Introduction

Company is the most common form of Entity for

carrying on business.
Two main types of associations recognized for
carrying on of business is
Partnership and
The Company
The concept of separate legal personality is the
important feature which distinguishes the
company from partnership
 Separate legal personality

A company has a dual nature as both an

association of its members and a person
separate from its members.
A company’s property is owned by the company
as a separate person ,not by the members
A member may come and go but a company
remains the same .
Salomon v. Salomon & co Ltd[1897]AC22
Lord Macnaughten ”……..The company is at law a
different person altogether from the subscribers to the
memorandum and though it may be that after
incorporation the business is precisely the same as it
was before and the same persons are managers and
the same hands receive the profits ,the company is not
in law the agent of the subscribers or trustees for them
.Nor are the subscribers and members liable in any
shape or form except to the extent and in the manner
provided by the Act .That is I think declared the intention
of the enactment.”
Consequences of separate legal Personality

Limited Liability
Company can Acquire ,own and Dispose
of property.
It can sue and be sued
Perpetual succession
Transferability of shares
Management under a board structure
Though the term company has no precise
legal definition ,it is generally used to
denote a commercial association
incorporated under a general statute .
General statute in India is The Companies
Act,1956
A corporation may be formed for any law
ful purposes
Most of them are formed for commercial
purpose .We are concerned with
commercial corporations
 Division of Commercial
Corporations
Jurisprudentially of three categories
(a) Chartered
(b) statutory
(c) Registered
In category ( C ) the birth traceable to a
certificate issued by an officer of the state,
empowered by a statute to do so
Refer S.34 of the Companies Act,1956 .
Most of the commercial corporations are
registered companies
1)Pooling of resources
2) Entrustment of management to a small
group
3)Transferability of investment with
comparative ease
4)Limiting the risk of investors
5) Perpetual succession
Distinction Between company and
partnership
Partnership comes into existence , only
when the partners begin to carry on
business in accordance with their
agreement.
Where as a registered company comes
into existence as soon as it is registered ,
regardless of whether it transacts any
business.
Distinction Between company and
partnership
A member of the partner ship is liable for
all the debts and obligations of the firm
incurred during member ship, regardless
of any agreement to the contrary between
the partners
Where as a member of the body corporate
is not liable for the debts of the corporation
unless liability is imposed on the members
by the constitution or by the statute.
Distinction Between company and
partnership
Every partner in a firm may act for the purpose
of firms business and acts of any one member
of a partnership bind all the partners .
Where as in an incorporated company a board
of Directors may be appointed to act for the
company in matters of business no member of
the company has as a member ,any authority
to bind the company.
Registered company evolved from
partnership
Evolution of the deed of settlement
company
Which provided for most of the essential
features of the registered company
 Statutes -England
a) Joint stock companies Act 1844(U.K)
Three cardinal principles
(1)Incorporated by registration
(2) Compulsory registration of association with
more than 25 members
(3)Publicity Requirement
Winding up governed by separate statute
Major defect
Absence of limited liability
 Statutes -England
b) Limited Liability Act1855
Cautious approach
Minimum capital
Statutory auditing and accounting required to be
approved by the treasury
C) Joint stock Companies Act1856
The cautious approach of Limited Liability Act 1855
abandoned .The only requirement for the limited liability
was the addition of the word limited as the last
component of the company’s name
 INDIA
Joint Stock Companies Act,1850
The first statute provided for the incorporation of
the registered company
Prior to this act there existed incorporated
bodies in India to carry on commercial activities
.But they were incorporated through The royal
charter or through the Letters patent or by
Special Acts of Governer General in council
Joint stock companies
Act,1857,1866,1882,1913,1956
Main difference between Joint Stock companies Act 1844(uk) and
J.S. India is with respect to the authority empowered to register the
company .In India under the act of 1850,the registration was done
by the supreme court of Madras, Calcutta, and Bombay.
Act of 1913-The concept of private company was introduced
Amendment Act of 1936- To incorporate the changes introduced in
England by the companies Act,1929.The outstanding contribution
was the recognition of group companies through holding subsidiary
relation ship. Section 2(2)
Holding company to annex to its balance sheet, the balance sheet
and profit and loss account of the subsidiary companies
