Assignment No.

Q.1 Short Notes on NCLT and NCLAT

Ans.

NCLT- The National Company Law Tribunal is the adjudicating authority for the insolvency resolution
process of companies and limited liability partnerships under the Insolvency and Bankruptcy Code,
2016. All proceedings under the Companies Act, including proceedings relating to arbitration,
compromise, arrangements, reconstructions and the winding up of companies shall be disposed off
by the National Company Law Tribunal.

NCLAT - The National Company Law Appellate Tribunal (NCLAT) is a tribunal which was formed by
the Central Government of India under Section 410 of the Companies Act, 2013. The tribunal is
responsible for hearing appeals from the orders of National Company Law Tribunal(s) (NCLT),
starting on 1 June 2016.The tribunal also hears appeals from orders issued by the Insolvency and
Bankruptcy Board of India under Section 202 and Section 211 of IBC.

Q.2 Characteristics of a Company

Ans.

1. Legal person – It is created by law. It is considered as a person in the eyes of law.

2. Artificial person – It has no body and mind of its own. It can act only through other persons
elected for the purpose.

3. Continued existence – A company has a life of its own distinct from the life of its members. So the
death of a member will not affect the life of the company.

4. Limited liability – The liability of the members are limited to the extent of the face value of the
shares held by them.

5. Freely transferable – Shares of a company are freely transferred except in case of a private
company.

6. Can buy and sell assets – A company at its own discretion can buy or sell any asset.

7. Can sue and be sued – A company like any other person can sue a third party and be sued.

8. Separation of ownership and management – A company is managed through a board of directors

elected by its members. A member has no right to participate in the management of its day-to-day
affairs.

9. Common seal – Every company should have a common seal of its own. It is similar to the signature
of a natural person.

10. Dissolution – The company can be dissolved only by which creates it.
Q.3 Memorandum of Association v/s Articles of Association

Basis for Comparison Memorandum of Association Articles of Association

Meaning Memorandum of Association is
a document that contains all
the fundamental information
which are required for the
incorporation of the company.
Defined in Section 2 (56)
Type of Information contained Powers and objects of the
company.
Status It is subordinate to the
Companies Act.
Retrospective Effect The memorandum of
association of the company
cannot be amended
retrospectively.
Major contents A memorandum must contain
six clauses.
Articles of Association is a
document containing all the
rules and regulations that
governs the company.
Section 2 (5)
Rules of the company.
It is subordinate to the
memorandum.
The articles of association can
be amended retrospectively.
The articles can be drafted as
per the choice of the company.

Q.4 What is Lifting of corporate veil ?

Ans. The Doctorate veil refers to the doctrine of separate legal entity. All the company’s liability’s is
separated from the members liabilities. The court would not lift the veil in order to find out who
actually is liable on the company’s department.