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MA'AM APPOINTMENT OF DIRECTOR KIS PART MAIN HAIN?

Ab pta lg rha commerce walon ko bhi law aata hai... Respect from law faculty

@theoryguru 7:22 190+240 toh 430 din hua saal mein toh 365 din hi hote hai .

Please make more videos of other important concepts.. It's very useful and helpful for ussss...😢😢 Your way of teaching and notes are very understanding .. Please upload more videos of other important concepts.

Thanks madam

Thanks, your Vedio Is very helpful ❤

Madam, we need BOCW act video

We need BOCW act Details, please make a video once

Thank u so much ma'am Aap bahut achhse explain ki 😊

👍👍👌🌹

Madam last point I couldn't understand. So, please explain it why 2 years

Mam for ur kind information 1982 amendment definition force m abhi tak nhi aayi h

Thanks madam, your teaching & explaining skill is Excellent.

Ma'am creches ka provision section 48 mein hai

Awesome

thankyou so much

Thankyou❤️

amazing

Your video makes everyone smile really good explanation mam😊❤

Cute mam

madam custom is not custom department 😂. Its the custom of that particular business

very Nice teaching

Thanks❤

Whether holiday & week off included in el counting

Can you please explain section 79 explanation 2

Section 25FFA: though you are saying less than (<), the sign in the slide is of greater than (>)

It appears, Section 25-E is the correct reference of Workman Not entitled to compensation in certain cases. Please check. However, thanks for all good videos you have made and shared. Best regards

You rock mam

Very good Mam Thanks

Video ka second part ka link de do description me, ma'am

Valid CONTRACT - MUST BE VALID Two parties - ATLEAST TWO PARTIES GOOODS - MOVABLE PROPERTY OTHER THAN ACTIONABLE OR MONEY OR IMMOVABLE PROPERTY Agreement to sell - Immediate transfer or Agreement to transfer the Physical possession of goods Price - IT MUST BE IN TERMS OF Money Rupya Rokda

While a person enters into contract it is automatically implied that he's aware of terms and conditions of moa. Protects company from outsiders - doctrine of contructive notice. According to lord hatherely Indoor management- protects persons outside company. Person transacting business with company deemed to have notice of what they would have discovered by making search at roc's office. Roc can discover only as much as he has. Deemed to have notice. You cannot expect roc to have knowledge of what is going on within company. Royal British bank vs turquand Authorisation from share holders required for director to borrow money. Directors borrowed money from T. T assumed moa complied to. Directors responsible for mere internal irregularity. Mr T can sue company on strength of bond. As he was entitled to assume that necessary resolution has been passed. Exceptions of indoor management Knowledge of irregularities person who has knowledge of non compliance not entitled to claim money. Negligence: circumstances under which he could have discovered irregularities had he made proper enquiry. Forgery Rule of turquands does not apply where document is forged. Eg: • Ruben LENT MONEY to a company on the SECURITY of a SHARE CERTIFICATE SECRETARY had FORGED the signature of the 2 DIRECTORS & had affixed the SEAL on the certificate without authority •The company refused to REGISTER the SHARE CERTIFICATE RUBEN CLAIMED DAMAGES based on rule but rule did not apply where document was forged. Acts outside apparent Authority Exceeds actual authority Turquads rule not apply P accepted tp of company from accountant. Transaction beyond scope of accountants authority thus it is void. No knowledge of contents of articles Person who has not read the memorandum or article can't rely on statement contained therein

Doctrine of constructive notice Once moa and AOA registered with roc it becomes a public document Section 399 Can be inspected by anyone by electronic means On payment of prescribed fees Section 17 rule 34 of company incorporation rules 2014 company shall upon payment of prescribed fees send copy of moa and aoa within 7 days. If this is not done described every officer liable for payment of prescribed fees rs 1000 per day until it continues or rs 1 lakh whichever less.