Also recognized the issue of redeemable preference shares
(S.105-B)
Other important change effected by the Amendment Act,1936
1) Power conferred on the General Meeting to Remove a rotational
director before the expiry of his term
2) Certain power could be exercised by the board of directors only
with the consent of general meeting (eg. See. S.86H- sale of any
undertaking of the company )
3) Statutory provision providing for the vacation of the office of a
director in certain contingencies (s 86 -1)
4) Statutory regulation of the office of managing agents (s.87A to
87-1)
5)Minimum subscription clause to meet certain financial
requirements can not be arbitrarily fixed
The Companies Act,1956
Based on English Companies Act,1948
But many amendments introducing drastic changes
Major amendment Acts Acts of
1957,1960,1963,1965,1966,1969,1974,
1977,1985,1988,1996,2000,2002.
The Companies Act,1956
Many provisions to safe guard investors and public
1)Appointment of Directors and removal of directors
2)Disqualification provisions strengthened
3)Relief against oppression and mismanagement
4)Regulatory role strengthened
5)Publicity Requirements
6)Public interest recognized as a legitimate corporate
policy –see Ss397,398,408 ,433(f),433(h),293B
Effects of amendments Acts
Amendment Act ,1960 –introduction of the concept of
deemed public company –additiona criteria introduced
by subsequent amendment acts
1963-Estabilishment of company law tribunal to facilitate
speedy action against persons involved in malpractices
and irregularities in the management of the
company.Tribunal abolished in 1967
Also the establishment of the company law
board as an administrative body under the
control of the department
Act of 1974- Ceratin quasi judicial power
conferred on the company law board
Amendment Act,1977-Regulation of Company
deposits
Amendment Act 1985- workers dues a
statutory mortgage over the properties of the
company in winding up and also an overall
preferential claim S.529(3)& 529A
Amendment Act 1988
1) CLB a quasi judicial organ free from control
of central govt.
2)New definition of officer in default-mens rea
requirement diluted
3)Dispensing with govt. approval for managerial
appointments and remuneration in certain cases
Depositories Act and Depositories Related Laws
(Amendment)Act,1996&1997.
Amendment of Ss 2,41,49,51,83,111,111A115.150,152,
Sch. 2
Shares of public companies made freely transferable
Amendment Act,2000
(See s.43A,inserted by the amendment act
1960)abolished
Minimum paid up capital prescribed for private and
public companies
SEBI made administrative authority in the case of a
listed companies in so far as they related to matters
relating to issue and transfer of securities and non
payment of dividend (Sections specified)
Directors responsibility statement to be included
in the boards report
Setting up of Audit committee mandatory for
public companies with apaid up capital of
Rs.5crore or more
Disqualification for directors failing to file annual
accounts and returns (for three years etc
.(s.274(1)(g)
Appointment of nominee directors by small
share holders .
Amendment Act 2002
Producer companies introduced
Second Amendment Act 2002
Setting up of National Company Law
Board Tribunal to replace company law
board
Part VI A inserted which is a substitute for
SICA provisions
FORMATION OF A COMPANY
 Types of Companies
Based on the mode of formation
– Statutory
Private Act of Parliament
– Chartered (erstwhile)
By the Crown’s prerogative
– Registered
Registration under the Companies Act
Creation of a Registered Company
Step 1
Choice of type
Limited or Unlimited
If limited, by shares or guarantee
if unlimited with or without share
capital
public or private
5 choices are available
– Public company limited by shares
– Private company limited by shares
– Private company limited by guarantee
&without share capital
– Private unlimited company with a share
capital
– Private unlimited company not having a a
share capital
 Constitutional Documents
Memorandum Of Association
Name Clause
Registered Office Clause
Object Clause
Liability Clause
Capital Clause
Association Clause
Name Clause
 II-Name of the Company
Company-Artificial Person- identity
Name to be stated in MoA, Company’s
Seal, Business Letters, Negotiable
Instruments, Business Letters,& outside
places of business & Offices
Application To Registrar checking
Availability-Form 1A
Desirable to Central Government
– Identical with
– Too nearly resembling
Name is part of the business reputation,
which will be injured if a new company
adopts it
Society of Motor Manufacturers and Traders v Motor
Manufacturers and Traders Mutual Insurance co.Ltd
[1925]1 Ch 625
Plaintiff- incorporated in 1902-Defendents-registering-
more or less similar name-action to restrain use of name
Qn-Whether name undesirable being similar?
Resemblance between the two names must be
calculated to deceive. It is calculated to deceive when it
suggests that the corporation adopting it is in some way
or other associated with the existing corporation
Held-not undesirable as not calculated to deceive as
anyone who took time could understand that the two
companies deal in different areas.
Remedy for Use of Same Name

