Company law

• Types of business entities

• Incorporation of company
• Share, share capital ,dividends
• Investments,loans,borrowings,debentures
• Directors of a company
• Meetings of the company
• Inspection
• Reconstruction
• Winding up
Types of business entities

 Sole proprietary
 HUF business
 Partnership firm
 Corporate bodies
• commercial
• Statutory
• Banking companies
• Cooperative societies
• Limited company
• limited by shares
TYPES
• limited by guarantee
• Unlimited company
• Government company
• Foreign company
 Types of companies

• Royal charter statutory registered

ltd by shares ltd by guarantee unlimited companies

Public company private company

Characteristics of company

• Independent entity
• Limited liability
• Separate property
• Perpetual succession
• Transferable shares
 Incorporation of the company

 For incorporation of companies the promoter have to decide the

following-
 Type of company
 Name of the company
 Filing of documents with registrar
-MOU
-AOA
-List of directors
-Declaration
-Preparation of other documents
 Payment of required fees
 Obtaining of certificate of incorporation
 Obtaining the certificate of commencement
 Doctrine Of Ultra Vires
 Any act done by the company beyond its legal powers and authority.
• The act which the company performs are authorized by-
- Memorandum of association
- The companies act,1956
- case law –ashbury railway carriage and iron co.ltd.v/s riche.
 Act ultra vires the powers of the directors and ultra vires the articles but
intra vires the memorandum.
• Directors derive their powers through-
- Articles of association
- Specific authority through resolution
- Companies act,1956
• Alteration of Articles &limitations thereto.
• Effect of memorandum and articles-members &company
members interse
company & outsiders
Constructive notice & indoor management

• Doctrine of constructive notice

the memorandum and articles of association are presumed to be notice to
the public.Case law-oak bank oil co. v/s Crum
• Doctrine of indoor management
It is the duty of every person to read the MOA & AOA of the company,but
he is not bound to inquire into the internal affairs of the company.it is
presumed that the internal regulations are carried out according to the rules
laid down.Case law-premium industrial bank v/s Carlton co. ltd.
• Exceptions-1)Ultra Vires Acts
2)Knowledge of Irregularity
3)Act of Agent Outside the Scope of His Authority
4)Act Outside Apparent Authority
5)Negligence
 Prospectus
• Prospectus means any invitation to public to subscribe shares /debentures.
• Abridged prospectus
• Deemed prospectus-case law:pramatha nath sanyal v/s kali kumar dutt.
• An offer to the public
• Contents-1)date,general information,capital,terms,management &risk
2)registration
-expert`s consent
-delivery for registration
-newspaper advertisement of prospectus
• Mis-statements in the prospectus
• Misleading prospectus
• Golden rule of prospectus
• Liability-civil &criminal
• Statement in lieu of prospectus
• Minimum subscription
• Shelf prospectus
• Information memorandum & red herring prospectus
• dematerialization
 Shares ,share capital ,dividends

• Share means the share in the share capital of a company.

• Share certificate-is a document issued by the company and is an
evidence of the title of the share.
• Share capital-the issued share capital means the shares which have
been allotted ,issued &held by the shareholders.
• Types of shares-1)ordinary/equity shares
2)preference shares-
-cumulative & non- cumulative
-participating
-redeemable&non- redeemable
 Issue of shares

 Issue of shares
• Shares at a premium
• Shares at a discount
• Shares at par
• Bonus shares
• Right shares
 Transfer of shares
 Transmission of shares
Investments ,loans,borrowings,debentures
• Investments in securities
• Inter corporate loans and investments
• Ceiling on loans ,guarantees and investments
• Relaxation for the above provision
• Consent of the directors
• Interest rate
• Register of investments and loans
• Penalty for non-compliance of this section
• Borrowings-loans,debentures,bonds & public deposits
• Creation of charge
• Debentures-secured/unsecured
-redeemable/irredeemable
-bearer
-registered
-convertible
• Public deposits