Doctrine of ultra vires Beyond the power of legal authority Company has power to carry out object set up in moa Can't go beyond the scope of moa Or any activity not expressly nor impliedly authorised by moa. Ultra means beyond vires means powers Definition Company act legal but not authorised by object clause of moa Transaction ultra vires company cannot be binded and third party can't sue company. Transaction is ultra vires can't be ratified subsequently even if approved by all share holders. Person uses money for ultra vires transaction but can't recover money. Can recover goods if identified. Act is ultravires against director but written in moa can be re written If against aoa, article can be altered by passing special resolution. Consequences Contract void ab initio Cannot be ratified Even if all share holders agree Complaint to be filed against company if it's indulging in ultravires Within 6 months date of knowledge Injunction authoritative warning Restrained by injunction Breach of warranty of authority Directors are agents of company If director is aware that ultra vires contract entered into. Action may lie against director. Personal liability of directors If money used unlawful activities Ultravires contract Outside object of company Non binding non enforceable Void no legal effect Ultra vires acquired property Company can protect property Acquired by ultra vires expenditure Recover damages for injury Ultra vires borrowings Person lends money to company Company has no borrowing powers or already exceeded them Borrowing is for the purpose which is ultra vires Contract of loan is void Ultra vires torts Company liable for torts or crimes stated in the ambit of its objectives If ultra vires personal liability Exceptions to doctrine of ultra vires An act which is intra vires to company but outside authority of directors ratified with shareholders in proper form. Exceptions 1. An act which is INTRA VIRES the company but OUTSIDE the AUTHORITY of the DIRECTORS may be RATIFIED by the SHAREHOLDERS in PROPER FORM 2. An act which is INTRA VIRES the company but DONE in an IRREGULAR MANNER may be VALIDATED by the CONSENT of the SHAREHOLDERS 3. If the company has acquired any PROPERTY through an INVESTMENT which is ULTRA VIRES, the COMPANY'S RIGHT over such a PROPERTY shall still be SECURED Though not expressly stated in memorandum they are deemed impliedly within authority of company. Not ultra vires Ultra vires against aoa - can edit the same.

Memorandum of association Contains the object for which company is formed. Identifies the possibile scope of its operations beyond which actions can't go. Defines and confines power Fundamental conditions upon which company incorporated If done beyond moa then it is ultra vires. Public document available for inspection Intending shareholder who contemplates investing capital should know what field it is to be put at risk. Without reasonable doubt Matter within its corporate objects Important for shareholders or person with contractual relationship with company. Contents Name clause 4(1)(a) Registered office clause Object clause Liability clause Nomination or succession clause (in case of OPC) Association or subscription clause Capital clause 4(1)(e) Liability clause 4(1)(d)

After promotion - incorporation Lawful purpose Steps before proceedings with the procedure. DIN (director identification number) to be obtained Digital signature of promoters Both DIN and Digital signatures registers with mca portal After registration and verification of DIN and Digital signatures following steps: Availability of name: find out the availability of proposed name from roc. Required to select atleast 6 alternative names order of preference. Roc within 7 days regarding approval or rejection of name. Once approved reserved for 60 days. If not incorporated can be allotted to other applicant. Moa Is a charter legal document or a company. Includes: objective, name, address of registered office, capital which the company authorises to rise , liability of members. AOA: company internal management rules and regulations Declaration Advocate, ca, cost accountant cs director managers or secretary should declare that requirements of this act have been complied with. Affidavit: from each of the subscribers to memorandum and person mentioned as first director all docs filed with roc true to best of belief and complete Correspondence address Reg office address permanent address Correspondence Particulars of subscribers and first directors Name, sir name, residential address, nationality and id proof. Particulars of interests of first directors in other firms or body corporate Power of attorney non judicial stamp paper Consent of directors (266) in public Ltd company not appointed as director until written consent to registrar. Particulars of directors with DIN Filing of agreement - copy of agreement while entering into agreement Registered address Statutory declaration of compliance 3) registration by roc After being satisfied will register place and name on register of companies statutory requirements should be complied with. No option if complied. 4) form 11 - incorporation certificate issued by registrar From date on certificate of incorporation 7(2) corporate identity number distinct identity no. Registrar allots Legal effects as per s.9 same as characteristics of company Floatation or raising of capital Certificate of incorporation After receiving CERTIFICATE OF INCORPORATION, COMPANY is ready for flotation i.e. it can go ahead with raising capital necessary to commence business PRIVATE COMPANY is PROHIBITED from INVITING PUBLIC TO SUBSCRIBE to its share capital It has to raise the necessary capital from FRIENDS & RELATIVES by PRIVATE AGREEMENT Public company raise capital under public subscription- every public company should issue prospectus file statement in lieu of prospects with roc I'm case capital to be arranged privately 4) commencement of business With effect from 29 may 2015 Immediately after obtaining certificate of incorporation Section 11 regarding commencement of business had been completely abolished.