If a registered Trade Mark-Can Sue for

Infringement
Tort Of “Passing Off”
Injunction
Remedy under section 22(1)
 III-Subscription & Membership
SECTION 12
Mode of forming incorporated company.- (1) Any seven or more
persons, or where the company to be formed will be a private
company, any two or more persons, associated for any lawful
purpose may, by subscribing their names to a memorandum of
association and otherwise complying with the requirements of this
Act in respect of registration, form an incorporated company, with or
without limited liability.
(2) Such a company may be either -
(a) a company having the liability of its members limited by the
memorandum to the amount, if any, unpaid on the shares
respectively held by them (in this Act termed "a company limited by
shares");
(b) a company having the liability of its members limited
by the memorandum to such amount as the members
may respectively undertake by the memorandum to
contribute to the assets of the company in the event of
its being wound up (in this Act termed "a company
limited by guarantee"); or

(c) a company not having any limit on the liability of its

members in this Act termed "an unlimited company").
IV-Lodgment of Documents with
Registrar
Memorandum
Articles of Association
Agreement with proposed Managerial
Personnel,( if any)
Certificate of Compliance of Requirements-by
whom?- Ref Sec 33(2)
Registration Fee -ref sch 10
Stamp Duty on the constitutional documents-
Ref Indian Stamp Act- Rel Articles
 SECTION 33
– Registration of memorandum and articles.- (1) There
shall be presented for registration, to the Registrar of the
State in which the registered office of the company is
stated by the memorandum to be situate -

(a) the memorandum of the company;

(b) its articles, if any; and

[1] [(c) the agreement, if any, which the company

proposes to enter into with any individual for appointment
as its managing or whole-time director or manager.]
(1) of section 2 of the Chartered Accountants Act, 1949 (38 of 2) A
declaration by an advocate of the Supreme Court or of a High Court,
an attorney or a pleader entitled to appear before a High Court, or
[2] a Secretary or a chartered accountant in whole-time practice in
India] who is engaged in the formation of a company, or by a person
named in the articles as a director [3] [***] manager or secretary of
the company, that all the requirements of this Act and the rules
thereunder have been complied with in respect of registration and
matters precedent and incidental thereto, shall be filed with the
Registrar; and the Registrar may accept such a declaration as
sufficient evidence of such compliance.
[4] Explanation.-For the purposes of this sub-section, "chartered
accountant in whole-time practice in India" means a chartered
accountant within the meaning of clause (b) of sub-section 1949)
who is practicing in India and who is not in full-time employment.]
3) If the Registrar is satisfied that all the
requirements aforesaid have been
complied with by the company and that it
is authorised to be registered under this
Act, he shall retain and register the
memorandum, the articles, if any, and the
agreement referred to in clause (c) of sub-
section (1), if any.
 Satisfaction of Registrar
Nature of Registrar’s Power?
“authorised to be registered under this
Act”?
Not only checking Compliance of Section
33
Lawful object

