Trilok Gupta's Blog

Company: The word “Company” is derived from a Latin word “Com” means “together” and “Panis” means “Bread”. It means, an association of persons had meals together and started discussing on the future venture. When such association got registered or incorporated as per law, it becomes a company with corporate personality. As per Sec-2(20) of Company Act 2013, a company means, A company incorporated under this act or any previous company law i.e. the company established under any existing company law, will continue to be a company. A company on incorporation becomes a separate legal entity and it is distinct from its members. A company is an artificial person and is managed by a natural person. It is vested with many rights, duties and powers as prescribed by the law. The company is distinct from its members and thus an Imaginary veil separates a company from its members. According to Justice James, a company is an association a person’s united for a common purpose. Characteristics: 1) C...

Allotment of Shares: Offer for shares are made on the application forms supplied by the company. When an application is accepted, it is an allotment. An allotment is not defined in the act. Spitzol V Chines Corporation It is said that the allotment of the shares is done by a resolution of directors of a company. Statutory Restrictions on Allotment (Sec-39): 1) Minimum Subscription 2) Application Money 3) Application money to be kept in the Bank 4) Repayment if the minimum subscription is not received 5) Shares to be dealt in the stock exchange 6) No Opening of subscription list before 5th day after the issue of prospectus. Minimum Subscription: When the shares are offered to the public, the amount of minimum subscription has to be stated in the prospectus, if not mentioned, then it is invalid. Application Money: The amount of the application form shall be less than 5% of the nominal amount of each share. Application money to be kept in a Bank: All the moneys received from the sha...

Winding Up: 1) Winding up of a company is a process through which the life of the company comes into an end. 2) In this process the management of the company is taken away from the hands of the Directors of the company. 3) An administrator called a liquidator is appointed and he takes the control of the company, collects the assets, liabilities are discharged (i.e. all the creditors) and finally distributes if any surplus among the members. 4) At the end of the winding up, the company is left with no assets and liabilities and thus gets formally dissolved. Compulsory Winding up: 1) The winding up process done by the tribunal is known a compulsory winding up of a company. 2) It is also known as Tribunal Winding up. 3) Chapter XX, Part – 1of the CA 2013 deals with the compulsory winding up. Grounds for winding up by Tribunal: 1) Special Resolution 2) Acts against sovereignty 3) Default in filing the statements 4) Fraudulent Conduct 5) Just and Equitable. Person who can file a Petition to...