CA Foundation
Paper 2 - Business Law
i n
Ja
Chapter 6 (TCA)
The Companies Act, 2013
a
ny
Notes by - CA Chaitanya Jain
ita
Table of Contact for the Chapter
ha
INTRODUCTION.................................................................................................................................................................................2
APPLICABILITY OF THE COMPANIES ACT, 2013:............................................................................................................... 3
COMPANY: MEANING AND ITS FEATURES.......................................................................................................................... 4
C
CLASSES OF COMPANIES UNDER THE ACT.................................................................................................................... 14
MODE OF REGISTRATION/INCORPORATION OF COMPANY...................................................................................29
A
CLASSIFICATION OF CAPITAL..................................................................................................................................................37
SHARES................................................................................................................................................................................................38
C
MEMORANDUM OF ASSOCIATION....................................................................................................................................... 41
DOCTRINE OF ULTRA VIRES..................................................................................................................................................... 45
ARTICLES OF ASSOCIATION.................................................................................................................................................... 50
DOCTRINE OF INDOOR MANAGEMENT.............................................................................................................................52
EXCEPTIONS TO THE DOCTRINE OF INDOOR MANAGEMENT:........................................................................... 55
“ PROBLEM KYA HAI ? ”.................................................................................................................................................................58
,6 ▶️ The Companies Act, 2013
INTRODUCTION
i n
Ja
a
ny
ita
ha
C
A
C
2 Notes by CA Chaitanya Jain
, The Companies Act, 2013 ◀️ 6
● The Companies Act, 2013 was enacted to -
Consolidate and Amend the law relating to the companies.
● Extent to the whole of India
● The Companies Act, 2013
○ The Companies Act, 1956 —-->> 1942 —-->>1913
● The Act contains -
○ 470 sections and
n
○ 7 schedules.
i
○ 29 chapters.
Ja
○ A substantial part of this Act is in the form of Companies Rules.
● The Companies Act, 2013 aims to improve -
○ corporate governance,
○ simplify regulations,
a
○ strengthen the interests of minority investors and
ny
○ for the first time legislates the role of whistle-blowers and provisions relating
to class action suit.
ita
APPLICABILITY OF THE COMPANIES ACT, 2013:
The provisions of the Act shall apply to-
Companies Insurance Banking Electricity Companies
ha
incorporate companies companies Companies governed by
d under this except those except those (generation any special
Act or under provisions provisions or supply) Act.
C
any previous inconsistent inconsistent except those
company law. with The with The provisions
Insurance Banking inconsistent
A
Act, 1938 or Regulation with The
the IRDA Act, Act, 1949 Electricity
C
1999) Act, 2003
Notes by CA Chaitanya Jain 3
, 6 ▶️ The Companies Act, 2013
COMPANY: MEANING AND ITS FEATURES
Meaning
Chief Justice Marshall -
1. A corporation is an artificial being, invisible, intangible, existing only in
contemplation of law. Being a mere creation of law, it possesses only those
properties which the charter of its creation confers upon it, either expressly or as
n
accidental to its very existence.
i
Ja
2. Professor Haney -
A company is an incorporated association, which is an artificial person created by
law, having a separate entity, with a perpetual succession and a common seal.
a
3. Section 2(20) of the Companies Act, 2013 -
ny
“Company means a company incorporated under this Act or under any previous
company law”.
ita
FEATURES OF A COMPANY
Registered group of members. Public
ha
I Incorporated Association
7 and Private 2
As per the Articles as shares are
movable property. In Pvt restricted
C
T Transferability of Shares
but not prohibited & in Public freely
transferable
A
Members do not participate in day to
day affairs. The company is managed
C
Ownership - separate from its
O
members by BOD elected by members. So
ultimate control of members
Members may come and go but
P Perpetual Succession
company goes on forever.
4 Notes by CA Chaitanya Jain
Paper 2 - Business Law
i n
Ja
Chapter 6 (TCA)
The Companies Act, 2013
a
ny
Notes by - CA Chaitanya Jain
ita
Table of Contact for the Chapter
ha
INTRODUCTION.................................................................................................................................................................................2
APPLICABILITY OF THE COMPANIES ACT, 2013:............................................................................................................... 3
COMPANY: MEANING AND ITS FEATURES.......................................................................................................................... 4
C
CLASSES OF COMPANIES UNDER THE ACT.................................................................................................................... 14
MODE OF REGISTRATION/INCORPORATION OF COMPANY...................................................................................29
A
CLASSIFICATION OF CAPITAL..................................................................................................................................................37
SHARES................................................................................................................................................................................................38
C
MEMORANDUM OF ASSOCIATION....................................................................................................................................... 41
DOCTRINE OF ULTRA VIRES..................................................................................................................................................... 45
ARTICLES OF ASSOCIATION.................................................................................................................................................... 50
DOCTRINE OF INDOOR MANAGEMENT.............................................................................................................................52
EXCEPTIONS TO THE DOCTRINE OF INDOOR MANAGEMENT:........................................................................... 55
“ PROBLEM KYA HAI ? ”.................................................................................................................................................................58
,6 ▶️ The Companies Act, 2013
INTRODUCTION
i n
Ja
a
ny
ita
ha
C
A
C
2 Notes by CA Chaitanya Jain
, The Companies Act, 2013 ◀️ 6
● The Companies Act, 2013 was enacted to -
Consolidate and Amend the law relating to the companies.
● Extent to the whole of India
● The Companies Act, 2013
○ The Companies Act, 1956 —-->> 1942 —-->>1913
● The Act contains -
○ 470 sections and
n
○ 7 schedules.
i
○ 29 chapters.
Ja
○ A substantial part of this Act is in the form of Companies Rules.
● The Companies Act, 2013 aims to improve -
○ corporate governance,
○ simplify regulations,
a
○ strengthen the interests of minority investors and
ny
○ for the first time legislates the role of whistle-blowers and provisions relating
to class action suit.
ita
APPLICABILITY OF THE COMPANIES ACT, 2013:
The provisions of the Act shall apply to-
Companies Insurance Banking Electricity Companies
ha
incorporate companies companies Companies governed by
d under this except those except those (generation any special
Act or under provisions provisions or supply) Act.
C
any previous inconsistent inconsistent except those
company law. with The with The provisions
Insurance Banking inconsistent
A
Act, 1938 or Regulation with The
the IRDA Act, Act, 1949 Electricity
C
1999) Act, 2003
Notes by CA Chaitanya Jain 3
, 6 ▶️ The Companies Act, 2013
COMPANY: MEANING AND ITS FEATURES
Meaning
Chief Justice Marshall -
1. A corporation is an artificial being, invisible, intangible, existing only in
contemplation of law. Being a mere creation of law, it possesses only those
properties which the charter of its creation confers upon it, either expressly or as
n
accidental to its very existence.
i
Ja
2. Professor Haney -
A company is an incorporated association, which is an artificial person created by
law, having a separate entity, with a perpetual succession and a common seal.
a
3. Section 2(20) of the Companies Act, 2013 -
ny
“Company means a company incorporated under this Act or under any previous
company law”.
ita
FEATURES OF A COMPANY
Registered group of members. Public
ha
I Incorporated Association
7 and Private 2
As per the Articles as shares are
movable property. In Pvt restricted
C
T Transferability of Shares
but not prohibited & in Public freely
transferable
A
Members do not participate in day to
day affairs. The company is managed
C
Ownership - separate from its
O
members by BOD elected by members. So
ultimate control of members
Members may come and go but
P Perpetual Succession
company goes on forever.
4 Notes by CA Chaitanya Jain