Stamp duty & Fees

Effect of Registration- SECTION 34
Effect of registration.- (1) On the registration of the memorandum
of a company, the Registrar shall certify under his hand that the
company is incorporated and, in the case of a limited company that
the company is limited.
(2) From the date of incorporation mentioned in the certificate of
incorporation, such of the subscribers of the memorandum and other
persons, as may from time to time be members of the company,
shall be a body corporate by the name contained in the
memorandum, capable forthwith of exercising all the functions of an
incorporated company, and having perpetual succession and a
common seal, but with such liability on the part of the members to
contribute to the assets of the company in the event of its being
wound up as is mentioned in this Act.
Conclusiveness of incorporation
certificate - SECTION 35
Conclusiveness of certificate of
incorporation.- A certificate of incorporation
given by the Registrar in respect of any
association shall be conclusive evidence that all
the requirements of this Act have been complied
with in respect of registration and matters
precedent and incidental thereto, and that the
association is a company authorised to be
registered and duly registered under this
On the registration of the memorandum of a
company ,the registrar of the company is to
certify that the company is incorporated and
requires the registrar to give notice of the issue
of a certificate of incorporation in the gazette.
certificate of incorporation is conclusive
evidence that the requirements of the act in
respect of registration and of matters precedent
and incidental to it have been complied with.
.Thus the company is born and comes into
being complete with its own birth certificate.
 SECTION 13
Requirements with respect to memorandum.- (1) The memorandum of every
company shall state -
(a) the name of the company with "Limited" as the last word of the name in the case
of a public limited company, and with "Private Limited" as the last word of the name in
the case of a private limited company;
(b) the State in which the registered office of the company is to be situate; [1] [***] [2]
(c) in the case of a company in existence immediately before the commencement of
the Companies (Amendment) Act, 1965, the objects of the company;

d) in the case of a company formed after such commencement, -

(i) the main objects of the company to be pursued by the company on its
incorporation and objects incidental or ancillary to the attainment of the main objects;
(ii) other objects of the company not included in sub-clause (i); and
(e) in the case of companies (other than trading corporations), with objects not
confined to one State, the States to whose territories the objects extend
2) The memorandum of a company limited by shares or by
guarantee shall also state that the liability of its members is limited.
(3) The memorandum of a company limited by guarantee shall also
state that each member undertakes to contribute to the assets of the
company in the event of its being wound up while he is a member or
within one year after he ceases to be a member, for payment of the
debts and liabilities of the company, or of such debts and liabilities of
the company as may have been contracted before he ceases to be
a member, as the case may be, and of the costs, charges and
expenses of winding up, and for adjustment of the rights of the
contributories among themselves, such amount as may be required,
not exceeding a specified amount.
4) In the case of a company having a share capital -
(a) unless the company is an unlimited company, the
memorandum shall also state the amount of share
capital with which the company is to be registered and
the division thereof into shares of a fixed amount;
(b) no subscriber of the memorandum shall take less
than one share; and
(c) each subscriber of the memorandum shall write
opposite to his name the number of shares he takes.
 SECTION 14
Form of memorandum.- The memorandum of
association of a company shall be in such one of
the Forms in Tables B, C, D and E in Schedule I
as may applicable to the case of the company,
or in a Form as near thereto as circumstances
admit
Table B
Table C
Table D
Table E
 SECTION 22
22 . Rectification of name of company.- [1] [(1) If, through
inadvertence or otherwise, a company on its first registration or on
its registration by a new name, is registered by a name which, -(i) in
the opinion of the Central Government, is identical with, or too nearly
resembles, the name by which a company in existence has been
previously registered, whether under this Act or any previous
companies law, the first-mentioned company, or
(ii) on an application by a registered proprietor of a trade mark, is in
the opinion of the Central Government identical with, or too nearly
resembles, a registered trade mark of such proprietor under the
Trade Marks Act, 1999, such company,]
(a) may, by ordinary resolution and with the previous approval of the
Central Government signified in writing, change its name or new
name; and
b) shall, if the Central Government so directs within twelve months of its first
registration or registration by its new name, as the case may be, or within
twelve months of the commencement of this Act, whichever is later, by
ordinary resolution and with the previous approval of the Central
Government signified in writing change its name or new name, within a
period of three months from the date of the direction or such longer period
as the Central Government may think fit to allow.
[2] Provided that no application under clause (ii) made by a registered
proprietor of a trade mark after five years of coming to notice of registration
of the company shall be considered by the Central Government.]
(2) If a company makes default in complying with any direction given under
clause (b) of sub-section (1), the company, and every officer who is in
default, shall be punishable with fine which may extend to [3] [one thousand
rupees] for every day during which the default continues.
 Unlawful Activity
R v Registrar of Companies [1980] QBD
73
Facts: “Prostitutes Ltd”-unlawful activity
Undesirable as it is unlawful
Emblems and Names(Prevention of
Improper Use) Act,1950
It prohibits certain names emblems and
seals from being used
Schedule of the Act
Eg. United Nations, WHO, Bharat,
Rashtrapati, National Flag, Name of a
state, Name calculated to suggest the
patronage of a government, Ashoka
Chakra, Dharma Chakra.
 Use of the Word “Limited”
13(1) The memorandum of every company shall state -
(a) the name of the company with "Limited" as the last
word of the name in the case of a public limited
company, and with "Private Limited" as the last word of
the name in the case of a private limited company;

