1.

**Introduction to Company Law, History of Company Law**:

- Company law governs the formation, management, and dissolution of companies. It
regulates the rights and responsibilities of shareholders, directors, and other stakeholders. The
Companies Act, 2013, is the primary legislation governing companies in India.
- Relevant Section: There isn't a specific section that covers the introduction or history of
company law in the Companies Act, 2013, as it is a general provision. However, the entire Act
deals with various aspects of company law.
2. **Characteristics of a Company**:
- Legal Personality: Section 2(20) of the Companies Act, 2013, defines a company as an
entity having a separate legal personality distinct from its members.
- Limited Liability: Section 2(87) provides for limited liability, meaning the liability of
shareholders is limited to the extent of their shareholding.
- Perpetual Succession: Section 2(68) ensures the perpetual succession of a company,
allowing it to continue despite changes in ownership.
- Transferability of Shares: Section 44 specifies the transferability of shares in a company,
subject to the company's articles of association.
3. **Types of Companies**:
- Private Limited Company: Section 2(68) defines a private company, while Section 2(68)
specifies the characteristics of a private company.
- Public Limited Company: Section 2(71) defines a public company, and Section 2(71)
outlines the characteristics of a public company.
- Limited Liability Partnership (LLP): The Limited Liability Partnership Act, 2008, governs
the formation and operation of LLPs.
4. **Procedure for Incorporation of a Company**:
- Sections 7 to 22 of the Companies Act, 2013, detail the procedure for incorporation of a
company. This includes the reservation of name (Section 4), preparation of memorandum and
articles of association (Sections 4 and 5), and filing of incorporation documents (Sections 7 to
22).
5. **Concept of Separate Legal Entity**:
- Section 2(20) of the Companies Act, 2013, defines a company as a legal entity separate
from its members. This means the company can enter into contracts, own property, and sue or
be sued in its own name.
6. **Lifting of Corporate Veil**:
- The doctrine of lifting the corporate veil is not explicitly mentioned in the Companies Act,
2013. However, courts may lift the corporate veil to prevent fraud, improper conduct, or
injustice. This principle is derived from case law and legal precedents.
7. **Memorandum of Association (MOA) and Articles of Association (AOA)**:
- Sections 4 and 5 of the Companies Act, 2013, govern the content and format of the
memorandum of association and articles of association, respectively. The MOA contains
fundamental details about the company, while the AOA contains rules for its internal
management.
8. **Doctrine of Ultra Vires**:
- Section 4 of the Companies Act, 2013, defines the objects clause in the memorandum of
association, limiting the company's activities to those specified objects. Any act beyond the
objects clause is ultra vires the company and void.
9. **Doctrine of Constructive Notice**:
- The doctrine of constructive notice is not explicitly mentioned in the Companies Act, 2013.
However, Section 399 provides for inspection, production, and evidence of documents kept by
the registrar of companies, which can be relevant in this context.
10. **Doctrine of Indoor Management**:
- The doctrine of indoor management is derived from case law and legal precedents. It
provides protection to outsiders dealing with the company, allowing them to assume that
internal company procedures have been followed.
11. **Alteration of MOA and AOA**:
- Sections 13 and 14 of the Companies Act, 2013, detail the procedure for alteration of the
memorandum of association and articles of association, respectively. Any alteration must be
approved by shareholders through a special resolution and filed with the registrar of companies.
Module 2:
1. **Prospectus**:
- A prospectus is a legal document issued by a company to invite subscriptions from the
public for its shares or debentures. It provides information about the company, its operations,
financials, and the securities being offered. The Companies Act, 2013, governs the issuance of
prospectuses, detailing the requirements for their content and distribution.
- Relevant Sections: Sections 26 to 42 of the Companies Act, 2013, outline the provisions
related to prospectuses, including their contents, registration, and circulation.
2. **Powers of SEBI in Case of Listed Companies**:
- The Securities and Exchange Board of India (SEBI) regulates securities markets in India
and has extensive powers to oversee and regulate listed companies. SEBI can issue regulations,
guidelines, and orders to ensure fair and transparent dealings in securities markets, protect
investors' interests, and maintain market integrity.
- Relevant Sections: SEBI's powers are derived from various provisions of the Securities and
Exchange Board of India Act, 1992, and its associated regulations, such as the SEBI (Listing
Obligations and Disclosure Requirements) Regulations, 2015.
