Lecture Notes on the Companies Act 2013

Introduction

• Discussion on the importance of the Companies Act 2013
• Key topics: What is a company, its documents, features, historical background
• At least five questions from Companies Act 2013 appear in judiciary exams

Definition of a Company

• Origin: Derived from the Latin word ‘Company’
• Com = together, Panis = bread
• Company: An organization working together, legally registered
• In 1844, the English Companies Act was introduced, marking the beginning

Chronology of the Companies Act

• 1844: First English Companies Act
• 1850: First Companies Act in India (Joint Stock Companies Act)
• 1857: Joint Stock Companies Act, introduced limited liability
• 1860-1882: Amendments in Companies Acts
• 1913: Indian Companies Act 1913
• 1956: Companies Act 1956, 658 sections, 15 schedules
• 2013: New Companies Act 2013, 29 chapters, 470 sections

Legal Definition of a Company

• Companies incorporated under this Act (2013) or under any previous company law
• Defined in Section 2, Sub-section 20

Identity of a Company

• Artificial Person
• Legal Entity - Concept of a separate legal entity
• Perpetual Succession
• Members and company are separate entities
• Salomon v/s Salomon & Co Ltd (1897): Established the principle of a separate legal entity

Important Principles

• Principle of Separate Legal Entity
• Distinction of the company - company and its members are distinct
• Salomon case: The company’s experience and shareholder’s experience are separate

Key Documents: MoA and AoA

• Memorandum of Association (MoA)
  • Information on the objectives and activities of the company
  • Company name, state, objectives, member liability, capital
• Articles of Association (AoA)
  • Rules for the internal management of the company

Amendments and Procedures

• Name change, state change, office transfer
  • Special resolution and government approval required
  • Special resolution must be passed in a general meeting
  • Central Government approval necessary for name change

Citizenship and Nationality of a Company

• A company is a legal person but not a citizen of India
• A company does not have citizenship rights (Article 14 applies)
• STC case: A company is not a citizen but can benefit from rights

Review

• Periodic changes and acts regarding the concept of the company
• Limitations (Ultra Vires) on the company’s activities and their validity
• Registration and types of companies - special provisions for listed companies

Conclusion

• Understanding the concept, details, and managerial documents of a company
• Importance of MoA and AoA and their amendment process
• Broad perspective and understanding of the Companies Act 2013