Introduction of company law
It is key point only to remember company law, company law
A group of people association who comes together for a purpose to profit making can be called as the company.
Company= comp means coming together + pant means to earn the bread.
Definition of company
According to Chief justice Marshall
A company or corporate is an artificial being invisible, intangible existing only in contemplation of law being a mere creation of law it posses only the properties which the charter of its Corporation confers upon it either expressly or as incidental to its very existing.
History of the company legislation in India
Company stock act 1850—> first based on English companies stock act 1844.
Amendment of Company act in India
- Limited liability=1857 based on 1856 english act.
- 1882= with full amendment of english law.
- 1913= was based on English company act 1908.
- 1950 = H.C Bhaba committee 12 member as the company act of 1956.
- 2005= J.J. Irany committee which gave as the companies act 2013 with 470 sections, 29 chapter and 7 schedule.
Firms of business organization in comapny law
Collective group of the coming together to earn profit is organisation, on going activities is business organisation so the collective people comes together to form it.
7 types of business organization in company law :-
- Hindu undivided family
- sole peopertoship: single handedly , eg General store.
- Company:- coming together of the people for particular purpose—–} registered.
- Partnership: people coming together to repsents each other, mutual agency -one for all and all for one.
- statutory bodies: evolved all for any act/ tribunal.
- coperative societies : share leadership.- where people are together.
- Limited liability partnership: A feature of a company when any feature is mentioned in partnership, it is known as limited liability partnership.
- ownership
Company law section 2(20)
Incorporation must be registered.
Private company section 2(68)
2 minimum, maximum 200 member.
Public company section 2(71)
unlimited members.
Charcteristic of a company in company law
- Incorporated association :-The company must be registered under company law.
- separte legal entity:- lord Mac naughten said the company is law a different person all together form the subscriber.
- Case:- Salmon vs Salmon and co.lim(1895) The of lords, it was held that company is different from the member who form it and their liability is restricted to the extend of unpaid of shares if any even if He’s the founder or the com. Is 1 man company.
- Case:- lee vs lee and company it was held that lee is a separate person from the com. And the compensation to be paid to the widow
- Artificial person:- It exist only in contemplate of law. Imagination.
- Limited liability:- (section 3A) added by amendment of 2003 unlimited guarantee.
- Company limited by share.
- guarantee
- unlimited guarantee.
- Separate property
- Case:- macura vs northern assurance co.ltd(1925). The court observed no share holder has any right to any item of property owned by the company for he has no legal interest their in.
- Transferability of shares. section 44
- Perpetual successions:- being distinct from the members the death insolvency or retirement of its members leaves the company unaffected.
- Common seal:- section 22 A company may under it’s common seal through general or special power of attorney empower any person to execute deeds on its behalf.
- Right to sue
Difference between partnership and company
| Partnership | Company |
| 1) It doesn’t have a separate legal personality. 2)All of the partners dies or become insolvent the partnership gets dissolve. 3) A partner cannot substitute another person in his place unless all the other partners agree to the same. 4) Number of members, minimum 2 maximum 10. Banking business 10 Other business 20. 5) liability unlimited, the liability of partners is unlimited. | 1) A company is a leagal entity different from its members. 2)A company being a person different from the member, the member may come and go but the company not affected. 3) The shareholders of a company can transfer his share yo anybody he likes. 4) private company Minimum 2 member Maximum 50 member. Public Company Minimum 7 Maximum no limit. 5) liability limited The liability of a company is limited. |
Types of company
Basically there are 5 types of company mainly are given below;
- on the basis of incorporation
- chartered company
- east India company
- Bank of england
- statuary company < act of legislature and NGT
- registered company < company should be registered in the companies act 2013 in section 2(20).
- On the basic of liability
- limited by share
- company limited gurantee
- unlimited liability
- On the basis of number of member
- private company 2 to 200 members
- public company 7 to unlimited.
- On the basis of nationality
- domestic
- foreign( section 2(42))
- On the basis of ownership
- holding 2(46) 51% of shares
- subsdiary company 2(87)
- government company 2(45)
- one person company 2(62)
Reference: Orginal notes Written by Riya tiwari student of LLB from United University prayagraj Uttar pradesh.