3. **Kinds of Share Capital**:
- Share capital refers to the total capital raised by a company through the issuance of shares.
There are different kinds of share capital, including authorized share capital, issued share
capital, subscribed share capital, and paid-up share capital.
- Relevant Sections: Section 61 of the Companies Act, 2013, provides for the different kinds
of share capital and their definitions.
4. **Allotment of Share Capital**:
- Allotment of share capital refers to the process of allocating shares to applicants who have
applied for them during a company's share offering. The Companies Act, 2013, sets out the
procedures and requirements for allotment of shares, including the timeframe for allotment,
filing of return of allotment, and restrictions on allotment.
- Relevant Sections: Sections 39 to 42 of the Companies Act, 2013, deal with the allotment
of shares.
5. **Transfer and Transmission of Shares**:
- Transfer of shares involves the voluntary transfer of ownership from one shareholder to
another, while transmission of shares occurs upon the death or insolvency of a shareholder. The
Companies Act, 2013, governs the transfer and transmission of shares, including the procedure
for registration of transfers and transmission, and the rights and obligations of parties involved.
- Relevant Sections: Sections 56 to 59 of the Companies Act, 2013, cover the transfer and
transmission of shares.
6. **Issue of Shares at Premium**:
- Shares issued at a price higher than their nominal or face value are said to be issued at a
premium. The Companies Act, 2013, permits the issuance of shares at a premium, subject to
compliance with certain conditions and regulatory requirements.
- Relevant Sections: Section 52 of the Companies Act, 2013, deals with the issue of shares at
a premium.
7. **Further Issue of Shares**:
- A company may issue additional shares after its initial offering to raise additional capital.
The Companies Act, 2013, provides for the procedure and requirements for the further issue of
shares, including the approval of shareholders, compliance with regulatory requirements, and
filing of necessary documents.
- Relevant Sections: Sections 62 to 64 of the Companies Act, 2013, cover the further issue of
shares.
8. **Issue of Shares at Discount**:
- Issuing shares at a price lower than their nominal or face value is termed as the issue of
shares at a discount. The Companies Act, 2013, permits the issue of shares at a discount in
certain circumstances and subject to compliance with specified conditions and regulatory
approvals.
- Relevant Sections: Section 53 of the Companies Act, 2013, deals with the issue of shares at
a discount.
9. **Buy-back of Shares**:
- Buy-back of shares refers to the repurchase of a company's own shares by the company
itself. The Companies Act, 2013, regulates the buy-back of shares, prescribing conditions,
procedures, and limitations for buy-back transactions.
- Relevant Sections: Sections 68 to 70 of the Companies Act, 2013, govern the buy-back of
shares.
10. **Reduction of Share Capital**:
- Reduction of share capital involves decreasing the nominal value of a company's share
capital. The Companies Act, 2013, provides for the reduction of share capital under specified
circumstances, subject to compliance with procedural requirements and obtaining necessary
approvals.
- Relevant Sections: Sections 66 to 70 of the Companies Act, 2013, deal with the reduction
of share capital.
11. **Creation of Charges**:
- Charges refer to security interests created over a company's assets to secure repayment of
debt. The Companies Act, 2013, governs the creation, registration, and satisfaction of charges,
ensuring transparency and protection of creditors' interests.
- Relevant Sections: Sections 77 to 87 of the Companies Act, 2013, cover the creation,
modification, and satisfaction of charges.
12. **Deposits**:
 - Companies may accept deposits from shareholders or the public under certain conditions,
subject to compliance with legal requirements and regulatory oversight. The Companies Act,
2013, regulates the acceptance, repayment, and maintenance of deposits by companies.
- Relevant Sections: Sections 73 to 76 of the Companies Act, 2013, deal with the acceptance,
repayment, and maintenance of deposits.
13. **Debentures**:
- Debentures are debt instruments issued by companies to raise funds from investors. The
Companies Act, 2013, regulates the issuance, terms, and redemption of debentures, ensuring
investor protection and transparency.
- Relevant Sections: Sections 71 to 76 of the Companies Act, 2013, cover the issuance, terms,
and redemption of debentures.
Mid
1. Ravioli Ltd. intends to issue sweat eau PART- Ais employees. The board wants to offen
cavity to some employeessure sweat equity shares to its employees. The open for a non-case
issusideration. The Managing a subsidised price. Alternatively, it is also op shares can only be
issued for consideration Ring Director of Ravioli believes that the sweat equity and objects to
the second option. They have selved in cash and hence favours the first tower with the help of
relevant legal provisions.