Rights and liabilities of promoter Rights 1) right to receive preliminary expenses Registration and setting up of company. If not mentioned in aoa, it becomes ultra vires payment. From board of directors 2) right to recover proportionate amount from co promoters No secret profits Jointly liable for secret profits for mistake in prospectus Right to remuneration Fully or partly paid up shares Debentures Commission Lumpsum amount Only if contract exists in this respect Liable Company incorporated - false or incorrect information liable under s.447 S 26 prospectus what to be included if held for non compliance of this. Bearing loss or damage because of misleading statement in prospectus Compensation under 35(1) Fail to make full disclosure or non disclosure promoter fine if 50K or 5 times amount of benefits accruing If divert funds of company 266(2) tribunal punishment upto 6 months. Non compliance with liquidation 284(2) 6 months punishment Fine 50 K If liquidators report alleges fraud in promotion and formation of company promoter liable for public examination under 300. Promoter has misapplied or retained property of company. Promoter can be sued s. 340

Formation of company Steps Promotion of company Incorporation Floatation or rising capital Promotion of company Preliminary stage Registration of company Process of organisation and planning of finances. Persons who undertake task of promotion are promoters. Who is a promoter 2(69) Those who have been names in prospectus or identify in 92 under annual return has control over affairs directly or indirectly, shareholder/ director whose advice, direction, instructions based on which BOD works. Functions of promoter 1) discovery of idea Set up new business Expand existing one Analysws amount of capital required Degree of risk involved 2) detailed investigation Cost, profitability, production process, demand of product Help of ca 3) assembling resources Contract for purchase of material, land, machinery, staff recruitment 4) preparing preliminary documents Moa, aoa, prospects 5) Enter into priliminary contracts Promoters sign contract with parties Company approves contract after incorporation If not approved, promoter liable 6) name of company: different 7) appointment of bankers, solicitors and underwriter (assurance that if public does not subscribe shares, I will purchase. Availablity of capital bu sale of company's securities) will take remaining shares Solicitors - deal with legal matters Bankers- smooth financial dealings Legal promoters Fiduciary position Relationship between 2 parties that obligates one to act solely in interest of others. Promoter can't make directly or indirectly any profit at expense of company without its knowledge Where disclosure failed to be made full disclosure of profits Company may sue hum for damages for breach of fiduciary duty. Recover from secret profits 2) can't derive profit from sale of own property to company Unless all material facts disclose. Under this situation company may Repudiate (reject) the sale or affirm (accept/ valid) the contraft and recover profit made. Erlanger vs. Sombreri Phosphate company 1878 Syndicate: group of individuals or organisation combined to promote common interests Syndicate - head was e. E purchases island containing mines of phosphate. E formed company to buy this island. Contract between x (nominee or syndicate) and company at 1,10,000 pounds. Details were not disclosed to shareholders or directors. Company now should rescind contract of sale. Can make profit only if company agrees. 3) any promoter who wishes to sell own property to company disclose interest in transaction Disclosure nay be made: a) board of directors b) aoa C) prospects d) existing or intended shareholders directly. 4) promoter shall not make unfair or unreasonable use of position. He must take care to avoid anything which has appearance of undue influence or fraud.

