The principal points of distinction between a company and a partnership firm are as follows: Mayank is a student at Faculty of Law, Delhi University. This decision will depend on a number of considerations, including: For questions on access or troubleshooting, please check our FAQs, and if you can't find the answer there, please contact us. When the joint-stock companies were established, the object was that their shares should be capable of being easily transferred, [In Re. It is called an artificial person since it is invisible, intangible, existing only in the contemplation of law. Thus, in popular parlance, a company denotes an association of likeminded persons formed for the purpose of carrying on some business or undertaking. 3 Q.B. A Company is aA Company is a voluntaryvoluntary association of personsassociation of persons formed for theformed for the purpose of doing business, having apurpose of doing business, having a distinct name and limited liability.distinct name and limited liability. Company law ppt 1. Partnership iii. Introduction to Company Law provides a conceptual introduction, providing a clear framework with which to navigate the intricacies of company law. created by law); it is clothed with many rights, obligations, powers, and duties prescribed by law; it is called a ‘person’. The concept of ‘Company’ or ‘Corporation’ in business is not new but was dealt with, in 4th century BC itself during ‘Arthashastra’ days. This website made it easy to find notes and these company law notes are detailed and easy. In the leisurely past, merchants took advantage of festive gatherings, to discuss business matters. Nowadays, business matters have become more complicated and cannot be discussed at festive gatherings. Being the creation of law, it possesses only the powers conferred upon it by its Memorandum of Association which is the charter of the company. Definition of a "Company" A company is a "corporation" - an artificial person created by law. A company is not merely a legal institution. Limited Liability and Channelling Creditors’ Claims, 4. In terms of the Companies Act, 2013 (Act No. All legal proceedings against the company are to be instituted in its name. They can be incorporated under theThey … Your email address will not be published. Does the Judiciary face defeat at the hands of COVID–19? limited liability, In terms of the Companies Act, 2013 (Act No. No registration is compulsory for carrying on a business for gain by a Hindu Undivided Family even if the number of members exceeds twenty [, Dr. Avtar Singh, Company Law, Eastern Book Company, N D Kapoor, Elements of Company Law, S Chand. It is rather a legal device for the attainment of the social and economic end. 43 held that “no member can claim himself to be the owner of the company’s property during its existence or in its winding-up”. Similarly, a member of a company cannot sue in respect of torts committed against the company, nor can he be sued for torts committed by the company. Partners are the agents of the firm, but members of a company are not its agents. A shareholder cannot be held liable for the acts of the company even if he holds virtually the entire share capital. In the legal sense, a company is an association of both natural and artificial persons (and is incorporated under the existing law of a country). A company, being a legal entity different from its members, can enter into contracts for the conduct of the business in its own name. PRINTED FROM OXFORD LAW TROVE (www.oxfordlawtrove.com). The company, being a separate person, is the owner of its assets and bound by its liabilities. Accordingly, ‘corporation’ is a legal person created by a process other than natural birth. After reading this chapter you should understand: The scope of ‘company law’ The relationship between core company law, insolvency law, securities regulation and corporate governance. COMPANY LAW - LECTURE NOTES I. European Community Law, Paul Davies, Therefore, the company as a legal person can take action to enforce its legal rights or be sued for breach of its legal duties. Thus, perpetual succession denotes the ability of a company to maintain its existence by the succession of new individuals who step into the shoes of those who cease to be members of the company. In other words, a shareholder is liable to pay the balance, if any, due on the shares held by him, when called upon to pay and nothing more, even if the liabilities of the company far exceed its assets. It is, therefore, a combined political, social, economic and legal institution. The court did not restrain the exhibition of the cassette. After reading this lesson, you would be able to understand the historical development in the evolution of corporate law in India and England, emerging regulatory aspects including Companies Act, 2013, besides dealing with basic characteristics of the company and how it differs from other forms of businesses. However, there are restrictions with respect to transferability of shares of a Private Limited Company which are dealt in chapter 2. A company consists of heterogeneous (varied or diverse) members, whereas a Hindu Undivided Family Business consists of homogenous (unvarying) members since it consists of members of the joint family itself. Introduction to Company Law February 13, 2015 Part 1: Choosing the right business structure. 2020. A company’s right to sue arises when some loss is caused to the company, i.e. i.e i. A human being is a "natural" person. In order to enable it to carry out its actions without such restrictions and limitations in most cases, sufficient powers are granted in the Memorandum of Association. [British Thomson-Houston Company v. Sterling Accessories Ltd., (1924) 2 Ch. Revised to take into account the Companies Act 2006, and including a new chapter on international law which considers the role of European Community Law, this new edition is an introduction to company law. PRINTED FROM OXFORD LAW TROVE (www.oxfordlawtrove.com). Therefore it is capable of owning property, incurring debts, borrowing money, having a bank account, employing people, entering into contracts and suing or being sued in the same manner as an individual. As already noted, the members may derive profits without being burdened with the management of the company. Its members are its owners however they can be its creditors simultaneously. 588]. The capital of a company is divided into parts, called shares. Introduction to Company Law: Meaning, Nature and Characteristics. AIMS AND OBJECTIVES. These features are used to provide an organisation structure for the conduct of business. The word ‘corporation’ is derived from the Latin term ‘corpus’ which means ‘body’. Since a corporate body (i.e. Thus, if a director fails to disclose a breach of his duties towards his company, and in consequence, a shareholder is induced to enter into a contract with the director on behalf of the company which he would not have entered into had there been disclosure, the shareholder cannot rescind the contract. A company is a body corporate, can sue and be sued in its own name. Public corporations like Life Insurance Corporation of India, SBI etc., have been brought into existence by special Acts of Parliament, whereas companies like Tata Steel Ltd., Reliance Industries Limited have been formed under the Company law i.e. The proportion of capital to which each member is entitled is his “share”. shareholder control, A company, being a creation of law, can only be dissolved as laid down by law. All Rights Reserved. From the foregoing discussion, it is clear that a company has its own corporate and legal personality distinct which is separate from its members.
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