To ensure that all persons dealing with the company has

clear notice as to the liability of members

Exception under Section

25(1)
:25 . Power to dispense with "Limited" in name of charitable or
other company.- (1) Where it is proved to the satisfaction of the
Central Government that an association -
(a) is about to be formed as a limited company for promoting
commerce, art, science, religion, charity or any other useful object,
and
(b) intends to apply its profits, if any, or other income in promoting its
objects, and to prohibit the payment of any dividend to its members,
the Central Government may by licence, direct that the association
may be registered as a company with limited liability, without the
addition to its name of the word "Limited" or the words "Private
Limited".
 Registered Office Clause

13(1)(b) the State in which the registered

office of the company is to be situate;
Name of State and not place
But within 30 days of commencement of
business the place of registered office
must be decided and notified to the
registrar who shall record the same-
section 146
 Objects Clause
13(1)(c) in the case of a company in existence immediately before
the commencement of the Companies (Amendment) Act, 1965, the
objects of the company;

d) in the case of a company formed after such commencement, -

(i) the main objects of the company to be pursued by the company
on its incorporation and objects incidental or ancillary to the
attainment of the main objects;
(ii) other objects of the company not included in sub-clause (i); and
(e) in the case of companies (other than trading corporations), with
objects not confined to one State, the States to whose territories the
objects extend
Main Objects
incidental or ancillary to main objects
Other Objects
State to which it extends
Choice of objects –freedom of promoters
But no unlawful object permitted: Bowman
v Secular Society- Gambling- Unlawful
 Why Objects?
Protection of Share holders
Creditor Protection
Commencement of business relating to
other objects- section 149 2A
 Liability Clause
Nature of liability of member
Number and value of Shares into which it is divided
Subject to a minimum
2) The memorandum of a company limited by shares or by
guarantee shall also state that the liability of its members is limited.
(3) The memorandum of a company limited by guarantee shall also
state that each member undertakes to contribute to the assets of the
company in the event of its being wound up while he is a member or
within one year after he ceases to be a member, for payment of the
debts and liabilities of the company, or of such debts and liabilities of
the company as may have been contracted before he ceases to be
a member, as the case may be, and of the costs, charges and
expenses of winding up, and for adjustment of the rights of the
contributories among themselves, such amount as may be required,
not exceeding a specified amount.
 Capital Clause
Nominal Capital
Number and value of Shares into which it is divided
Subject to a minimum
13(4) In the case of a company having a share capital -
(a) unless the company is an unlimited company, the memorandum
shall also state the amount of share capital with which the company
is to be registered and the division thereof into shares of a fixed
amount;
(b) no subscriber of the memorandum shall take less than one
share; and
(c) each subscriber of the memorandum shall write opposite to his
name the number of shares he takes.
 Association Clause
“We the several persons whose names
and addresses are subscribed, are
desirous of being formed into a company
in pursuance of this MoA, and we
respectively agree to take the number of
shares in the capital of the company set
opposite our respective names”
 Form of memorandum
SECTION 14 -The memorandum of
association of a company shall be in such
one of the Forms in Tables B, C, D and E
in Schedule I as may applicable to the
case of the company, or in a Form as near
thereto as circumstances admit
 SECTION 15

