Study on law hills

  Registration and Incorporation Formation of a Company [S.3]: Under Section 3, a company can be formed “for any lawful purpose” by subscribing to the Memorandum and complying with registration requirements. In particular: a public company requires at least seven subscribers, a private company requires at least two, and a One Person Company (OPC) may be formed by one subscriber (OPC is defined as a private company with a single member). (The OPC’s sole member must nominate another person in the MOA to become member on the first member’s death.) Any such company may be either limited by shares, limited by guarantee, or unlimited. (E.g. Tea Assn. of India v. NDMC held that once properly registered, a company has a separate legal existence from its promoters.) Types of Companies: By definition, a public company has no restrictions on share transfers or maximum members and must carry “Limited” in its name. A private company must (among other things) restrict share tr...

  Disadvantages of Corporate Personality 1. Lifting the Corporate Veil Although a company is ordinarily a separate legal person, courts will pierce its veil in certain cases to hold the true actors liable. For example, if a company’s control reveals hostile or improper purposes, its character is determined (e.g. a company effectively controlled by enemy nationals was deemed an “enemy” company in Daimler Co. Ltd v. Continental Tyre ). Similarly, if a company is used primarily to evade taxes or defraud the public, courts disregard its separate personality. In Sir Dinshaw Maneckjee Petit (tax-evasion case) the company was held a mere façade to dodge tax. Likewise, courts treat a company as a sham or cloak when its form conceals fraud: e.g. in Skipper Construction Co. multiple family-owned companies were treated as one entity because they were “pure cloaks” for illegality. Courts also pierce the veil if the company is acting as an agent or trustee of others. For instance, a ...

  Corporate Personality Definition of “Company” . Under Indian law, a company is an incorporated association of persons. Section 2(20) of the Companies Act, 2013 defines “company” as “a company incorporated under this Act or under any previous company law”. In other words, any corporate entity registered under the present Act or earlier companies acts qualifies as a company. By fiction of law, such a corporation is treated as an artificial person distinct from its members, possessing rights and obligations of its own. Extent of Application (s.1(4)) . Section 1(4) makes clear that the Companies Act, 2013 applies broadly to modern corporate bodies, with specified exceptions. It expressly covers “companies incorporated under this Act or under any previous company law”. It also extends (subject to inconsistency) to insurance companies, banking companies, electricity companies, and other special acts. Thus the Act governs virtually all corporations in India, except where a spe...