioned in the certificate of incorporation, such of the subscribers of the memorandum and other persons, as may from time to time be members of the company, shall be a body corporate by the name contained in the memorandum, capable forthwith of exercising all the functions of an incorporated company, and having perpetual succession and a common seal, but with such liability on the part of the members to contribute to the assets of the company in the event of its being wound up as is mentioned in this Act.

Conclusiveness of incorporation certificate - SECTION 35
Conclusiveness of certificate of incorporation.- A certificate of incorporation given by the Registrar in respect of any association shall be conclusive evidence that all the requirements of this Act have been complied with in respect of registration and matters precedent and incidental thereto, and that the association is a company authorised to be registered and duly registered under this

certificate of incorporation is conclusive evidence that the requirements of the act in respect of registration and of matters precedent and incidental to it have been complied with.the registrar of the company is to certify that the company is incorporated and requires the registrar to give notice of the issue of a certificate of incorporation in the gazette.On the registration of the memorandum of a company . .Thus the company is born and comes into being complete with its own birth certificate. .

and with "Private Limited" as the last word of the name in the case of a private limited company. (i) the main objects of the company to be pursued by the company on its incorporation and objects incidental or ancillary to the attainment of the main objects. 1965. (b) the State in which the registered office of the company is to be situate..(1) The memorandum of every company shall state (a) the name of the company with "Limited" as the last word of the name in the case of a public limited company.SECTION 13 Requirements with respect to memorandum. and (e) in the case of companies (other than trading corporations). d) in the case of a company formed after such commencement. the objects of the company. the States to whose territories the objects extend . [1] [***] [2] (c) in the case of a company in existence immediately before the commencement of the Companies (Amendment) Act. with objects not confined to one State. (ii) other objects of the company not included in sub-clause (i).

charges and expenses of winding up. . and of the costs. not exceeding a specified amount. (3) The memorandum of a company limited by guarantee shall also state that each member undertakes to contribute to the assets of the company in the event of its being wound up while he is a member or within one year after he ceases to be a member. as the case may be. for payment of the debts and liabilities of the company. or of such debts and liabilities of the company as may have been contracted before he ceases to be a member.2) The memorandum of a company limited by shares or by guarantee shall also state that the liability of its members is limited. and for adjustment of the rights of the contributories among themselves. such amount as may be required.

. (b) no subscriber of the memorandum shall take less than one share. the memorandum shall also state the amount of share capital with which the company is to be registered and the division thereof into shares of a fixed amount. and (c) each subscriber of the memorandum shall write opposite to his name the number of shares he takes.4) In the case of a company having a share capital (a) unless the company is an unlimited company.

SECTION 14 Form of memorandum. C. D and E in Schedule I as may applicable to the case of the company.. or in a Form as near thereto as circumstances admit Table B Table C Table D Table E .The memorandum of association of a company shall be in such one of the Forms in Tables B.

by ordinary resolution and with the previous approval of the Central Government signified in writing. or too nearly resembles. and . -(i) in the opinion of the Central Government. is in the opinion of the Central Government identical with. a company on its first registration or on its registration by a new name. through inadvertence or otherwise. the first-mentioned company.[1] [(1) If. whether under this Act or any previous companies law. is identical with. or too nearly resembles. the name by which a company in existence has been previously registered.] (a) may. is registered by a name which.SECTION 22 22 . 1999. Rectification of name of company. or (ii) on an application by a registered proprietor of a trade mark. such company. change its name or new name.. a registered trade mark of such proprietor under the Trade Marks Act.

as the case may be. whichever is later. the company. if the Central Government so directs within twelve months of its first registration or registration by its new name.b) shall. . or within twelve months of the commencement of this Act. by ordinary resolution and with the previous approval of the Central Government signified in writing change its name or new name. [2] Provided that no application under clause (ii) made by a registered proprietor of a trade mark after five years of coming to notice of registration of the company shall be considered by the Central Government. within a period of three months from the date of the direction or such longer period as the Central Government may think fit to allow. and every officer who is in default.] (2) If a company makes default in complying with any direction given under clause (b) of sub-section (1). shall be punishable with fine which may extend to [3] [one thousand rupees] for every day during which the default continues.