Printing and signature of memorandum.- The

memorandum shall -
(a) be printed,
(b) be divided into paragraphs numbered consecutively,
and
(c) be signed by each subscriber (who shall add his
address, description and occupation, if any,) in the
presence of at least one witness who shall attest the
signature and shall likewise add his address, description
and occupation, if any.
COMMENCEMENT OF BUS
DISTINCTIN BETWEEN PRIVATE AND
PUBLIC COMPANT-PVT CAN
COMMENCE BUSINESS IMMEDIATELY
AFTER INCORPORATION-Public
company has to obtain another certificate
popularly known as trading certificate-Ref
Sec 149
 Commencement Of Business-
Section 149
Restrictions on commencement of business.- (1) Where a company having a share capital has
issued a prospectus inviting the public to subscribe for its shares, the company shall not
commence any business or exercise any borrowing powers, unless -
(a) shares held subject to the payment of the whole amount thereof in cash have been allotted to
an amount not less in the whole than the minimum subscription;
(b) every director of the company has paid to the company, on each of the shares taken or
contracted to be taken by him and for which he is liable to pay in cash, a proportion equal to the
proportion payable on application and allotment on the shares offered for public subscription;
(c) no money is, or may become, liable to be repaid to applicants for any shares or debentures
which have been offered for public subscription by reason of any failure to apply for, or to obtain,
permission for the shares or debentures to be dealt in on any recognized stock exchange; and
(d) there has been filed with the Registrar a duty verified declaration by [1] one of the directors or
the secretary or, where the company has not appointed a secretary, a secretary in whole-time
practice in the prescribed form, that clauses-(a), (b) and (c) of this sub-section, have been
complied with.
(4) Any contract made by a company before the date at
which it is entitled to commence business shall be
provisional only, and shall not be binding on the
company until that date, and on that date it shall become
binding.
(6) If any company commences business or exercises
borrowing powers in contravention of this section, every
person who is responsible for the contravention shall,
without prejudice to any other liability, be punishable with
fine which may extend to [4] five thousand rupees for
every day during which the contravention continues.
 Commencement of Business Stated as
other Objects in Memorandum
Sec 149 2A
(2A) Without prejudice to the provisions of sub-
sub-section (1) and sub-
sub-section (2) a company having a share capital,
whether or not it has issued a prospectus inviting the public to subscribe for its shares, shall not at any time
commence any business-
business-
(a) if such company is a company in existence immediately before the commencement of the Companies
(Amendment) Act, 1965 (31 of 1965), in relation to any of the objects
objects staled in its memorandum in pursuance of
clause (c) of sub-
sub-section (1) of section 13;
(b) if such company, is a company formed after such commencement in relation to any of the
objects stated in its memorandum in pursuance of sub-clause (ii) of clause (d) of sub-section (1) of
the said section, unless -
(i) the company has approved of the commencement of any such business by a special resolution
passed in that behalf by its general meeting; and
(ii) there has been filed with the Registrar a duty verified declaration by [one of the directors or the
secretary or where the company has not appointed a secretary, a secretary in whole time practice
in the prescribed form, that clause (i) or as the case may be, sub-section (2B) has been complied
with;
and if the company commences any such business in contravention of this sub- sub-section, every person who is
responsible for the contravention shall, without prejudice to any
any other liability, be punishable with fine which may
extend to [3] five thousand rupees for every day during which the contravention
contravention continues. Explanation.-
Explanation.-A
company shall be deemed to commence any business within the meaning meaning of clause (a) if and only if it commences
any new business which is not germane to the business which it is is carrying on at the commencement of the
Companies (Amendment) Act, 1965 (31 of 1965) in relation to any of the objects referred to in the said clause.
 Alteration of Memorandum
Earlier Companies Acts permitted no alteration
Later Name and Authorised Capital was permitted to be
altered
Range of alterations now permitted
16 . Alteration of memorandum.- (1) A company shall
not alter the conditions contained in its memorandum
except in the cases, in the mode, and to the extent for
which express provision is made in this Act.
(2) Only those provisions which are required by section
13 or by any other specific provision contained in this Act
to be stated in the memorandum of the company
concerned shall be deemed to be conditions contained in
its memorandum
 Alteration of Name Clause
Special Resolution
Approval of Central Government in writing
21 . Change of name by company.- A company may,
by special resolution and with the approval of the Central