One person company: Companies act 2013 introduced this concept. Provides benifits of both types of business i.e., sole proprietorship and public company. According to 2(62) has only one person as a member. All legal and financial liabilities are limited not unlimited. 2(68) act provides for the definition of one person company to include opc. Provisions applicable to private company applicable to one person company. According to s.3, opc will be treated as private company for all legal purposes Provisions regarding formation of opc 1) one person should subscribe his name to moa 2) comply with requirements of act 2013 in respect of registration. 3(1)(c) 3) only Indian citizen or resodent of india is eligible to incorporate 4) memorandum should indicate nominee become member of company in event of subscriber's death or incapacity. Nominee person may withdraw his consent in prescribed manner. Member of opc may at anytime change the nominee in prescribed manner. 6) intimate change to ROC within time and manner as may be prescribed Penalty If OPC or officer not comply with provision, Fine upto 10 K and further find per day 1000 rs till default continues.

Kinds of company Public company, private company, difference between private and public, conversation Public company: 2013 act section 2(71) which is not a private company. Minimum paid up capital as prescribed. According to companies ammendment act 2015, no requirement of minimum paid up capital. Further : private company which is a subsidiary of public company. Will also be public company. Must be atleast 7 ppl. Shares of public company dealt with on stock exchange. Public company unless clear from constitution that it's private company. Private company 2(68) Has minimum paid up capital as prescribed by article. According to companies ammendment act 2015- no minimum paid up capital. Restrict right to transfer shares. 2-200 members. Earlier 50 members. Prohibits invitation to public to subscribe to shares and debentures. Difference Minimum members Maximum members public - limitless Restriction on name public - limited private - private ltd. Invitation to public - issuing prospectus mah invite public to subscribe to its shares. Cant extend in case of private. Issue of share warrants: detachable and freely transferable warrants. Public company can issue and private company cant. Transferability of shares. Public company shares are freely transferable but pvt company restricted. Directors public company - min 3 private compsny 2 Staturory meets: public company should and make reports and file it with registrar . Not required private companies. Quorum: unless stated otherwise in article, 5 members in public. 2 members in pvt. Restriction: appointment of directors. 4 steps in public company. Director file with registrar consent. Sign memo. Can't vote or take part in discussion. 2/3rd directors of public company must retire rotation. Not apply to pvt. Managerial remuneration: should not exceed 11% of net profit public company. No restriction in private. Conversion. Public to private 1) special resolution (general - decision without notice) (special - special notice to all members this resolution is passed to take important decision, copy delivered to registrar, vote casr in favour of resolution must be 3/4 2) name of company - ltd to pvt ltd. 3) approval of tribunal s.14(1) 4) filing with registrar section 40(2) copy of approval + printed article of altered articles. File with registrar. Within period of 15 days. Registrar shall register same. Private to public Special resolution Special notice Imp decision Copy to regustrar 3/4 voting Name of company: pvt ltd to ltd. Approval of tribunal 14(1) Filing with reg 14(2) 2)

