CA INTER CORPORATE LAW CLASSES LECTURE 1 COMPANIES ACT 2013

Ø  CA INTER LAW CLASSES LECTURE 1
COMPANIES ACT 2013
CORPORATE LAWS/COMPANY LAW

CORPORATE LAWS/COMPANY LAW

Ø  GENERAL PRINCIPLES OF COMPANY LAW

• BASIC PRINCIPLES OF COMPANY LAW

1. CONCEPT OF LEGAL PERSONALITY
2. CONCEPT OF SEPARATE LEGAL ENTITY
3. CONCEPT OF THEORY OF LIMITED LIABILITY

• COMPANY IS LEGAL PERSON

1. A COMPANY IS LEGAL PERSON. A LEGAL PERSON IS WHO CAN FILE A SUIT AGAINST ANOTHER AND AGAINST WHOM A SUIT CAN BE FILED IN HIS NAME.
2. A COMPANY CAN SUE AND SUED BY OTHERS
3. A COMPANY CAN HOLD PROPERTY,ACQUIRE,SELL,LEASE,MORTGAGE,GIFT OF OTHERWISE TRANSFER A PROPERTY IN ITS OWN NAME

• TATA ENGINEERING AND LOCOMOTIVES CO LTD V STATE OF BIHAR:-HELD THAT CORPORATION WITH IN THE MEANING OF SECTION 2(7) OF THE COMPANIES ACT 1956 IS EQUAL TO NATURAL PERSON AHD HAS LEGAL ENTITY  OF ITS OWN DIFFERENT FROM SHAREHOLDERS.
• SEPARATE LEGAL ENTITY

1. A COMPANY IS A SEPARATE LEGAL ENTITY DIFFERENT FROM ITS MEMBERS
2. COMPANY HAS PERPETUAL SUCCESSION: PERPETUAL MEANS FOR EVER AND THE COMPANY IS CREATED BY THE PROCESS OF LAW. WINDING UP IS THE PROCESS BY WHICH THE ASSETS OF THE COMPANY ARE DISPOSED FOR THE PURPOSE OF DISSOLVING A COMPANY

• LIMITED LIABILITY

1. LIABILITY MEANS TO WHAT EXTENT A PERSON CAN BE MADE TO ACCOUNT AT LAW. GENERALLY THE COMPANY ITSELF IS ALWAYS FULLY LIABLE TO PAY ITS DEBTS SO LONG AS THERE ARE ASSETS TO PAY THE DEBT,
2. COMPANIES HAVE LIMITED LIABILITIES. IN COMPANY WITH LIMITED  LIABILITY A MEMBER OF A COMPANY IS LIABLE TO THE COMPANY TO LIMITED EXTENT THAT IS  TO SAY THE EXTENT TO WHICH HE HAS AGREED TO SUBSCRIBE FOR SHARES OF A COMPANY.

• COMPANY LAW IN INDIA

1. BASED ON THE LAW OF COMPANIES IN ENGLAND
2. THE FIRST COMPANY LEGISLATION IN INDIA WAS PASSED IN 1850,KNOWN AS JOINT STOCK COMPANIES ACT( BASED ON THE ENGLISH COMPANIES ACT OF 1844)
3. REPLACED BY JOINT STOCK COMPANIES ACT 1857.THIS WAS THE FIRST ACT IN INDIA TO RECOGNIZE THE PRINCIPLE OF LIMITED LIABILITY BUT IT WAS NOT APPLICABLE TO BANKING COMPANIES ACT
4. THIS DISABILITY WAS REMOVED BY THE JOINT STOCK COMPANIES ACT 1860
5. THE FIRST COMPREHENSIVE ACT PROVIDING FOR THE INCORPORATION,REGULATIONS AND WINDING UP OF THE COMPANIES WAS PASSED IN 1866. MODIFIED IN 1882 AND REMAIN IN FORCE TILL 1913
6. THE INDIAN COMPANIES ACT WAS PASSED IN 1913
7. 25 TH OCOBER 1950,THE GOVERNEMENT OF INDIA APPOINTED A COMMITTEE UNDER CHAIRMANSHIP OF H.C.BHABA TO CONSIDER AND REPORT ON REQUIRED AMENDMENTS IN THE COMPANIES ACT 1913.

• THE COMPANIES ACT 1956

1. THE H.C.BHABA COMMITTEE SUBMITTED ITS REPORT IN1952 RECOMMENDING AMENDMENTS IN THE COMPANY LAW
2. THE COMPANIES ACT WAS PASSED IN 1956,IT IS LARGELY BASED ON THE ENGLISH COMPANIES ACT.1943. IT CONSISTS OF 658 SECTIONS AND 13 SCHEDULES AND XIV AND XV HAVE BEEN INCLUDED LATER.
3. CAME INTO FORCE FROM 1.4.1956.THE ACT EXTEND TO THE WHOLE OF INDIA INCLUDING JAMMU AND KASHMIR BUT APPLY TO THE STATE OF NAGALAND SUBJECT TO MODIFICATIONS BY CENTRAL GOVERNMENT.

