CORPORATE LAW

3/5 YDC V SEMESTER'

2/3YDC,III SEMESTER
 UNIT I
• What is Company?
A company is a legal entity formed by a group of individuals to engage
in and operate a business which can be commercial or industrial
enterprise.
• The word “Company” is derived from the Latin word
com = with or together
panis = bread
• Originally referred to association of persons who take their meal
together.
 History of Company

• Group of people who took their lunch and talk together.

• The Bubbles Company Regulation Act, 1720 (also called The Bubble
Act, 1720). This Act is passed by Parliament of Great Britain.
 History of Company Act
• Indian Company Act is based on British model.
• The first act relating to Indian Companies in 1850 was based on Joint Stock
Companies Act,1844 of England.
• Companies Amendment Act, 1857 provided for registration of companies
with or without liability.
• Companies Act, 1866 replaced the Amendment Act 1857.
• After a series of amendments, Companies Act, 1956 was passed and came
into force on 1st April 1956.
• Later major amendments made in 2002 and finally The Indian Companies
Act, 2013 passed on 29th August 2013 after multiple amendments.
 Comparison
Companies Act 2013
• 29 chapters, 470 sections, 7 schedules.
Substantial part is in rules.
• The main objective of this act is lesser
government approvals and enhanced
self regulations coupled with emphasis
on corporate democracy.
• Some more changes like No of
directors increased to 15.
• Women directors compulsory for
certain companies.
Companies Act 1956
• 658 sections, 15 Schedules, 13 parts
• This act has been amended several
times in the past 57 years as they
have become outdated and
inadequate. Hence need for new Act.
Previously maximum directors were
12.
Women directors not compulsory etc.
 • Definition Of Company under
Companies Act,2013: Sec 2(20)
defines the term “Company” as
follows: “Company means a company
incorporated under this Act or under
any previous company Law”.

Company • A company is an incorporated

association which is created by law,
having a separate entity with a
perpetual succession and a common
seal.
Salient Features of a Company:
1. Incorporated Association
2. Artificial Legal person
3. Separate Legal entity
4. Perpetual Succession
5. Limited liability
6. Transferability of shares
7. Common Seal
8. Separate Property