Government signified in writing change its name:
[1] Provided that no such approval shall be required
where the only change in the name of a company is the
addition thereto or, as the case may be, the deletion
therefrom, of the word "Private", consequent on the
conversion in accordance with the provisions of this Act
of a public company into a private company or of a
private company into a public company.]
Name to be effective only when a fresh certificate of incorporation is issued
under section 23
23 . Registration of change of name and effect thereof.- (1) Where a
company changes its name in pursuance of section 21 or 22, the Registrar
shall enter the new name on the register in the place of the former name,
and shall issue a fresh certificate of incorporation with the necessary
alterations embodied therein; and the change of name shall be complete
and effective only on the issue of such a certificate.
(2) The Registrar shall also make the necessary alteration in the
memorandum of association of the company.
(3) The change of name shall not affect any rights or obligations of the
company, or render defective any legal proceedings by or against it; and
any legal proceedings which might have been continued or commenced by
or against the company by its former name may be continued by or against
the company by its new name.
Malhati Tea Syndicate v Revenue Officer AIR
1973 Cal 78
Malhati Tea Syndicate- Malhati Tea & Industries
Limited-Writ in Former Name-Petition declared
incompetent-
Can it file a new petition in its old name?
“Nothing in 23(3) authorised the company to
commence a legal proceeding in its former
name at the time when it had acquired a new
name which has been entered in the register”
 Alteration Of Registered Office
Clause
4 situations
– Within the same city
Decision of the Board-notice to registrar-within 30 days-
section 146
– Within the same state
Special resolution- notice to registrar-within 30 days-section
146(2)
– Within the same state but under a different registrar
Section 17A - Special resolution- Confirmation of Regional
Director-
– Beyond the State
Requires Alteration-Section 17(1)-special resolution-
Confirmation of Central Government-17(2)
 SECTION 17
Special resolution and confirmation by Central Government required
for alteration of memorandum.--(1) A company may, by special
resolution, alter the provisions of its memorandum so as to change the
place of its registered office from one State to another, or with respect to the
objects of the company so far as may be required to enable it--
(a) to carry on its business more economically or more efficiently; or
(b) to attain its main purpose by new or improved means; or
(c) to enlarge or change the local area of its operations; or
(d) to carry on some business which under existing circumstances may
conveniently or advantageously be combined with the business of the
company; or
(e) to restrict or abandon any of the objects specified in the memorandum;
or
(f) to sell or dispose of the whole or any part of the undertaking, or of any of
the undertakings, of the company; or
(g) to amalgamate with any other company or body of persons.
2) The alteration of the provisions of memorandum relating to the change of
the place of its registered office from one State to another shall not take
effect unless it is confirmed by the Central Government on petition.
(3) Before confirming the alteration, the Central Government must
be satisfied--
(a) that sufficient notice has been given to every holder of the
debentures of the company, and to every other person or class of
persons whose interests will, in the opinion of the Central
Government, be affected by the alteration; and
(b) that, with respect to every creditor who, in the opinion of the Central
Government, is entitled to object to the alteration, and who signifies his
objection in the manner directed by the Central Government, either his
consent to the alteration has been obtained or his debt or claim has been
discharged or has been determined, or has been secured:
Provided that the Central Government may, in the case of any person or
class of persons, for special reasons, dispense with the notice required by
clause
4) The Central Government shall cause notice of
the petition for confirmation of the alteration to
be served on the Registrar who shall also be
given a reasonable opportunity of appearing
before the Central Government and state his
objections and suggestions, if any, with respect
to the confirmation of the alteration.
(5) The Central Government may make an order
confirming the alteration on such terms and
conditions, if any, as it thinks fit, and may make
such order as to costs as it thinks proper.
“Class of Persons interested”?
Can the state sue as an interested
person?
Orient Paper Mills v State of OrissaAIR
1957 Ori 232
Re, Orissa Chemicals & DistilleriesAIR
1961 Ori 162
Re, Mackinnon Mackenzie & Co [1961] 1
Comp .LJ 200
Alteration Of Objects Clause
Fenced by safeguards which are
calculated to protect the interests of
creditors and shareholders
Substantive safeguards in Section 17
7 heads permitted
to carry on its business more economically
or more efficiently
– Business is the same-ways of conducting it
can be changed-
– Re Scientific Poultry Breeders Association
1933 Ch 227

