LEGAL ENVIRONMENT OF INDIAN

BUSINESS

BBA Semester 4

Syllabus

Section I

Indian Companies Act (1956)

Meaning & Nature of Company-Advantages & Disadvantages, lifting of corporate veil, company is

not a citizen

Registration & Incorporation - Procedure of registration, certificate of incorporation, pre-

incorporation,

Section II

Contract, commencement of business.

Memorandum and article of Association. - contents, main misrepresentation remedies for

misrepresentation (Sec. 56 and 61).

Section III

Directors - as agent, trustees, powers & duties, Managing Director - appointment Disqualification

& termination.

Meaning – Statutory, Annual general & Extra - ordinary General Meeting, power of company Law

Board to meeting. Requisitions of a Valid meeting, voting, resolution & minutes.

Important Links (websites)

http://www.mca.gov.in/

http://en.wikipedia.org/wiki/Ministry_of_Corporate_Affairs

http://en.wikipedia.org/wiki/Companies_Act_1956

http://www.hanumant.com/CompanyLaw-ByAvinash.html

http://www.legalserviceindia.com/company%20law/companylaw.htm

Unit1

The Company

Forms of Business Ownership Organisation

Business Enterprise

Private Sector

Non-Corporate

Sole Proprietorship

Partnership Firm

Joint Hindu Family Firm

Corporate

Joint Stock Company

Co-Operative Society

Joint Sector

Joint Stock Company

Co-Operative Society

Public Sector

Departmental Undertaking

Public Corporation

Government Company

Companies Act and its

Administration

The companies Act 1956

constitutes the company law

in India.

The act contains 658 sections

and 15 schedules.

The Companies

(Amendment) Act 2006:-

MCA (Ministry of Company

Affairs

MCA-21 (e-Governance,E-

filling)

DIN (Director Identification

Number)-Section 266A to

266G

The companies Act 1956

(Special features):

LE of IB Links\Indian-

Companies-Act-1956.pdf

Special features: The

Companies Act 2013

Number of schedules : 7

Number of chapters: 29

Number of sections: 470

LE of IB Links\companies-act-

2013-Key-highlights-and-

analysis.pdf

Administration:

It is Administered by the Central Government through the Ministry of

Corporate Affairs, Company Law Board and the Registrars of

Companies.

The Company law board (day to day administration) has set up 4

regional offices with head quarters at Mumbai,Kolkata,Chennai and

Noida headed by regional directors.

Registrar of Companies are there in each state of India (State

capital).

ROC are Appointed by central government of India.

ROC or registrar of companies is a public office where companies

are required to file documents and returns according to the

provisions of law.

Public is authorised to inspect the same on payment of a prescribed

fee.

The Companies Amendment

Acts

Scion 3(1) and (2) of the companies Act,1956 define a

company as

“A company formed and registered under this act or an

existing company”

An existing company means a company formed and

registered under any of the former companies acts.

Definition of Company

A company is an incorporated association,which is an

artificial person created by law,having a separate entity,with a

perpetual seccession and a common seal.

Haney

LE of IB Links\1The Company Act.docx

LE of IB Links\2Companies Act 1956.docx

Characteristics of Company

LE of IB Links\CHARACTERISTICS OF A COMPANY.docx

Company & Partnership Distinguished

LE of IB Links\4Distinction between Company and Partnership.docx

Difference between a Partnership & a Company

Partnership Company

Creation By an

agreement/Registration

under Partnership Act

,1932,is optional

By registration under

companies Act,1956

Number of Members Min.2-/Max 10(Banking),20

(other business)

Private-min-2 to

max.50/Public min-7 to

max-No limit

Legality of existence No legal existence apart

from its members(firm and

partners are one and the

same)

Separate legal entity

Property Belongs to individual

partners

Belongs to the company

Contract Partners can not do so with

the firm/but can do so with

other partners

Shareholders may enter

into a contract with the

company

Contd.. Partnership Company

Creditors The creditors of partnership

firm are the creditors of

individual partners

The creditors of the

company are not the

creditors of individual

shareholders

Mutual Agency Partners is an agent of his

firm

Shareholder is not an agent

of the company

Liability Unlimited Limited

Transferability of shares Can not transfer without

consent of other partners

Freely transferable(Public)

Restricted in Pvt. Company

Continuity Not perpetual Perpetual

Management Partners participation Shareholders does not

Definition of powers In partnership deed Memorandum (MoA & AoA)

Statutory obligations

(account

maintenance/distribution

of profit etc.)

No Subject to Companies Act

Advantages & Disadvantages of Incorporation or

Company

LE of IB Links\5Advantages & Disadvantages of incorporation.docx

Lifting the veil of Corporate

Personality

LE of IB Links\6Lifting the Veil of Corporate Personality.docx

Company is not a citizen

LE of IB Links\7Is company a citizen.docx

Illegal Associations

LE of IB Links\8Ille g a l A s s o c ia tio n.docx