• THE PURPOSE OF COMPANY LAW

1. PROTECTION OF THE INVESTOR
2. PROTECTION OF THE CREDITORS
3. TO HELP THE GROWTH OF THE COMPANIES ON HEALTH BUSINESS LAW
4. TO CONSOLIDATE AND AMEND THE LAW RELATING TO COMPANIES AND CERTAIN OTHER ASSOCIATIONS

• ADMINISTRATION OF COMPANY LAW

1. THE CENTRAL GOVERNMENT HAS THE OVERALL RESPONSIBILITIES FOR THE ADMINISTRATION OF THE COMPANY LAW. DONE THROUGH DEPARTMENT OF COMPANY AFFAIRS UNDER THE MINISTRY OF LAWS,JUSTICE AND COMPANY AFFAIRS.
2. THE BOARD OF COMPANY LAW ADMINISTRATION ( SECTION 10-E):THE CENTRAL GOVERNMENT CONSTITUTE THE BOARD OF COMPANY LAW ADMINISTRATION. BUT ON FROM THE COMMENCEMENT OF THE COMPANIES SECOND AMENDMENT ACT 2002 W.E.F 2003 IT STAND DISSOLVED.
3. THE NATIONAL COMPANY LAW TRIBUNAL(SECTION 10 FB):- CONSTITUTED BY CENTRAL GOVENEMENT. IT WILL CONSIST OF PRESIDENT AND SUCH NUMBER OF JUDICIAL AND TECHNICAL MEMBERS NOT EXCEEDING 62

• ADMINISTRATION OF COMPANY LAW

1. THE APPELLATE TRIBUNAL: UNDER SECTION 10 FR,THE CENTRAL COMPANY LAW SHALL CONSTITUTE AN APPELLATE TO BE CALLED THE NATIONAL COMPANY LAW APPELLATE TRIBUNAL CONSISTING OF A CHAIRPERSON AND NOT MORE THAN TWO MEMBERS TO BE APPOINTED BY THE GOVERNMENT FOR HEARING APPEALS AGAINST THE ORDERS OF THE TRIBUNAL UNDER THIS ACT.
2. THE COURT:-THE COMPANIES ACT HAS VESTED IN THE COURT A VARIETY OF POWERS UNDER SEVERAL SECTION OF THE ACT
3. REGISTRAR OF THE COMPANIES:-THE REGISTRAR OCCUPIES AN IMPORTANT PLACE IN THE ADMINISTRATION OF THE COMPANIES ACT.HE IS APPOINTED BY THE CENTRAL GOVERNMENT. HE IS RESPONSIBLE FOR THE ADMINISTRATION OF THE COMPANY LAW IN THE STATE.
4. PUBLIC TRUSTEE:-UNDER SECTION 153 A,THE CENTRAL GOVERNMENT MAY BY NOTIFICATION IN THE OFFICIAL GAZETTE,APPOINT A PERSON AS PUBLIC TRUSTEE. THE PROVISIONS OF THIS SECTION SHALL NOT APPLY ON OR AFTER THE COMMENCEMENT OF THE COMPANIES ACT 2000
5. OFFICIAL LIQUIDATOR:-IS ATTACHED TO HIGH COURT IN EACH STATE. THEY CONDUCT THE PROCEEDING IN THE WINDING UP OF A COMPANY ORDERED BY THE COURT AND PERFORM SUCH OTHER DUTIES AS THE COURT IMPOSE.
6. SECURITIES AND EXCHANGE BOARD OF INDIA(SEBI) HAS BEEN ESTABLISHED UNDER SECTION 3 OF SEBI ACT 1992
7. COMPANY LAW ADVISORY COMMITTEE:-SECTION 410 THE CENTRAL GOVERNMENT MAY CONSTITUTE THE ADVISORY COMMITTEE.

• THE COMPANIES ACT 2013

1. THE COMPANIES ACT CAME INTO FORCE ON 1-4-1956
2. AMENDED 25 TIMES
3. COMPANY BILL 2012 HAS BEEN PASSED BY LOK SABHA ON 18-12-2012 AND BY RAJYA SABHA 8 TH AUGUST 2013
4. SECTION 1 OF THE COMPANIES ACT 2013 DEALS WITH SHORT TITLE,EXTENT AND COMMENCEMENT AND APPLICATION
5. EXTENDS TO THE WHOLE OF INDIA

6. THE PROVISIONS OF THIS ACT SHALL APPLY TO :-

a)    COMPANIES INCORPORATED UNDER THIS ACT OR UNDER ANY PREVIOUS COMPANY LAW

b)    INSURANCE COMPANIES EXCEPT SO FAR AS THE SAID PROVISIONS ARE INCONSISTENT WITH PROVISIONS OF INSURANCE ACT 1938 OR INSURANCE REGULATORY AND DEVELOPMENT AUTHORITY ACT 1999

c)    BANKING COMPANIES EXCEPT SP FAR SO THE SAID PROVISION ARE INCONSISTENT WITH BANKING REGULATION ACT 1949

d)    COMPANIES ENGAGED IN THE GENERATION R SUPPLY OF ELECTRICITY EXCEPT SP FAR SO THE SAID PROVISION ARE INCONSISTENT WITH ELECTRICITY ACT 2003

e)    ANY OTHER COMPANIES GOVERNED BY SPECIAL ACT EXCEPT SP FAR SO THE SAID PROVISION ARE INCONSISTENT PROVISIONS OF SPECIAL ACT

f)     SUCH BODY CORPORATE SPECIFIED BY THE CENTRAL GOVERNMENT.