NMIMS Global Access

School for Continuing Education (NGA-SCE)

Course: Business Law

1.Please explain the different types of instruments under which a company under
Companies Act, 2013 can raise capital.
Ans:- Companies Act 2013 deals with the formation, regulation, responsibilities, and
dissolution of companies. It was introduced to replace its predecessor so that the act is
more in accordance with the current corporate scenario. It has replaced the Companies Act,
1956 with a rule-based legislation containing 470 sections across 29 chap- ters and 7
schedules as against 658 sections in the Companies Act, 1956. It delineates the concept of
company formation and the legal procedures that are required to start a joint stock
company.
companies Act 2013 has defined company as any entity which has come into existence
under this act or any other company Act. The main types of company that has been
mentioned in this act include –
1. One-person Company – It is a type of company which has only one person as to its
member.
2. Private Company – A type of company which can have maximum members up to two
hundred and a minimum of two is known as a private company. Features of a private
company are as follows:
A private company can have a minimum share capital of up to any amount as
decided by the members.
This type of company cannot freely transfer their share to the public.

3. Public Company – This refers to those companies where 51% or more shares are held
and regulated by central or state governments. Furthermore, this type of company
can issue shares to the public. Minimum seven members are needed to form a public
company.

The overall object of the Companies Act, 2013 is to build a smooth and easy cor- porate
environment marked by simplification and ease of doing business,which is critical for India
to become more competitive.
Any company can raise its capital by issuing shares or debentures. A large amount of
capital is required to run any business.There are two ways through which a company can
fund its operation they are:- Debt and equity.
Shares:- A share is a portion of ownership in a company or a wherewithal. Investors who
holds shares of any firm are known as shareholders.
Types of shares
There are basically two types of share:-
1.Equity Share :- Equity shares are movable and are traded diligently by investors in stock
markets. As an equity shareholder, you are not only entitled to voting right , s on company
issues but also have the right to receive dividends. These are also known as ordinary shares
and comprise the proportion of the shares being issued by a particular company.
2. Preference Share Capital
Preferential shares are preferential in nature. During the expulsion of any company the
shareholders holding preferential shares are paid out first after settling the debts of the
beneficiary. company. Also, preferential shareholders does not have any voting rights.
Various types of preferential shares are seen based on their structure, maturity terms,
nature of dividend payment.
Ii. DEBENTURES:- A debenture is a type of bond or other debt instrument that is unsecured
by collateral. Both firm and government customarily issue debentures to raise capital or
endowment.Debenture includes debenture stock, bond, or any other instrument of a
company substantiation a debt, whether constituting a charge on the assets of the company
or not.
Types of debentures
1.Convertible Debentures:- in this type of debentures the investors have full
metamorphose to their debenture holdings into equity shares of the company.
2. Non Convertible Debentures:- In this debentures are issued by companies that don’t give
the choice to convert debentures into equity shares.

Q2) Please give two (2) real life instances where Indian employee related laws have
ensured
protection of welfare of employees.
Ans:-

4. Gavit and Vinayak are partners who started a partnership under the Partnership Act,
1932.
There are differences arisen between them and they have approached you to advise
them
to resolve their differences:
a. Please suggest ways how they can resolve their differences without approaching
conventional court of laws (5 Marks)
b. Please elaborate the advantages of resolving their differences without
approaching
 conventional court of laws (5 Marks)

ANS:- Partnership is the alliance between persons who have agreed to share the
surplus of a business carried on by wholly or any one of them acting for all. As per the
section 4 of Indian parliament act 1932.
In Accordance to the Indian Partnership Act, there is no curtailment on the maximum
number of partners that can be there in partnership but there must be a minimum of
two partners. However, as per the Companies Act 2013, the maximum number of
partners must not outran 100 in case of a partnership.
Rights and Duties of Partners in a
Partnership Firm
The following are the rights of a partner in a partnership firm.

1) Section 12(a): Right to take part in the conduct of the Business:- All the partners of a
partnership firm have the equitable to participate in the business oversee by the
firm. as a partnership business is a business of the partners, and their management
powers are generally coterminous. If the management power of a particular partner
is interfered with and the individual has been erroneously prohibit from
participating, the Court of Law can concilliate under such circumstances. The Court
can, and will, restrain the other partner from doing so by directive.

2) Section 13(b): Right to share profits:- Partners are authorized to share all the profits
earned in the business equally. Similarly, the losses assist by the partnership firm are
also equally contributed. The amount of a partner’s share must be discover by
inquiring whether there is an accordance in that behalf among the partners. If there
is no acordance, then it can be suppose that the share of profit is equal and the
burden of proving that the shares are unequal, will lie on the party alleging the
same.
3) Section 32(1): Right to retire:- Every partner of a partnership firm has the equitable
to pull out from the business with the acceptance of all the other partners. In the
case of a partnership formed at will, this may be done by giving a notice to that
effect to all the other partners.

4) Section 33: Right not to be expelled:- Every partner of a partnership firm has the
right to continue in the business. A partner cannot be demobilize from the firm by
any majority of the partners unless consult by a partnership agreement and
exercised in good faith and for the supremacy of the partnership firm.

Duties of a Partner
Section 9: General duties of a partner
Partners are effectual to carry on the business of the partnership firm. The general reduties
of a partner are listed down.
 1. A partner is required to carry on the business to the elevated ordinaryadvantage.
2. A partner is required to be fair and loyal to each other

Section 10: To indemnify for fraud

According to Section 10, a partner of the partnership firm is responsible to compensate the
firm for any destruction caused to its business or the firm because of a partner’s swindling
in the performance of the business of the firm.

3a) Ways to resolve their differences without approaching

conventional court of laws is by implemting Alternative Dispute Resolution
(“ADR”) PROCESS.

ADR PROCESS:-It refers to any method of resolving disputes without litigation. ADR

regroups all processes and techniques of conflict resolution that occur outside of
any governmental authority.

The most famous ADR methods are the

following: mediation, arbitration, conciliation, negotiation, and transaction.