Unlawful Activity R v Registrar of Companies [1980] QBD 73 Facts: “Prostitutes Ltd”-unlawful activity Undesirable as it is unlawful .

Name of a state. Ashoka Chakra. Rashtrapati. Bharat. WHO.1950 It prohibits certain names emblems and seals from being used Schedule of the Act Eg. National Flag. . Dharma Chakra. United Nations. Name calculated to suggest the patronage of a government.Emblems and Names(Prevention of Improper Use) Act.

and with "Private Limited" as the last word of the name in the case of a private limited company.Use of the Word “Limited” 13(1) The memorandum of every company shall state (a) the name of the company with "Limited" as the last word of the name in the case of a public limited company. To ensure that all persons dealing with the company has clear notice as to the liability of members Exception under Section 25(1) .

without the addition to its name of the word "Limited" or the words "Private Limited". and to prohibit the payment of any dividend to its members. charity or any other useful object. or other income in promoting its objects.. if any. and (b) intends to apply its profits. science.(1) Where it is proved to the satisfaction of the Central Government that an association (a) is about to be formed as a limited company for promoting commerce. direct that the association may be registered as a company with limited liability. Power to dispense with "Limited" in name of charitable or other company.:25 . . the Central Government may by licence. art. religion.

Name of State and not place But within 30 days of commencement of business the place of registered office must be decided and notified to the registrar who shall record the samesection 146 .Registered Office Clause 13(1)(b) the State in which the registered office of the company is to be situate.

the objects of the company. and (e) in the case of companies (other than trading corporations). 1965. d) in the case of a company formed after such commencement. (ii) other objects of the company not included in sub-clause (i). (i) the main objects of the company to be pursued by the company on its incorporation and objects incidental or ancillary to the attainment of the main objects. with objects not confined to one State. the States to whose territories the objects extend .Objects Clause 13(1)(c) in the case of a company in existence immediately before the commencement of the Companies (Amendment) Act.

Main Objects incidental or ancillary to main objects Other Objects State to which it extends Choice of objects –freedom of promoters But no unlawful object permitted: Bowman v Secular Society.Gambling.Unlawful .

Why Objects? Protection of Share holders Creditor Protection .

section 149 2A .Commencement of business relating to other objects.

as the case may be. and for adjustment of the rights of the contributories among themselves. or of such debts and liabilities of the company as may have been contracted before he ceases to be a member. charges and expenses of winding up. and of the costs. such amount as may be required. for payment of the debts and liabilities of the company.Liability Clause Nature of liability of member Number and value of Shares into which it is divided Subject to a minimum 2) The memorandum of a company limited by shares or by guarantee shall also state that the liability of its members is limited. . not exceeding a specified amount. (3) The memorandum of a company limited by guarantee shall also state that each member undertakes to contribute to the assets of the company in the event of its being wound up while he is a member or within one year after he ceases to be a member.

(b) no subscriber of the memorandum shall take less than one share. and (c) each subscriber of the memorandum shall write opposite to his name the number of shares he takes.Capital Clause Nominal Capital Number and value of Shares into which it is divided Subject to a minimum 13(4) In the case of a company having a share capital (a) unless the company is an unlimited company. . the memorandum shall also state the amount of share capital with which the company is to be registered and the division thereof into shares of a fixed amount.

Association Clause “We the several persons whose names and addresses are subscribed. and we respectively agree to take the number of shares in the capital of the company set opposite our respective names” . are desirous of being formed into a company in pursuance of this MoA.

Form of memorandum SECTION 14 -The memorandum of association of a company shall be in such one of the Forms in Tables B. C. or in a Form as near thereto as circumstances admit . D and E in Schedule I as may applicable to the case of the company.

and (c) be signed by each subscriber (who shall add his address.The memorandum shall (a) be printed..) in the presence of at least one witness who shall attest the signature and shall likewise add his address. description and occupation.SECTION 15 Printing and signature of memorandum. if any. (b) be divided into paragraphs numbered consecutively. . if any. description and occupation.

