Fundamentals of

Company Law
Prof. V. Shyam Kishore
VIT School of Law, VIT University, Chennai
What is a Company?
A voluntary association of persons formed for
the purpose of doing business.

S. 2(20) CA, 2013: Company means a

company incorporated under this Act or
under any previous company law.

Prof. V. Shyam Kishore VIT School of Law

Nature of Corporate Form
Independent corporate existence. (Salomon v.
Salomon & Co. Ltd.)
Limited liability.
Perpetual succession.
Separate property.
Transferable shares.
Capacity to sue and be sued.

Prof. V. Shyam Kishore VIT School of Law

Lifting of the Corporate Veil
Thus a company has been provided with a
veil to shield the individuals behind
the company.

However under certain circumstances, if

the veil is used for a wrongful
purpose, this veil can be lifted.

Prof. V. Shyam Kishore VIT School of Law

 Circumstances for lifting the
Corporate Veil include:
Reduction in membership.
Misdescription of company name.
Fraudulent conduct of business.
Determination of eey character.
Benefit of revenue.
Govt. companies.

Prof. V. Shyam Kishore VIT School of Law

 Types of Companies:
Limited company (by share or by guarantee)
Unlimited company.
Government company.
Foreign company.
Private company.
Public company.
One person company.

Prof. V. Shyam Kishore VIT School of Law

Key Players: Promoters:
No clear definition.
A person who undertakes to form a company, sets
it going and who takes the necessary steps to accomplish
that purpose.
Does not include people acting in professional capacity
though!
Generally secure management of the company once it is
incorporated.
Fiduciary position. Cannot make profits at the expense
of
the company.

Prof. V. Shyam Kishore VIT School of Law

Key Players:
Members & shareholders
Board of Directors.
Directors.
Managing Director / CEO.
Manager.
Chairman.
Whole-time director (WTD)/ Executive- director.
Non-executive director.
Independent director.
Nominee director.

Prof. V. Shyam Kishore VIT School of Law

 Key Players: Key Managerial
Persons (KMP):
S. 2(51) CA 2013: KMP in relation to a
company means:
CEO, MD or the manager;
Company secretary;
WTD;
CFO; and such other officer that may be
prescribed.

Prof. V. Shyam Kishore VIT School of Law