Staturory exceptions: 1) mis statement in prospects section 34& 35 As a consequence of mis statement in prospects. If any person sustained loss or damage. Company and every person including director at the time of issue of prospectus, expert (26(5)), promoter liable to pay damage for loss or damage. 6-10 months imprisonment Or fine of amount of fraud or amount x 3 2) misdescription of company's name (section 12) company's name printed on hundies, promissory notes and bills of exchange If default made Company and every officer liable who's in default penalty of Rs 1 K per day until default continues not exceeding 1 lakh. Cheque signed in wrong name. Director held persknally liable. 3) failure to refund application money (s.39) Minimum subscription or shares should be 90% of shares when shares issued to public. Within 30 days prospectus issued or other period prescribed by sebi. If minimum subscription does not happen amount to be refunded within 15 dags from closure of issue. If money not refunded, the directors and officers in default jointly liable + 15% of interest. After 15th day 1000 Rs per day until money repaid. Fine not more than 1 lakh. 4) investing of ownership of company (s. 216) Central government may appoint one or more inspector to investigate matters relating to company and report the matters and for purpose determining true person. Who are or have been interested in the success or failure of company. Who have or have been able to control or materially control affairs of company. 3) fraudulent conduct 339 In course of winding up. Liquidator finds business in company that intends to fraud creditors. Tribunal on the application of official liquidator. Person, director, manager or officer knowingly carrying on business in manner foresaid shall be personally liable without limitation of liability. 6) liability for ultra vires act: company works within the limit of moa. Company's activity beyond scope of moa. Every director and officer of company shall be personally liable for ultra vires acts (act done beyond ones legal power) Commonly law exceptions: DiWali Pe We Pay Approx PAs 1/2 FD

Common law exceptions 4) company acting as agent of shareholder. English company with capital of 100 shares. 90 acquired by American 10 by British. American United States film company director. Company made film called monsoon. Company financed film. Court refused to agree film was made by British company. Company was merely the nominee or agent of United States film company. 5) protection of revenue: court may disregard corporate entity Where it was used for tax evasion. Invest into 4 private companies. Dividend and interest credited into the companies the amount was handed back to person in the form of loan. In orde to divide super tax he divided income into 4 tax to avoid tax liability. As company did no business the four companies were him himself. Avoidance of welfare legislation in order to avoid the payment of bonus. Supreme court lifts veil. Profits split into 2 parts in order to ensure reduction of bonus. Invested in subsidiary. Subsidiary company was disregarded by supreme court. Punishment for contempt of court: if contempt done by company persons responsible for court contempt will be punished. Brothers start firm - 2 partners- agreed to sell 2 floors. Cancelled agreement. Court restrained firm from selling property. The brothers converted the two floors into company. Chairman and managing director. The brothers sold the properties in the name of the company despite restraint order. But it was held that once corporate veil lifted it was evident that the orders were disobeyed. 8) ascertaining true nature of transaction if alleged claimed as sham Court justified to do this. Real parties to sale and whether it's genuine. 9) determination of technical competence of company: experience of promoters and directors is the experience of the company. 10) formation of subsidary company to act as agent Recent decision of supreme court Holding company has 100 % of subsidary company's shares. Latter is only created for purpose of holding company.

Lifting of corporate veil Ammended by 2013 act Introduction Principle of seperate entity regarded as a curtain/veil/shield curtain between company and owner. Company can't technically do something fraudulent as it's an artificial person. The veil is metaphorically lifted. Circumstances where corporate veil can be lifted 1) common law exceptions (10) 2) statutory exceptions (3) Common law exceptions 1) determination of character Company not natural person with mind. But it may assume enemy character when people in control of the company are residents of an enemy country. Residents are acting under the direction and control of enemies. Leading case: Daimler co ltd vs continental tire rubber Ltd 2016. Company incorporated in England. Selling of motor tires manufactured in Germany. German company purchased shares of company C in bulk. All directors were German residents. Company c commenced action to recover debt. House of lord held that company c was enemy company and was debarred from maintaining action. Whenever character of company to be determined corporate veil to be lifted. 2) where company is a sham (false) Court will lift veil Company incorporated for illegal or improper purpose. Person borrows money from company A and B - he and his son were only members. Lending company can attach assets of all the three companies. As they were created to good wink 3) prevention of fraud or improper conduct Company incorporated for evading contractual and statutory obligation. Court may disregard the seperate existence of company. Leading case: Guilford motor company limited vs horn: Horne signed an agreement with his employer that after termination of employment he would not solicit (try to obtain) employers customers for certain period of time. But as soon as termination - he made a company and sent out circulars to former employer's customers. Court against Horne, lifting corporate veil. Horne represents the company

