Scoring & Importance: Part 2 is more scoring and important for exams.
Definition & Meaning of a Company
Legal Definition: "Company means" as per the legal description in law.
Cannot modify the legal definition in exams or legal documents.
Meaning: Association of persons, can be natural (humans) or artificial (companies).
Examples:
Natural Person: You and I
Artificial Person: A company like ITex or ABC Private Limited.
Formation of Companies
Private Company: Minimum 2 members.
Public Company: Minimum 7 members.
Example: Formation of ABC Private Limited with members including natural and artificial persons.
Company Acts History
1844: British Company Law introduced in England.
1850: Joint Stock Company Act introduced in India.
1956: First Indian Company Act after independence.
2013: Current Company Act in use.
Structure of Company Law 2013
Total Sections: 470
Total Chapters: 29
Schedules: 7
Key Concept: Sections help in locating specific legal themes, similar to page numbers in a book.
Administration of Company Law
Ministry of Corporate Affairs (MCA): Responsible for administration.
Regional Director: Oversees specific regional jurisdictions (7 regions).
Registrar of Companies (ROC): Present in each state, handles company registrations.
Important Committees
Baba Committee (1950): Led to the formation of the Company Act 1956.
JJ Irani Committee: Influential in drafting the Company Act 2013.
Key Features of a Company
Separate Legal Entity: Legally recognized as separate from its members.
Limited Liability: Members are liable only to the extent of their share value.
Perpetual Succession: Continues to exist irrespective of changes in membership.
Common Seal: Used to endorse company documents, managed by CS.
Transferability of Shares:
Public companies: Shares are freely transferable.
Private companies: Shares have restrictions on transfer.
Advantages of a Company
Distinct Corporate Identity: Lawsuits in the company's name.
Limited Liability.
Perpetual Existence.
Ease of Raising Capital: Through share issuance.
Disadvantages of a Company
Complex Compliance Requirements: Involves fees and formalities.
Public Disclosure: Information is publicly available, affecting strategic secrecy.
Taxation: Subject to corporate taxes.
Winding Up: Lengthy and complex process to dissolve a company.
Conclusion
The session introduced the basics of company law, its history, and the structural and functional attributes of companies as per the latest legal frameworks.
Introduction to the separate legal entity concept, management structures, and the roles of registrars and regional directors in the administration of company laws.
Future sessions will delve deeper into Chapter 1 and subsequent chapters to build a comprehensive understanding.