CLCC 3001 Company Law I L T P C

Version 1.0 4 0 0 4
Pre-requisites/Exposure Fundamentals of Law of Contract and Economics
Co-requisites SEBI Regulations

Course Objectives
1. To facilitate the students to acquire knowledge of various aspects of Company Law-
economic, formation, incorporation and floatation of a company, followed by
commencement, administration and conduct of business;
2. To appreciate the issues, challenges and regulation of companies with the development of
students' skills in legal reasoning, analysis and presentation through thorough research and
by relying on study of statutes, case law and regulatory practice relating to Company Law;
3. To prepare the students with strong conceptual and comparative analytical skills;
4. To enable the students to apply the knowledge in legal practice.

Course Outcomes
On completion of this course, the students will be able to
CO.1 Define the basics of Company law in order to understand the evolution of Indian Company
Law in comparison with English Company Law.
CO.2 Discuss company as a corporate entity in comparison with other forms of corporate and
non-corporate entities.
CO.3 Demonstrate insight of formation and incorporation of a company, including the
foundational understanding of the general role of promoters.
CO.4 Analyze functional knowledge of floatation of a company with the help of Prospectus.
CO.5 Evaluate foundational and functional understanding of shares and the incidental provisions
related to it.
CO.6 Develop insights of the practices, issues and challenges in the administration of a Company

Catalog Description
Amongst the various options available within the ambit of Indian law, the most preferred form of
entity to execute any commercial thought is through a company. Consequentially, the study of
Company Law assumes primary importance and is inevitable for any student of law, as it is one of
the compulsory subjects stipulated for all law courses offered in India. Considering the vastness
of the subject, Company Law has been divided into Company Law I and Company Law II. The
present course, i.e., Company Law I is formulated to help the students map the evolution of
company law in India up to the current legal framework, i.e., the Companies Act, 2013 and the
allied rules and regulations, with the help of commentaries, case laws and articles. The study of
Company Law I focuses on various kinds of companies that may be incorporated in India, the
procedure of incorporation, prospectus, floatation, and once finally incorporated its administration
by the Board of Directors and Meetings.
The classroom activities will be designed to encourage students to play an active role in the
construction of their knowledge and in the design of their learning strategies. Class participation
is a fundamental aspect of this course. Thus, the traditional lectures will be combined with other
active teaching methodologies, such as group discussions, cooperative group solving problems and
debates. Interactive approach will be followed during the course of learning where students will
be expected to come prepared for the topics for discussion in the class/ case studies/ presentations/
viva-voce, etc. The main tools of teaching may include Lectures (PPT’s) with Question and
Answer Sessions, Case Law Analysis, Assignments Simulation Exercises, etc.

Course Content
Unit I: Meaning of Corporation 06 lecture hours
Theories of Corporate Personality; creation and Extinction of Corporations.

Unit II: Forms of Corporate and Non-corporate entities 08 lecture hours

Corporations, Partnerships and other Associations of Persons, State Corporations, Government
Companies, Small Scale, Co-operative, Corporate and Joint Sectors

Unit III: Law Relating to Companies - Public and Private -Companies Act, 2013
07 lecture hours
Need of Company for Development, Formation of a Company, Registration and Incorporation;
Memorandum of Association - Various Clauses - Alteration therein -Doctrine of ultra vires,
Articles of Association - Binding Force - Alteration - its relation with Memorandum of Association
- Doctrine of Constructive Notice and Indoor Management - Exceptions.

Unit IV: Prospectus 04 lecture hours

Prospectus- Issue - Contents - Liability for Misstatements - Statement in Lieu of Prospectus,
Promoters - Position - Duties and Liabilities

Unit V: Shares 07 lecture hours

Shares - General Principles of Allotment- Statutory Restrictions - Share Certificate its -Objects
and Effects - Transfer of Shares - Restrictions on Transfer - Procedure for Transfer - Refusal of
Transfer- Role of Public Finance Institutions - Relationship between Transferor and Transferee -
Issue of Shares at Premium and Discount – Depository Receipts - Dematerialized Shares
(DEMAT); Shareholder - who can be and who cannot be a Shareholder - Modes of becoming a
Shareholder - Calls on Shares - Forfeiture and Surrender of Shares - Lien on Shares;
Unit VI: Share Capital 05 lecture hours

Share Capital - Kinds - Alteration and Reduction of Share Capital - Further Issue of Capital-
Conversion of Loans and Debentures into Capital - Duties of Courts to protect the Interests of
Creditors and Share Holders; Dividends-Payment - Capitalization - Profit

Unit VII: Directors 07 lecture hours

Directors - Position - Appointment - Qualifications - Vacation Office - Removal -Resignation –
Powers and Duties of Directors - Meeting, Registers, Loans – Remuneration of Directors - Role
of Nominee Directors - Compensation for Loss of Office – Managing Directors - Compensation
for Loss of Office - Managing Directors and other Managerial Personnel

Unit VIII: Meetings 04 lecture hours

Kinds - Procedure – Voting

SUGGESTED READINGS

TEXTBOOKS:
Sl. Title of the book Author/Editor
No.

1. Company Law and Practice (21st Edition, 2018) G K Kapoor & Sanjay
Dhamija

2. Company Law (17th Edition 2018) Avtar Singh

3. Study Material- Executive (2017) ICSI

REFERENCE BOOKS
Sl. Title of the book Author/Editor
No.

