What are the Doctrines in the Company to protect

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Doctrines in the company

The doctrines is the protector, of the invest of the share holder by isuring that the companies fund are not vested in an unauthorised activity. To protect of the creditors.

List of the doctrine in the company to protect the creditors

Doctrine of ultravires

  • CAse : Ashbury railway carriage company v/s richie
    • There form an act of ultravires to company means an act done beyond authority of company act in the leading and it was held that the contract was void.
  • Expection to intravires
    • An act ultravires the memorandum but intra vires the company act can be ratified
    • An act ultravires the power of the discussion but the intravires the company act and article can be ratified.
    • An act ultravires the article but intravires the company act or memorandum can be ratified.

Doctrine of Alterego

  • Case: Lenards carrying company limited v/s asiatic petroleum limited 1995
    • the share holders directors and affairs of the company who mange the affairs are consider as the outer ego of the company.
  • Function of the article section 2(5)
    • the article pay a part subsidary memorandum of association they accept the memorandum as the charter of incorporation and so acepting it, the article proceeds to define the duties and the power of the governing body as between themself and the company.
    • It defines the mode and form in which the business of company to be carried upon.
    • It defines the mode and form in which changes in the internal regulation of the company may from the time to time be made.
  • Salient features of article of association
    • In section 5 of the section 5(1) contains regulation
    • section 5(2) matter necessary for management
    • section 5(3) provision of intrechment (amendment)
    • section 5(4) manner of intreachment
    • section 5(5) notice of intreachment where the provision article in the instruement are company give notice to the register such provision.
    • section 5(6) format.
  • regulation regarding the alteration of article section 14, 15. by special revolutions.
    • subject to the provision this act and its memorandum of company may by a special resolution after its alter is article.
  • Filing a copy to registraor
    • A copy of special resolution must be fullfilled with the register within the period of 15 dsys.
  • Limitation on Alternation
    • It propose alternation should nor contraary the provision of company act and memorandum.
    • it should not bonafied to company.
    • alternation and be retrospecified effect.
    • legal effect in section 10.

Doctrines of constructive notice under section 399.

  • the effect of the doctrine of the constructive notice is harsh on the person to who wishes to transact with on the cmpany in put the liabilty on a person transacting any business with the company to with all the document available in the public domain.
  • to insure that his contract conferms to the rules of the company.
    • case: Kotla venkat swamy v/s rama murty.

Doctrines of indoor management(it protect public)

  • Case: royal british v/s turquant 1856.
    • it was also known as turquant rule. On one hand doctrine of constructive notice is advice to protect the company against the outsider on the other hand doctrine of indoor mangement was meant to protect the third party.
  • Lord herly said that their are bound to know external position but are not bound to known as indoor management of company.
  • Exception : where the outsiders had the knowledge of irregulatory.
    • Case: howard v/s patent invery company
      • it was held that since the plaintiff there aws the director and well aware of the rule and internal irregulataries which could not be liable.

Section 399: The provision relating to filing of application, document, inspection, etc.

Reference: Original note written by Riya Tiwari student of LLB of United university Prayagraj Uttar Pradesh.

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