Ans: . **Sweat Equity Shares Issue by Ravioli Ltd.**:

- Sweat equity shares are shares issued by a company to its employees as a form of incentive,
reward, or recognition for their contributions to the company's growth and success.
- As per the Companies Act, 2013, sweat equity shares can be issued either for consideration
other than cash or for non-cash consideration.
- The managing director of Ravioli Ltd. favors issuing sweat equity shares at a subsidized
price, which falls under the category of non-cash consideration.
- However, if the shares are to be issued for a subsidized price, it must be justified based on
relevant legal provisions, ensuring compliance with regulatory requirements and fairness to
existing shareholders.

2. The Articles of Association of Taco Shell Private Limited contain provisions for
entrenchment under Section 5 of the Companies Act 2013 what entrenchment provisions mean
in this context? Examine the scope of entrenchment under the said Act.
Ans: *Entrenchment Provisions in Taco Shell Private Limited's Articles of Association**:
- Entrenchment provisions in the Articles of Association allow certain clauses to be protected
from amendment or repeal by requiring a higher level of voting or consent than other
provisions.
- Under Section 5 of the Companies Act, 2013, entrenchment provisions can be included in
a company's articles to safeguard specific provisions, such as those relating to the rights of a
particular class of shareholders or directors.
- These provisions restrict the company's ability to alter or remove specified clauses without
obtaining the consent of a predetermined majority or following a prescribed procedure.
- The scope of entrenchment under the Companies Act, 2013, allows companies to protect
crucial provisions from unilateral changes, ensuring stability and protection of stakeholders'
interests.
3. Write any five differences between debenture and loan.

ANs: **Differences Between Debenture and Loan**:

- Security: Debentures are typically secured by assets of the company, whereas loans may or
may not be secured.
- Legal Nature: Debentures represent a form of borrowing for a fixed term with fixed interest
payments, while loans can be structured in various ways.
- Transferability: Debentures are generally transferable by endorsement and delivery, while
loans are not transferable.
- Priority in Repayment: Debenture holders usually have a higher priority in repayment in
case of liquidation compared to loan creditors.
- Interest Payment: Debentures usually carry a fixed rate of interest, while loan interest rates
may be fixed or variable.

4. What is Share Capital? Explain the concept of 'Reduction of Share Capital' and what are not
considered as reduction of share capital under Companies Act, 2013?
Ans: . **Share Capital and Reduction of Share Capital**:
- Share capital represents the total amount of capital raised by a company through the issuance
of shares.
- Reduction of share capital involves decreasing the nominal value of a company's share
capital by either canceling or reducing the liability on unpaid shares.
 - Reduction of share capital must be approved by the shareholders through a special
resolution and sanctioned by the National Company Law Tribunal (NCLT) as per the
Companies Act, 2013.
- Certain transactions are not considered as reduction of share capital, such as the buyback of
shares, forfeiture of shares, and surrender of shares for cancellation.

5. Spaghettiwala Ltd is into the business of food delivery. Mr. Nachochand has 26,700 shares
in Spaghettiwala. Nachochand sold 5,000 shares to M/s. Kulchanand Sons. Nachochand sent
the application to register the transfer of shares to Spaghettiwala by courier. The Articles of
Association of Spaghettiwala Ltd. provide that documents may be served upon the company
only through registered post. Spaghettiwala refused the application on the ground that it is in
violation of the Articles of Association. Examine with reference to the provisions of the
Companies Act, 2013 whether refusal of receipt of document and consequent non-registration
by the company is valid?
Ans : **Refusal of Receipt of Document by Spaghettiwala Ltd.**:
- According to the Companies Act, 2013, a company cannot refuse to register the transfer of
shares solely because the documents were served through courier instead of registered post,
especially if there is no specific provision in the Articles of Association requiring documents
to be served by registered post.
- The refusal by Spaghettiwala Ltd. to register the transfer of shares based on a technicality
not specified in the Act or the Articles of Association would likely be considered invalid.
- Nachochand's application for transfer of shares should be processed by Spaghettiwala Ltd.
in accordance with the provisions of the Companies Act, 2013, and any relevant provisions of
its Articles of Association.
1. "While Indian corporate law began as a legal transplant from England, it has been
progressively decoupled from its source with subsequent amendments and reforms
being focused either on finding solutions to local problems or borrowing from other
jurisdictions." Elaborate upon this statement.
Ans : The statement reflects the evolution of Indian corporate law from its initial adoption as
a legal transplant from England to its current state, which has seen a progressive decoupling
from its English origins. Let's elaborate on this statement:
1. **Legal Transplant from England**:
 - Indian corporate law has its roots in English common law, which was introduced during the
British colonial period. The Companies Act, 1850, modeled after English company law, was
the first legislative framework governing companies in India.
2. **Progressive Decoupling from English Law**:
- Over time, Indian corporate law has evolved independently to address local needs,
economic conditions, and regulatory challenges. Subsequent amendments and reforms have
led to a gradual decoupling from its English source.
- Indian lawmakers have recognized the necessity of tailoring corporate law to suit the
country's unique socio-economic context, leading to divergences from English company law
principles.
3. **Focus on Local Problems**:
- Many amendments and reforms to Indian corporate law have been driven by the need to
address specific local challenges and issues. For example, amendments related to corporate
governance, insider trading, and investor protection have been introduced to enhance
transparency, accountability, and investor confidence in the Indian market.
- The introduction of provisions like independent directors, corporate social responsibility
(CSR), and stricter disclosure norms reflects a concerted effort to address governance issues
prevalent in the Indian corporate sector.
4. **Borrowing from Other Jurisdictions**:
- While Indian corporate law has moved away from its English roots, it has also borrowed
concepts and practices from other jurisdictions to supplement its regulatory framework. For
instance, provisions related to mergers and acquisitions, intellectual property rights, and
competition law have been influenced by global best practices and international standards.
- India has actively participated in international forums and organizations to harmonize
corporate governance norms and align its regulatory framework with global standards.
5. **Continued Influence of English Law**:
- Despite the decoupling, elements of English company law continue to influence Indian
corporate law. Concepts such as limited liability, separate legal personality, and corporate
governance principles are deeply entrenched in both legal systems.
- Indian courts often refer to English legal precedents and principles to interpret and apply
provisions of Indian corporate law, especially in the absence of specific statutory guidance.
In conclusion, while Indian corporate law began as a legal transplant from England, it has
evolved over time to address local challenges and align with international best practices. The
progressive decoupling from its English source, coupled with a focus on local needs and
borrowing from other jurisdictions, reflects the dynamic nature of corporate regulation in India.
Q.. The understanding and application of the doctrine of ultra vires in the context of the
memorandum of association of a company has undergone a sea change. Using your
understanding of the doctrine from readings, class discussions, legislative provisions and cases,
comment on the need and applicability of the doctrine in India today.
Incorporating relevant sections of the Companies Act, 2013, and citing pertinent case laws can
provide a more comprehensive understanding. Here's an enhanced version of the paragraph
with relevant references:

Ans: The doctrine of ultra vires, originally conceived to restrict companies from acting beyond
the scope of their authorized activities as delineated in the memorandum of association (MOA),
has witnessed a transformative journey in contemporary corporate jurisprudence. Historically,
its stringent enforcement aimed to safeguard shareholders and creditors by preventing
companies from engaging in activities outside their designated objects. However, with the
evolution of business dynamics and legislative reforms, the doctrine has undergone substantial
modifications. Section 2(20) of the Companies Act, 2013, defines the MOA as the charter of
the company, delineating its objects and powers. Additionally, Section 10 allows companies to
alter their MOA with shareholder approval. In the landmark case of Ashbury Railway Carriage
and Iron Co Ltd v. Riche, the court emphasized the importance of the objects clause and held
that acts performed beyond the company's objects were void. However, subsequent decisions
such as the ruling in H. Ramanath Rai v. West Coast Paper Mills Ltd adopted a more liberal
approach, recognizing the doctrine's limitations and allowing companies to pursue activities
incidental to their main objects. The Companies Act, 2013, further relaxes the ultra vires
doctrine by permitting companies to engage in activities beyond their original objects with
shareholder approval through a special resolution, as provided in Section 13. Today, the need
for flexibility in corporate operations is recognized, acknowledging the imperative for
companies to adapt to changing market conditions and innovate to remain competitive. While
the doctrine's underlying principle of protecting stakeholders remains pertinent, its application
has been tempered to strike a balance between facilitating business growth and safeguarding
shareholder interests. In essence, the doctrine of ultra vires continues to shape corporate
governance practices, albeit in a more nuanced and adaptable manner suited to the complexities
of modern business environments.
Notes :
 Relation between MOA and AOA
AOA tells us how a company whose objects have been defined in the MOA will go about
achieving those objects. The act gives us the overarching framework by regulating the MOA.
AOA is subordinate to MOA-AOA is controlled by MOA.
They have to be read together. This means that if there is a gap in one you can read the other
to determine the scope. Case- Re Pyle Works
Example- Company X decides to raise share capital and every share is of Rs. 10. Rs. 5 is
uncalled on every share. The memorandum says that a company can borrow on the security of
its assets and credit. Its an overarching rule that governs the company. Now the AOA says the
company can mortgage its uncalled share capital to borrow money. Is the AOA exceeding the
broader framework of MOA? No, it continues to be within the ambit of MOA and are
subordinate to them, is only a more specific rule. If MOA exhaustively deals with a topic then
AOA can’t go beyond it.
Difference
Criteria MOA AOA
General Fundamental conditions under which Internal guidelines for the company
the incorporation of the company itself- between the company and
takes place- gives overarching members and amongst the members
principles
Scope Can’t go beyond the MOA. It is It is only giving effect to whatever is
primary. there in the MOA and cannot go
beyond it
Ease of Amendment Section 13- Rare and only in special Section 14- Only a special
circumstances- special resolution – resolution. No hurdle as such to
permission of government (delegated amendment.
to ROC, RD)
Exceeding the powers Void ab intio- can’t ratify at any point Initially void but can be ratified at a
later stage (only if it’s not in
contravention to MOA)