1. Charlesworth’s Company Law (18th Edition, 2011) Stephen Girvin, Sandra

Frisby and Alastair Hudson

2. Company Meetings (4th Edition 2017) K R Chandratre

3. Company Notice Meetings and Resolutions (3rd A M Chakraborti

Edition 2015)
 4. Gower and Davies Principles of Modern Company Paul Davies
Law (10th Edition 2016)

5. Guide to the Companies Act, 2013 (18th Edition, A Ramaiya

2014)

6. Lectures on Company Law and Competition Act K S Anantharaman

(10th Edition 2010)

7. The Company Law (7th Edition, 2016) C R Datta

JOURNALS/BUSINESS MAGAZINES:
 AIR
 Business today
 Business world
 Corporate Law Advisor
 Economic and Political Weekly
 Indian Bar Review
 Journal of the Indian Law Institute
 Lawyers update
 Lex Witness
 Outlook
 Supreme Court Cases
 The Practical Lawyer
 Yale Law Journal

WEB SOURCES:
Database:
 AIR
 Ebscohost
 Economic Outlook
 Jstor
 SCCOnline
 Taxman
 Westlaw

Modes of Evaluation:
Components Internal Mid-term written End term written
Examination Examination Exam
Weightage (%) 30% 20% 50%
Internal Examination:
Components Class Test Project Subject Attendance Total 100 Marks
and Work Grand
Assignment Viva
Weightage 20% 40% 20% 20%
(%) weightage weightage weightage weightage
Test I -10 Report /
Assignment- Viva
10 /PPT

PROGRAM OUTCOMES:
PO 1 Students will demonstrate conceptual knowledge in core areas of law.

PO 2 Students will effectively apply their learnings to practical legal issues.

PO 3 Students will be able to exhibit effective law professional skills, employing oral and
written communication, legal research, analysis, rationalisation and critical-thinking.
PO 4 Students will demonstrate ability to evolve alternative solutions from dynamic socio-
economic and techno-legal perspectives.
PO 5 Students will demonstrate desirable qualities to be employable in the relevant market
PO 6 Students will show sensitivity towards ethical, moral and social issues arising in their
professional career.
PO 7 Students will exhibit commitment, teambuilding, networking, leadership and lifelong
learning skills to excel in legal world.
Programme Specific Outcomes (PSO)
PSO 1 Students will be able to demonstrate conceptual knowledge in core areas of social
sciences.
PSO 2 Students will be able to demonstrate integrated knowledge of legal principles and
social sciences.
PSO 3 Students will be able to exhibit skills in practices and procedures of Energy Law

CO PO1 PO2 PO3 PO4 PO5 PO6 PO7 PSO1 PSO2 PSO3
CO.1 3 3 3 3 2 3 3 3
CO.2 3 3 3 1 3 1 3 2 2
CO.3 3 3 3 2 3 2 3 3 3
 CO.4 3 3 3 3 2 3 3 3
CO.5 3 3 3 3 2 3 2 2
CO.6 3 3 3 1 3 2 3 3 3

1=weakly mapped
2= moderately mapped
3=strongly mapped

Model Question Paper

Name:
Enrolment No:

Course: CLCC 3001- Company Law I

Programme: B.A., LL.B. (Hons.) Energy Law Semester: V
Time: 03 hrs. Max. Marks:100
Instructions:
Attempt all questions from Section A (each carrying 01 mark); any Four Questions from Section B (each carrying
05 marks), any Two Questions from Section C (each carrying 10 marks), Section D is mandatory.
SECTION A (Answer all questions)
1. Answer True/ False:
1. The first directors of a company are appointed by the members.
2. The proxy must be a member of the company.
3. A private company cannot allot shares unless it has issued a prospectus.
CO2,
4. The issued capital is that part of the capital which has been subscribed by the
CO3,
subscribers.
01x10 CO4,
5. The property of the company is the property of its members.
CO5,
Fill in the blanks:
CO6
6. In the case of a ________ company, ________of the total number of directors,
generally, are rotational directors.
7. A director may be removed by the members in a general meeting by passing
______ resolution.
 8. Allotment of shares or debentures must be made after getting minimum
________% subscription against entire public issue.
9. The companies which are formed under special Act are called as__________.

SECTION B (Write short notes on any 04 questions )

2. Registration of a company. [05] CO3
3. Transfer of shares [05]
CO5

4. Extra ordinary General Meeting [05] CO6

5. Sweat Equity shares [05] CO5
6. Doctrine of ultra vires. [05] CO3
SECTION C (Attempt any 02 questions)
5. “A company incorporated under the Companies Act, 2013 does not have the right to [10] CO5
reduce its share capital on selective basis”. Comment
6. “The directors ought not to misuse the trust and belief entrusted in them”. Comment. [10] CO6
7. (a) “Dividends can be declared only in the Annual General Meeting”. Discuss [10] CO5
(b) Can a dividend once declared be revoked? If so, explain the circumstances under
which it can be done.
SECTION D
8. Mohan, who was appointed as an additional director at the Board Meeting held on 15th [12.5] CO6
June, 2014 continues to be in his office on the ground that the Annual General Meeting
for the financial year 2013-2014 was not held as required under the Companies Act,
2013. Whether continuance of Mohan in the office is valid? Will your answer be different
if Mohan was also Managing Director for a period of five years with effect from 1st June,
2014 at the same Board Meeting?
9. The Secretary of a company issues a share certificate in favour of Mr. Cook which [12.5] CO5
apparently complied with the company’s articles as it is purported to be signed by two
directors and the secretary, and it had the company’s seal affixed to it. In fact, the
secretary had forged the signatures of the directors and affixed the seal without authority.
Is the certificate binding on the company?
10. A company issued a prospectus advertising that the company has a great “potential [12.5] CO4
turnover” of a million bags of cement in a year. It is discovered later that while the
company did have the installed capacity of one million bags, it had never produced more
than 6 lakh bags of cement in a year. Buyers of the shares seek remedy against the
misleading statement. Will they succeed?