Company Law Administration: Key Concepts and Frameworks
Company Law Administration Notes
Module 1
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Framework for Company Law Administration
- Understanding the foundations of company law is crucial for ensuring compliance and governance in business operations.
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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.
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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.
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LLP (Limited Liability Partnership)
- Combines the flexibility of a partnership with the benefits of limited liability, making it a popular business structure.
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Holding and Subsidiary Company (V.IMP)
- A holding company controls another, while a subsidiary is controlled and largely owned by another entity.
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Lifting the Corporate Veil (Common Law Exceptions)
- In certain cases, courts may hold company members personally liable by disregarding the separate legal entity principle.
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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.
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Contents of Memorandum and Articles (V.IMP)
- These are essential documents that outline the constitution and operational guidelines of a company.
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Doctrine of Ultra Vires (V.IMP)
- Acts beyond the powers given in a company’s memorandum of association are considered ultra vires and void.
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Alteration of Articles
- Modifying the internal regulations governing a company requires adherence to legal procedures.
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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.
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Deemed Shelf, Red Herring, Abridged Document (V.IMP)
- Key documents in financial offerings providing information to investors.
Module 2
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Types of Shares, Preference Shares (V.IMP)
- Preference shares confer priority over dividends and asset distribution upon liquidation.
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Transfer/Kinds of Share Capital & Allotment
- Share capital structure decisions impact funding and control within a company.
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Types of Debentures, Fixed and Floating Charge
- Debentures serve as debt instruments, with charges providing security.
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Appointment of Directors, Types of Directors (V.IMP)
- Directors are elected by shareholders and can be executive, non-executive, or independent.
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Role of Company Secretary (V.IMP)
- Key responsibilities include ensuring compliance, advising the board, and maintaining records.
Module 3
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Kinds of Meetings (V.IMP)
- Meetings are organized to make decisions and include AGMs, EGMs, etc.
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Requirements of a Valid Meeting
- Legal adherence includes notice, quorum, and procedures to ensure valid decision-making.
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Modes of Winding Up
- Companies may voluntarily or compulsorily wind up due to insolvency, decision by members, or court intervention.
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CSR Provisions and Applicability
- Corporate Social Responsibility involves voluntary efforts by companies for societal welfare.
Module 4
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Proxy (V.IMP)
- A proxy allows a person to authorize someone else to vote on their behalf.
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Virtual Meeting
- Technology-enabled meetings provide flexibility and accessibility for participants.
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Kinds of Resolutions (V.IMP)
- Resolutions guide decisions within the company and include ordinary, special, and unanimous types.
Extended readings: