CORPORATE LEGAL FRAMEWORK 4/PREVIOUS PAPERS

CORPORATE LEGAL FRAMEWORK 3/PREVIOUS YEAR PAPERS

CORPORATE LEGAL FRAMEWORK 2/PREVIOUS QUESTION PAPER

CORPORATE LEGAL FRAMEWORK PREVIOUS PAPER 1

THEORIES OF CORPORATE GOVERNANCE

•     THEORIES OF CORPORATE GOVERNANCE

•     BUSINESS ETHICS AND CORPORATE GOVERNANCE

•     DR SHASHI AGGARWAL

•     MEANING OF CORPORATE GOVERNANCE

1.       CONSISTS OF TWO WORDS : CORPORATE PLUS GOVERNANCE

2.       A CORPORATE MEANS A LEGAL ENTITY AND THAT EXIST INDEPENDENT OF PERSONS WHO HAVE FORMED IT AND IS VESTED WITH MANY OF THE RIGHT GIVEN TO HIS INDIVIDUALS AND BASICALLY GOVERNED BY BORAD OF DIRECTORS WITH THE CONSENT OF SHAREHOLDERS

3.       GOVERNANCE : DERIVED FROM THEO WORD GUBERNARE WHICH MEANS TO RULE TO STEER

4.       GOVERNANCE IS THE ACT OF FRAMING PLANS AND POLICIES,MONITORING THE SAME TO ENSURE THEIR PROPER IMPLEMENTATION AND ACCEPTING THE ACCOUNTABILITY FOR THE AFFAIRS OF A CORPORATION

5.       CORPORATE GOVERNANCE IS THE SYSTEM OF RULES,PRACTICE AND PROCESSES BY WHICH A FIRM IS DIRECTED AND CONTROLLED. IT TRIES TO BALANCE THE INTERESTS OF COMPANY’S STAKEHOLDERS SUCH AS SHAREHOLDERS,MGMT,CUSTOMERS,SUPPLIERS,FINANCIERS,GOVT AND THE COMMUNITY

REVISION SERIES FOR COMPANY LAW FOR 2019 PART 1

REVISION SERIES FOR COMPANY LAW FOR 2019 1

·         REVISION SERIES FOR COMPANY LAW  FOR 2019 1

·         SHORT QUESTIONS

• CORPORATE LEGAL FRAMEWORK
• DR. SAHSHI AGGARWAL

•     MEANING OF COMPANY

•     THE WORD COMPANY HAS NO STRICT OR TECHNICAL OR LEGAL MEANING

•     A COMPANY IN THE NORMAL SENSE MEANS AN ASSOCIATION OF PERSONS UNITED FOR A COMMON OBJECT

•     LORD JUSTICE LINDLEY :

1.        A COMPANY IS AN ASSOCIATION OF MANY PERSONS

2.       WHO CONTRIBUTED MONEY OR MONEY’S WORTH

3.       TO A COMMON STOCK

4.       EMPLOYED FOR A COMMON PURPOSE AND WHO SHARES THE PROFIT OR LOSS

5.       THE COMMON STOCK SO CONTRIBUTED IS DENOTED IN MONEY AND ITS CAPITAL OF THE COMPANY

6.       THE PERSON WHO CONTRIBUTE IT TO WHOM IT BELONGS ARE MEMBERS

7.       THE PROPORTION OF CAPITAL TO WHICH EACH MEMBER IS ENTITLED IS HIS SHARE

8.       SHARES ARE ALWAYS TRANSFERABLE ALTHOUGH THE RIGHT TO TRANSFER IS OFTEN MORE OR LESS RESTRICTED

ALTERATION OF ARTICLES OF ASSOCIATION COMPANIES ACT 2013

• COMPANY LAW 2013
• ALTERATION OF ARTICLES
• ALTERATION OF AOA SECTION 14

1. A COMPANY HAS STATUTORY RIGHT TO ALTER ITS ARTICLES OF ASSOCIATION
2. ANY REGULATION DEPRIVING THIS RIGHT IS INVALID
3. FOR EXAMPLE A PROVISIONS IN THE ARTICLES THAT NO ALTERATION OF THE ARTICLE WITHOUT THE CONSENT OF THE A IS CONTRARY TO THE PROVISIONS OF THE COMPANIES ACT AND INVALID
4. A CO CAN NOT REPLACE ITS ARTICLES, ONLY THE REGULATIONS CONTAINED IN THE ARTICLES
5. COMPANY CAN ALTER ITS ARTICLES BY WAY OF ADDITION,DELETION,MODIFICATION,SUBSTITUTION OR IN ANY OTHER WAY ONLY IF WANTS

MEANING AND CONTENTS OF THE ARTICLE OF ASSOCIATION

MEANING AND CONTENTS OF ARTICLES OF ASSOCIATION

•  MEANING AND CONTENT OF ARTICLES OF ASSOCIATION
• COMPANY LAW 2013/CORPORATE LEGAL FRAMEWORK
• MEANING OF THE ARTICLES OF ASSOCIATION