– Straw Products Ltd v ROC 1970 Comp LJ 93

2 to attain its main purpose by new or
improved means
3 to enlarge or change the local area of its
operations - Re Indian Gold Mining & Extracting
Company 1891 3 Ch 538
4 to carry on some business which under
existing circumstances may conveniently or
advantageously be combined with the business
of the company
– - Re Patent Tyre Co.,1923 2 Ch 222
– Re Cyclists Touring Club 1907 1 Ch 269
5 to restrict or abandon any of the objects
specified in the memorandum; or
6 to sell or dispose of the whole or any
part of the undertaking, or of any of the
undertakings, of the company; or
7 to amalgamate with any other
company or body of persons
 Procedure

Copy of Special Resolution to the

Registrar
– Conclusive evidence as to the compliance of
requirements
– Effect of Failure to register- section 19
(1) No such alteration as is referred to in section 17
shall have any effect until it has been duly
registered in accordance with the provisions of
section 18.
 Articles of Association
Companies which require AoA for
registration
– Unlimited Companies
– Companies Limited by Guarantee
– Private Companies Limited by Shares
– Optional for public company limited by shares
– See SEC 26
 SECTION 26
Articles prescribing regulations.- There may
in the case of a public company limited by
shares, and there shall in the case of an
unlimited company or a company limited by
guarantee or a private company limited by
shares, be registered with the memorandum,
articles of association signed by the subscribers
of the memorandum, prescribing regulations for
the company.
Schedule 1 Contains various Model
articles and memoranda
A company may either adopt them or draft
one for itself
Co Limited by shares- Table A –See sec
28
 SECTION 28
Adoption and application of Table A in the case of companies
limited by shares.- (1) The articles of association of a company
limited by shares may adopt all or any of the regulations contained
in Table A in Schedule I.
(2) In the case of any such company which is registered after the
commencement of this Act, if articles are not registered, or if articles
are registered, insofar as the articles do not exclude or modify the
regulations contained in Table A aforesaid, those regulations shall,
so far as applicable, be the regulations of the company in the same
manner and to the same extent as if they were contained in duly
registered articles.
 SECTION 29
Form of articles in the case of other companies.- The
articles of association of any company, not being a
company limited by shares, shall be in such one of the
Forms in Tables C, D and E in Schedule I as may be
applicable, or in a Form as near thereto as
circumstances admit:

[1] Provided that nothing in this section shall be deemed

to prevent a company from including any additional
matters in its articles in so far as they are not
inconsistent with the provisions contained in the Form in
any of the Tables C, D and E, adopted by the company
 Certain Other Requirements
Unlimited Co.
– Number of members & if it has a share
capital, the amount
Company Limited by Guarantee.
– Number of members
Private Co. having a Share Capital.
Requirements in 3 (1)(iii)(a)(b)(c)
– Restriction on transfer
– Limiting the membership to 50
– Prohibiting invitation from public to subscribe
 SECTION 27
Regulations required in case of unlimited company, company
limited by guarantee or private company limited by shares.- (1)
In the case of an unlimited company, the articles shall state the
number of members with which the company is to be registered and,
if the company has a share capital the amount of share capital with
which the company is to be registered.
(2) In the case of a company limited by guarantee, the articles shall
state the number of members with which the company is to be
registered.
(3) In the case of a private company having a share capital, the
articles shall contain provisions relating to the matters specified in
sub-clauses (a), (b) and (c) of clause (iii) of sub-section (1) of
section 3; and in the case of any other private company, the articles
shall contain provisions relating to the matters specified in the said
sub-clauses (b) and (c).
 Form & Signature of Articles
Section 30 Form and signature of articles.- Articles
shall -
(a) be printed;
(b) be divided into paragraphs numbered consecutively;
and
(c) be signed by each subscriber of the memorandum of
association (who shall add his address, description and
occupation, if any,) in the presence of at least one
witness who shall attest the signature and shall likewise
add his address, description and occupation, if any.
Contents- as the subscribers deem expedient-freedom subject to
section 9
Act to override memorandum, articles, etc. —Save as otherwise
expressly provided in the Act —

(a) the provisions of this Act shall have effect notwithstanding

anything to the contrary contained in the memorandum or articles of
a company, or in any agreement executed by it, or in any resolution
passed by the company in general meeting or by its Board of
directors, whether the same be registered, executed or passed, as
the case may be, before or after the commencement of this Act; and

(b) any provision contained in the memorandum, articles,

agreement or resolution aforesaid shall, to the extent to which it is
repugnant to the provisions of this Act, become or be void, as the
case may be.
 Co relation between MoA & AoA

Articles subordinate to Memorandum

– In case of inconsistency memorandum will
prevail
Ambiguity
AoA Can be used to explain MoA and vice
versa in case of ambiguity
Doctrine of constructive notice
Doctrine of Ultra vires