Page 139 - DCOM404_CORPORATE_LEGAL_FRAMEWORK

Corporate Legal Framework

Notes

Gurpreet Gill vs. Pumpkin Studio (P) Ltd. (2009)

he Board Meeting and the General Meeting held in the absence of proper and valid
notice to the directors and/or shareholders shall be invalid and all the resolutions so
Tpassed are null and void. If the petitioner has been outsted as a Managing Director
and the Respondent has been installed in his place, it shall amount to oppression. In the
absence of evidence of service of notice upon either the Director or shareholders, the
presumption about the minutes cannot be drawn in terms of Section 195 of the Companies
Act, 1956.
In case of family owned company, the principal of partnership shall be application and
when agreed ratio of directorship has been disturbed, then it shall amounts to oppression

7.12 Summary

The word ‘company’ denotes an association of person to achieve some common objective.
In Legal terminology, a company when incorporate becomes a legal person, and
consequently, has certain distinguishing features.

The most important feature is that a company is an entity district from its members and is
an artifi cial person.

A creditor of accompany connot file a suit against the member of the company for recovering
the amount due. In a way, a veil is thrown around the members.
This is known as the veil of corporate personality. But there are certain situations when the
veil may be lifted and the company be identified with the members of the company.

The Companies Act 1968 has made a provision for the registration of different types of
companies. But most common of these are private companies and public companies.

The whole process of formation of a company may be divided into four stages; namely,

(i) promotion, (ii) registration, (iii) flotation, and (iv) commencement of business.

The certificate of incorporation, issued by the registrar, signifies that a company with its
own entity distinct from the members who constitute has come into existence.

A public company has to obtain another certificate before it can commence business. This

is known as certificate to commence business.
Foreign Company is a company incorporated in a country outside India and has a place of
business in India.

7.13 Keywords

Companies Act, 1956: The Act contains the mechanism regarding organisational, fi nancial, and
managerial and all the relevant aspects of a company.
Private Company: A private company can be formed by merely two persons by subscribing their
names to the Memorandum of Association.
Public Company: A public company may or may not invite public to subscribe to its share
capital.

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