1. IS THE SECOND MOST IMPORTANT DOCUMENT WHICH IN  CASE OF THE SOME COMPANIES HAS TO BE REGISTERED ALONG WITH MOA
2. CONTAINS THE RULES,REGULATIONS AND BYE LAWS FOR THE INTERNAL MANAGEMENT OR REGULATIONS OF THE AFFAIRS OF THE COMPANY
3. FRAMED WITH THE OBJECT OF CARRYING OUT THE AIMS AND OBJECTS SET OUT IN THE MEMORANDUM OF ASSOCIATION

• DEFINITION
• ACCORDING TO SECTION 2(5) OF THE COMPANIES ACT 2013,” ARTICLES MEANS THE ARTICLES OF ASSOCIATION OF A COMPANY AS ORIGINALLY FRAMED OR AS ALTERED FROM TIME TO TIME IN PURSUANCE OF ANY PREVIOUS COMPANIES LAW OR OF THIS ACT.

1. STATES THE RIGHTS AND DUTIES OF THE MEMBERS OF THE COMPANY
2. POWERS OF THE OFFICERS AND DIRECTORS OF THE COMPANY
3. DETERMINE THE RELATIONS BETWEEN COMPANY AND THE MEMBERS
4. ALSO DETERMINE THE RELATIONSHIP AMONG THE SHAREHOLDERS THEMSELVES
5. LAYS DOWN THE MODE AND MANNER IN WHICH THE BUSINESS IS TO BE CONDUCTED
6. MUST NOT VIOLATE THE PROVISIONS OF THEIR MOA

• ARTICLES PRESCRIBING REGULATIONS
• SECTION 5 OF THE COMPANIES ACT 2013 PROVIDES THAT :

1. CONTAIN THE REGULATIONS FOR THE MANAGEMENT OF THE COMPANY
2. ALSO CONTAIN SUCH MATTERS AS PRESCRIBED
3. MAY CONTAIN THE PROVISIONS FOR ENTRENCHMENT TO THE EFFECT THAT SPECIFIED PROVISIONS OF THE ARTICLES MAY BE ALTERED IF CONDITIONS OR PROCEDURES ARE  RESTRICTIVE THAN THOSE APPLICABLE IN THE CASE OF SPECIAL RESOLUTION ARE MET OR COMPLIED WITH
4. ARTICLES PRESCRIBING REGULATIONS
5. THE PROVISIONS FOR ENTRENCHMENT ONLY MADE AT THE EITHER AT THE FORMATION OF THE COMPANY/AMENDMENT IN THE ARTICLES AGREE TO BY ALL IN THE PRIVATE COMPANY OR BY SPECIAL RESOLUTION IN THE CASE OF PUBLIC COMPANY.
6. THE ARTICLES OF THE COMPANY SHALL BE IN RESPECTIVE FORM SPECIFIED IN TABLES F,G,H,I,J IN SCHEDULE I AS THE CASE MAY BE
7. A COMPANY MAY ADOPT ALL OR ANY OF THE REGULATIONS CONTAINED IN THE MODEL ARTICLES APPLICABLE TO SUCH COMPANY
8. NOTHING IN THIS SECTION SHALL APPLY TO THE ARTICLES OF THE COMPANY REGISTERED UNDER ANY PREVIOUS COMPANY LAW UNLESS AMENDED BY THIS SECTION

• CONTENTS OF THE AOA

1. NAME OF THE COMPANY
2. NUMBER AND VALUE OF THE SHARES AND DIFFERENT CLASSES OF SHAREHOLDERS
3. RULES REGARDING THE RIGHTS OF DIFFERENT CLASSES OF SHAREHOLDERS
4. PROCEDURE FOR MAKING THE CALLS
5. RULES REGARDING TRANSFER AND TRANSMISSION OF SHARES,FORFEITURES ETC

6. RULES REGARDING THE APPOINTMENT,REMUNERATION,POWER AND DUTIES OF THE DIRECTORS AND OFFICERS OF THE COMPANY
7. APPOINTMENT OF THE MANAGER
8. APPOINTMENT OF THE SECRETARY
9. RULES REGARDING THE NOTICE OF THE MEETING,VOTING RIGHTS,QUORUM,POLL AND PROXY ETC OF THE SHAREHOLDERS
10. RULES REGARDING THE AUDIT OF ACCOUNTS,TRANSFER TO RESERVE,DECLARATION OF DIVIDEND
11. RULES REGARDING THE BORROWING POWERS OF THE COMPANY AND THE MODE OF BORROWING
12. CONTENTS OF THE AOA
13. RULES REGARDING THE ISSUE OF THE SHARE CERTIFICATES
14. RULES REGARDING THE MAINTENANCE OF THE BOOKS OF ACCOUNT AND DIFFERENT KIND OF REGISTERS
15. RULES REGARDING REORGANIZATION OF SHARE CAPITAL
16. DIVIDEND AND RESERVES
17. CAPITALIZATION OF THE PROFITS
18. RULES REGARDING THE WINDING UP THE COMPANY