COMMENCEMENT OF BUS DISTINCTIN BETWEEN PRIVATE AND PUBLIC COMPANT-PVT CAN COMMENCE BUSINESS IMMEDIATELY AFTER INCORPORATION-Public company has to obtain another certificate popularly known as trading certificate-Ref Sec 149 .

(1) Where a company having a share capital has issued a prospectus inviting the public to subscribe for its shares. permission for the shares or debentures to be dealt in on any recognized stock exchange. where the company has not appointed a secretary. on each of the shares taken or contracted to be taken by him and for which he is liable to pay in cash. that clauses-(a). have been complied with. or may become. a proportion equal to the proportion payable on application and allotment on the shares offered for public subscription. and (d) there has been filed with the Registrar a duty verified declaration by [1] one of the directors or the secretary or. or to obtain.. a secretary in whole-time practice in the prescribed form. (b) and (c) of this sub-section. . (c) no money is.Commencement Of BusinessSection 149 Restrictions on commencement of business. liable to be repaid to applicants for any shares or debentures which have been offered for public subscription by reason of any failure to apply for. (b) every director of the company has paid to the company. the company shall not commence any business or exercise any borrowing powers. unless (a) shares held subject to the payment of the whole amount thereof in cash have been allotted to an amount not less in the whole than the minimum subscription.

be punishable with fine which may extend to [4] five thousand rupees for every day during which the contravention continues. and shall not be binding on the company until that date. .(4) Any contract made by a company before the date at which it is entitled to commence business shall be provisional only. every person who is responsible for the contravention shall. and on that date it shall become binding. without prejudice to any other liability. (6) If any company commences business or exercises borrowing powers in contravention of this section.

subsubwhether or not it has issued a prospectus inviting the public to subscribe for its shares. unless (i) the company has approved of the commencement of any such business by a special resolution passed in that behalf by its general meeting. 1965 (31 of 1965). and (ii) there has been filed with the Registrar a duty verified declaration by [one of the directors or the secretary or where the company has not appointed a secretary. shall not at any time commence any businessbusiness(a) if such company is a company in existence immediately before the commencement of the Companies (Amendment) Act.-A contravention Explanation. . that clause (i) or as the case may be. without prejudice to any other liability. is a company formed after such commencement in relation to any of the objects stated in its memorandum in pursuance of sub-clause (ii) of clause (d) of sub-section (1) of the said section. sub- (b) if such company. every person who is subresponsible for the contravention shall. and if the company commences any such business in contravention of this sub-section.company shall be deemed to commence any business within the meaning of clause (a) if and only if it commences meaning any new business which is not germane to the business which it is carrying on at the commencement of the is Companies (Amendment) Act. be punishable with fine which may any extend to [3] five thousand rupees for every day during which the contravention continues. a secretary in whole time practice in the prescribed form. in relation to any of the objects staled in its memorandum in pursuance of objects clause (c) of sub-section (1) of section 13. Explanation. sub-section (2B) has been complied with.Commencement of Business Stated as other Objects in Memorandum Sec 149 2A (2A) Without prejudice to the provisions of sub-section (1) and sub-section (2) a company having a share capital. 1965 (31 of 1965) in relation to any of the objects referred to in the said clause.

(1) A company shall not alter the conditions contained in its memorandum except in the cases. (2) Only those provisions which are required by section 13 or by any other specific provision contained in this Act to be stated in the memorandum of the company concerned shall be deemed to be conditions contained in its memorandum .. Alteration of memorandum. and to the extent for which express provision is made in this Act. in the mode.Alteration of Memorandum Earlier Companies Acts permitted no alteration Later Name and Authorised Capital was permitted to be altered Range of alterations now permitted 16 .

. consequent on the conversion in accordance with the provisions of this Act of a public company into a private company or of a private company into a public company. Change of name by company. of the word "Private".A company may. the deletion therefrom. by special resolution and with the approval of the Central Government signified in writing change its name: [1] Provided that no such approval shall be required where the only change in the name of a company is the addition thereto or. as the case may be.Alteration of Name Clause Special Resolution Approval of Central Government in writing 21 .] .

and the change of name shall be complete and effective only on the issue of such a certificate. (2) The Registrar shall also make the necessary alteration in the memorandum of association of the company. the Registrar shall enter the new name on the register in the place of the former name. or render defective any legal proceedings by or against it. .Name to be effective only when a fresh certificate of incorporation is issued under section 23 23 .(1) Where a company changes its name in pursuance of section 21 or 22. Registration of change of name and effect thereof. (3) The change of name shall not affect any rights or obligations of the company. and shall issue a fresh certificate of incorporation with the necessary alterations embodied therein. and any legal proceedings which might have been continued or commenced by or against the company by its former name may be continued by or against the company by its new name..

