Company Law Administration: Key Concepts and Frameworks

Company Law Administration Notes

Module 1

1. Framework for Company Law Administration

   • Understanding the foundations of company law is crucial for ensuring compliance and governance in business operations.

2. Section 8 Companies

   • These are companies established for promoting charitable activities. They do not aim for profit and are granted certain exemptions under the law.

3. Types of Companies

   • Nidhi Companies: Non-banking financial companies aimed at borrowing and lending between members.
   • Foreign Companies: Companies incorporated outside but operating within the jurisdiction.
   • Government Companies: Companies where the government holds a significant portion of shares.

4. LLP (Limited Liability Partnership)

   • Combines the flexibility of a partnership with the benefits of limited liability, making it a popular business structure.

5. Holding and Subsidiary Company (V.IMP)

   • A holding company controls another, while a subsidiary is controlled and largely owned by another entity.

6. Lifting the Corporate Veil (Common Law Exceptions)

   • In certain cases, courts may hold company members personally liable by disregarding the separate legal entity principle.

7. Legal Position of a Promoter

   • Promoters play a key role during the formation of a company. They are involved from the idea stage to incorporation.

8. Contents of Memorandum and Articles (V.IMP)

   • These are essential documents that outline the constitution and operational guidelines of a company.

9. Doctrine of Ultra Vires (V.IMP)

   • Acts beyond the powers given in a company’s memorandum of association are considered ultra vires and void.

10. Alteration of Articles

    • Modifying the internal regulations governing a company requires adherence to legal procedures.

11. Constructive Notice & Doctrine of Indoor Management (V.IMP)

    • Constructive Notice: Public documents of the company serve as notice to outsiders.
    • Indoor Management: Protects outsiders dealing with the company, assuming internal procedures are followed.

12. Deemed Shelf, Red Herring, Abridged Document (V.IMP)

    • Key documents in financial offerings providing information to investors.

Module 2

1. Types of Shares, Preference Shares (V.IMP)

   • Preference shares confer priority over dividends and asset distribution upon liquidation.

2. Transfer/Kinds of Share Capital & Allotment

   • Share capital structure decisions impact funding and control within a company.

3. Types of Debentures, Fixed and Floating Charge

   • Debentures serve as debt instruments, with charges providing security.

4. Appointment of Directors, Types of Directors (V.IMP)

   • Directors are elected by shareholders and can be executive, non-executive, or independent.

5. Role of Company Secretary (V.IMP)

   • Key responsibilities include ensuring compliance, advising the board, and maintaining records.

Module 3

1. Kinds of Meetings (V.IMP)

   • Meetings are organized to make decisions and include AGMs, EGMs, etc.

2. Requirements of a Valid Meeting

   • Legal adherence includes notice, quorum, and procedures to ensure valid decision-making.

3. Modes of Winding Up

   • Companies may voluntarily or compulsorily wind up due to insolvency, decision by members, or court intervention.

4. CSR Provisions and Applicability

   • Corporate Social Responsibility involves voluntary efforts by companies for societal welfare.

Module 4

1. Proxy (V.IMP)

   • A proxy allows a person to authorize someone else to vote on their behalf.

2. Virtual Meeting

   • Technology-enabled meetings provide flexibility and accessibility for participants.

3. Kinds of Resolutions (V.IMP)

   • Resolutions guide decisions within the company and include ordinary, special, and unanimous types.

Extended readings: