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COMPANIES ACT 1956

COMPANIES ACT 1956. Company means -. An association of persons united for a common object . A Company formed and registered under Companies Act or an existing Company . Characteristics. Incorporated Association Separate Legal Entity Limited Liability Separate Property

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COMPANIES ACT 1956

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  1. COMPANIES ACT 1956

  2. Companymeans- • An association of personsunited for a commonobject. • A Companyformed and registeredunderCompaniesAct or an existingCompany.

  3. Characteristics Incorporated Association SeparateLegalEntity Limited Liability SeparateProperty Perpetual Succession Transferability of shares Common Seal Capacity to sue and besued

  4. FORMATION OF COMPANY • Promotion • Incorporation • Availability of Name • Minimum paid up Capital • Documents to befiledwithregistrar • Certification of Incorporation • Floatation or Raising of Capital • Commencement of Business

  5. Memorandum of Association • Is the foundation on which the structure of the company is based. • It contains the fundamental conditions upon which alone the company is allowed to be incorporated • Its five clauses provide the basic features of the company’s constitution. • A company cannot depart from the provisions contained in its Memorandum, however great the necessity maybe.

  6. Purpose • Intending shareholder can find out from the memorandum the field in, or the purpose for which the money is going to be used by the company and what risk is he taking in making the investment. • Any one dealing with the company shall know whether the contractual relation into which he is entering with the company is one relating to a matter within its corporate objects.

  7. Clauses • Name Clause • Registered office Clause • Object Clause • Liability Clause • Capital Clause

  8. DOCTORINE OF ULTRA VIRES • ‘Ultra’ means beyond, ‘Vires’ means power. • Any activity not authorised by the memorandum is ultra vires the memorandum.

  9. Consequences of Ultra Vires • Injuction • Breach of warranty of authority • Personal Liability of Directors • Ultra Vires Contracts

  10. Articles of Association • The articles of association are the rules and regulations of a company framed for the purpose of management of its internal affairs. • It defines the powers of its officers.

  11. The Articles usually contain following matters • Number and value of shares • Allotment of shares • Calls on shares • Forfeiture of shares • Borrowing powers • Directors, their appointment etc. • Meetings • Voting Rights etc

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