Malhati Tea Syndicate v Revenue Officer AIR 1973 Cal 78 Malhati Tea Syndicate.Malhati Tea & Industries Limited-Writ in Former Name-Petition declared incompetentCan it file a new petition in its old name? “Nothing in 23(3) authorised the company to commence a legal proceeding in its former name at the time when it had acquired a new name which has been entered in the register” .

Special resolution.notice to registrar-within 30 days-section 146(2) – Within the same state but under a different registrar Section 17A .Confirmation of Regional Director- – Beyond the State Requires Alteration-Section 17(1)-special resolutionConfirmation of Central Government-17(2) .Alteration Of Registered Office Clause 4 situations – Within the same city Decision of the Board-notice to registrar-within 30 dayssection 146 – Within the same state Special resolution.

.--(1) A company may. or (c) to enlarge or change the local area of its operations. or of any of the undertakings. or with respect to the objects of the company so far as may be required to enable it-(a) to carry on its business more economically or more efficiently. or (e) to restrict or abandon any of the objects specified in the memorandum. alter the provisions of its memorandum so as to change the place of its registered office from one State to another. of the company. or (d) to carry on some business which under existing circumstances may conveniently or advantageously be combined with the business of the company. by special resolution. or (b) to attain its main purpose by new or improved means.SECTION 17 Special resolution and confirmation by Central Government required for alteration of memorandum. or (g) to amalgamate with any other company or body of persons. or (f) to sell or dispose of the whole or any part of the undertaking.

be affected by the alteration. and (b) that. and who signifies his objection in the manner directed by the Central Government. in the case of any person or class of persons. either his consent to the alteration has been obtained or his debt or claim has been discharged or has been determined. or has been secured: Provided that the Central Government may. dispense with the notice required by clause . with respect to every creditor who. in the opinion of the Central Government. the Central Government must be satisfied-(a) that sufficient notice has been given to every holder of the debentures of the company. (3) Before confirming the alteration.2) The alteration of the provisions of memorandum relating to the change of the place of its registered office from one State to another shall not take effect unless it is confirmed by the Central Government on petition. and to every other person or class of persons whose interests will. for special reasons. is entitled to object to the alteration. in the opinion of the Central Government.

and may make such order as to costs as it thinks proper. as it thinks fit. . with respect to the confirmation of the alteration.4) The Central Government shall cause notice of the petition for confirmation of the alteration to be served on the Registrar who shall also be given a reasonable opportunity of appearing before the Central Government and state his objections and suggestions. if any. (5) The Central Government may make an order confirming the alteration on such terms and conditions. if any.

Mackinnon Mackenzie & Co [1961] 1 Comp . Orissa Chemicals & DistilleriesAIR 1961 Ori 162 Re.“Class of Persons interested”? Can the state sue as an interested person? Orient Paper Mills v State of OrissaAIR 1957 Ori 232 Re.LJ 200 .

Alteration Of Objects Clause Fenced by safeguards which are calculated to protect the interests of creditors and shareholders Substantive safeguards in Section 17 7 heads permitted .

to carry on its business more economically or more efficiently – Business is the same-ways of conducting it can be changed– Re Scientific Poultry Breeders Association 1933 Ch 227 – Straw Products Ltd v ROC 1970 Comp LJ 93 .