Ammendments during 2013 and 2015. 3) limited liability: liability of two types - limited (pay as much as you have agreed to) and unlimited (you pay as much as you owe) whether limited or unlimited liability mentioned in moa to be submitted to registrar. Investor takes decision whether to invest based on rules and regulations. Limited by shares: members liability limited by amount unpaid on the share held by each member. Value of shares - shares paid. The amount x number of shares. Limited by guarantee: amount guaranteed by him in the memorandum. (Eg: will contribute upto one lakh) 4) seperate property in its own name - buy, enjoy and dispose off. Leading case: Macaura v. Northern Assurance Company Ltd. Mr M had all shares of a timber company except one. He insured the timber of company in his own name. The timber was destroyed by fire. M claimed loss from insurance company. Insurance company was not liable to him because the shareholder can't unsure company's property in his own name. Company's asset to be insured in its own name. 5) perpetual succession: section 9 of company's act. Company never dies like natural person. Despite insolvency or death of a person it doesn't affect company. Only one situation it winds up. Company's continuation is affected if wounded by owner or court. 6) transferable of shares: section 56. Shares are freely transferable can be sold or purchased in share market. 7) common seal is a substitute for its signature with effect from 29 may 2015, common seal section was 9 it was omitted. If company no common seal authorisation under 22(2) can be given by 2 directors signature or 1 director and company secretary. Common seal is thus not mandatory. 8) capacity to sue and be sued: legal person. Can sue and be sued in its own name. 9) company is not a citizen: Characteristics: Is (incorporated association) lockdown (legal) session (seperate property) Mai P(perpetual succession) T(transferability of shares ) classes (common seal) toh Chal (capacity to sue and be sued) hi nahi (not a citizen ) rahi

Characteristics of company 1) incorporated association (formed into a legal corporation) company comes into existence upon incorporation or registration under companies act. Joint stock company incorporated - as a public or private minimum number of persons required - 7 people private 2 people. Companies act 2013 section 3 permits OPC also. 2) Seperate legal entity: once company incorporated considered legal and seperate entity. Owner is different from company in the eyes of law. Owner has own seperate entity. Company has the right to purchase and transfer property in its own name. Leading case : Saloman v Saloman and co ltd 1897. Saloman had a boot business which he sold to Saloman and co ltd. Converted his business into a company. There were 7 members (wife, daughter, 4 sons, Saloman himself) each person had one share. But Saloman had 20K shares value of which was 1 UK pounds. Purchase consideration : company is to pay Saloman 30K pounds. 9 in cash + 20 in shares + 10 secured debentures. Strike of boot business and he had to wind up company. Sequence of payments. Mortgage, secured and unsecured debts. Paid mortgage debt and interest and was left with 1055 uk pounds. Liabilities left - 17773 uk pounds. 10 k secured debentures remaining unsecured debentures. Liquidator contention: Saloman should indemnify the company against whole or unsecured debt as Saloman and company same person. Saloman and company are seperate acc to house of lords. Saloman being secured creditor got priority to unsecured creditors.

Points for this video: Generally speaking, a company is an association of persons United for a common object such as carrying business for profit, promote art, science, education, charitable purposes. As per 2(20) of companies act 1956 company means a company incorporated under this act or any previous law. Voluntary association of persons formed for purpose of doing business having a distinct name (no same name) limited liability (liability is limited to specific amount. It is limited upto certain extent only) having seperate legal entity (company is a different legal entity from owner. Can be sued seperately. Company is an artificial person in the eyes of law) capable of rights and duties of its own. Endowed with the potential of potential succession (continuation of corporation's or other organisations existence despite death of owner. Can be run by family member too. For eg partnership, 2 partners, one partner dead, partnership continues (contrast)) VFHLHCE

Ma’am by mistake I have written wrong que number in my practical exam so can u please tell me that if they will be checked or not as I have also made the table of questions in my answer sheet which clearly defines that which que I have attempted

thanks ma'am ❤ full concept in less time❤

Hello karan