• ARTICLES OF ASSOCIATION
• U/S 5(1),7(1) OF THE COMPANIES ACT 2013,IT IS COMPULSORY FOR EVERY COMPANY TO HAVE ITS OWN ARTICLES AND FILE THE SAME WITH ROC
• MODEL FORM OF ARTICLES :-

1. SCHEDULE I TO THE ACT GIVES VARIOUS MODEL FORM OF MOA AND AOA OF VARIOUS TYPES OF COMPANIES
2. THE SCHEDULE IS DIVIDED INTO TABLES WHICH SERVE AS A MODEL FOR THE VARIOUS COMPANIES
3. ARTICLES OF PRIVATE LIMITED COMPANY

• A PRIVATE LIMTED MUST HAVE ARTICLES OF ITS OWN WHICH MUST CONTAIN THE RESTRICTIONS PROVIDED IN SECTION 2( 68 ) OF THE COMPANIES ACT 2013.

1. RESTRICTING THE RIGHT TO TRANSFER THE SHARES
2. EXCEPT IN CAS OF ONE PERSON COMPANY LIMITS THE NUMBER OF MEMBERS TO 200
3. PROHIBITS ANY INVITATION TO THE PUBLIC TO SUBSCRIBE FOR ANY SECURITIES
4. PRIVATE COMPANY HAVE LIBERTY TO ADOPT ALL OR ANY OF THE REGULATION CONTAINED IN TABLE F

•  AOA OF A PUBLIC LIMITED BY SHARES
• SECTION 5(7 ) PROVIDES THAT A COMPANY MAY ADOPT ALL OR ANY OF THE REGULATIONS CONTAINED IN THE MODEL ARTICLES APPLICABLE TO SUCH COMPANY
• A COMPANY MAY EITHER:

1. FORMULATE  AND REGISTER ARTICLES OF ITS OWN WITH IN THE PROVISIONS OF THE ACT AND MOA
2. ADOPT ALL OR ANY OF THE REGULATIONS CONTAINED IN THE MODEL ARTICLES TABLE F

• MUST HAVE THEIR OWN AOA:-

1. UNLIMITED CO
2. CO LIMITED BY GUARANTEE
3. PVT COMPANIES LTD BY SHARES
4. A PUBLIC LTD MAY HAVE ITS OWN AOA IF IT DOES NOT HAVE IT MAY ADOPT F TABLE

1. TABLE G—AOA OF CO LTD BY GUARANTEE AND HAVING SHARE CAPITAL
2. TABLE H—AOA OF CO LTD BY GUARANTEE AND NOT HAVING SHARE CAPITAL
3. TABLE I—AOA OF AN UNLIMITED COMPANY AND HAVING SHARE CAPITAL
4. TABLE J—AOA OF AN UNLIMITED CO AND NOT HAVING SHARE CAPITAL

• PRINTING AND SIGNING OF ARTICLES
  ( SECTION 7 ( 1)(a)

·         MUST BE PRINTED,DIVIDED INTO PARAGRAPH AND NUMBER CONSECUTIVELY

·         MUST BE SIGNED BY EACH SUBSCRIBER TO THE MEMORANDUM IN THE PRESENCE OF AT LEAST ONE WITNESS

·         PRINTED ON COMPUTER LASER PRINTER SHOULD BE ACCEPTED

• EFFECT OF MEMORANDUM AND ARTICLES

1. SECTION 10
2. SUBJECT TO THE PROVISIONS OF THIS ACT WHEN REGISTERED BIND THE COMPANY AND MEMBERS
3. ALL MONIES PAYABLE BY ANY OF THE MEMBERS BECOMES DEBT DUE FROM HIM TO THE COMPANY
4. ALTERATION OF AOA SECTION 14
5. A COMPANY HAS STATUTORY RIGHT TO ALTER ITS ARTICLES OF ASSOCIATION
6. ANY REGULATION DEPRIVING THIS RIGHT IS INVALID

• FOR EXAMPLE A PROVISIONS IN THE ARTICLES THAT NO ALTERATION OF THE ARTICLE WITHOUT THE CONSENT OF THE A IS CONTRARY TO THE PROVISIONS OF THE COMPANIES ACT AND INVALID
• A CO CAN NOT REPLACE ITS ARTICLES, ONLY THE REGULATIONS CONTAINED IN THE ARTICLES
• ALTERATION
• BY PASSING SPECIAL RESOLUTION
• A COPY OF SPECIAL RESOLUTION HAS TO BE FILED WITH IN THIRTY DAYS TO ROC
• EVERY ALTERATION MADE IN MOA OR AOA SHALL BE NOTED IN EVERY COPY OF MOA OR AOA
• ANY DEFAULT IN COMPLYING WITH THE PROVISIONS   THE COMPANY AND EVERY OFFICER IN DEFAULT WILL BE LIABLE TO A PENALTY OF 1000 RUPEES FOR EVERY COPY OF MOA OR AOA ISSUED