.Re Indian Gold Mining & Extracting Company 1891 3 Ch 538 4 to carry on some business which under existing circumstances may conveniently or advantageously be combined with the business of the company – .2 to attain its main purpose by new or improved means 3 to enlarge or change the local area of its operations .Re Patent Tyre Co.1923 2 Ch 222 – Re Cyclists Touring Club 1907 1 Ch 269 .

or 7 to amalgamate with any other company or body of persons .5 to restrict or abandon any of the objects specified in the memorandum. of the company. or 6 to sell or dispose of the whole or any part of the undertaking. or of any of the undertakings.

section 19 (1) No such alteration as is referred to in section 17 shall have any effect until it has been duly registered in accordance with the provisions of section 18.Procedure Copy of Special Resolution to the Registrar – Conclusive evidence as to the compliance of requirements – Effect of Failure to register. .

Articles of Association Companies which require AoA for registration – Unlimited Companies – Companies Limited by Guarantee – Private Companies Limited by Shares – Optional for public company limited by shares – See SEC 26 .

be registered with the memorandum. articles of association signed by the subscribers of the memorandum.. .SECTION 26 Articles prescribing regulations. prescribing regulations for the company.There may in the case of a public company limited by shares. and there shall in the case of an unlimited company or a company limited by guarantee or a private company limited by shares.

Table A –See sec 28 .Schedule 1 Contains various Model articles and memoranda A company may either adopt them or draft one for itself Co Limited by shares.

. (2) In the case of any such company which is registered after the commencement of this Act. those regulations shall. if articles are not registered. or if articles are registered.SECTION 28 Adoption and application of Table A in the case of companies limited by shares.(1) The articles of association of a company limited by shares may adopt all or any of the regulations contained in Table A in Schedule I. so far as applicable. be the regulations of the company in the same manner and to the same extent as if they were contained in duly registered articles.. insofar as the articles do not exclude or modify the regulations contained in Table A aforesaid.

SECTION 29 Form of articles in the case of other companies. D and E. adopted by the company ..The articles of association of any company. or in a Form as near thereto as circumstances admit: [1] Provided that nothing in this section shall be deemed to prevent a company from including any additional matters in its articles in so far as they are not inconsistent with the provisions contained in the Form in any of the Tables C. D and E in Schedule I as may be applicable. shall be in such one of the Forms in Tables C. not being a company limited by shares.

having a Share Capital. – Number of members & if it has a share capital. – Number of members Private Co.Certain Other Requirements Unlimited Co. the amount Company Limited by Guarantee. Requirements in 3 (1)(iii)(a)(b)(c) – – – Restriction on transfer Limiting the membership to 50 Prohibiting invitation from public to subscribe .

the articles shall contain provisions relating to the matters specified in the said sub-clauses (b) and (c). (2) In the case of a company limited by guarantee.(1) In the case of an unlimited company. and in the case of any other private company. (b) and (c) of clause (iii) of sub-section (1) of section 3.SECTION 27 Regulations required in case of unlimited company.. (3) In the case of a private company having a share capital. the articles shall state the number of members with which the company is to be registered. . company limited by guarantee or private company limited by shares. if the company has a share capital the amount of share capital with which the company is to be registered. the articles shall contain provisions relating to the matters specified in sub-clauses (a). the articles shall state the number of members with which the company is to be registered and.

description and occupation. description and occupation. (b) be divided into paragraphs numbered consecutively. . if any.. if any. and (c) be signed by each subscriber of the memorandum of association (who shall add his address.) in the presence of at least one witness who shall attest the signature and shall likewise add his address.Articles shall (a) be printed.Form & Signature of Articles Section 30 Form and signature of articles.

to the extent to which it is repugnant to the provisions of this Act.as the subscribers deem expedient-freedom subject to section 9 Act to override memorandum. become or be void. as the case may be. before or after the commencement of this Act. articles. as the case may be. —Save as otherwise expressly provided in the Act — (a) the provisions of this Act shall have effect notwithstanding anything to the contrary contained in the memorandum or articles of a company.Contents. or in any agreement executed by it. . etc. articles. agreement or resolution aforesaid shall. or in any resolution passed by the company in general meeting or by its Board of directors. executed or passed. and (b) any provision contained in the memorandum. whether the same be registered.

Co relation between MoA & AoA Articles subordinate to Memorandum – In case of inconsistency memorandum will prevail Ambiguity AoA Can be used to explain MoA and vice versa in case of ambiguity .

Doctrine of constructive notice Doctrine of Ultra vires .