lecture-29 - DEFINITION COMPANIES ACT,A COMPANY LESSON 29:...

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Learning Objectives At the end of this chapter, you will be able to · Identify the meaning and nature of a company · Identify the important characteristics of a company Introduction Today, we will begin with the Companies Act that was passed in 1956. In the lecture of today we will discuss the meaning and nature of a company. Do you know what do we mean by company? In simple words, a company can be defined as a group of persons associated together for the purpose of carrying on a business, with a view to earn profits. The word ‘Company’ is an amalgamation of the Latin word ‘Com’ meaning “with or together” and ‘Pains’ meaning “bread”. Thus, a company is nothing but a group of persons who have come together or who have contributed money for some common person and who have incorporated themselves into a distinct legal entity in the form of a company for that purpose. Section 3(1)(i) of the Act provides that, “a company means a company formed and registered under this Act or an existing company.” Section 3(1)(ii) lays down that, “ An existing company means a company formed and registered under any of the previous companies laws specified below.” a)any Act or Acts relating to companies in force before the Indian Companies Act, 1866 (10 of 1886), and repealed by that Act; b)The Indian Companies Act, 1866 (10 of 1866); c)The Indian Companies Act, 1882 (6 of 1882); d)The Indian Companies Act, 1913 (7 of 1913); e)The Registration of Transferred Companies Ordinance, 1942 (54 of 1942); and 40[ (f) An law corresponding to any of the Acts or the Ordinance aforesaid and in force- (1) In the merged territories or in a Part B State (other than the State of Jammu and Kashmir), or any part thereof, before the extension thereto of the Indian Companies Act, 1913 (7 of 1913); or (2) In the State of Jammu and Kashmir, or any part thereof before the commencement of the Jammu and Kashmir (Extension of Laws) Act, 1956 41[ in so far as banking, insurance and financial corporations are concerned, and before the commencement of the Central Laws (Extension to Jammu & Kashmir) There is very good definition by Lord Justice Lindey, “A company is an association of many persons who contribute money or money’s worth to a common stock and employ it in some trade or business and who share the profit and loss arising there from. The common stock so contributed is denoted in money and is the capital of the company. The persons who contribute it or to whom it belongs are members. The proportion of capital to which each member is entitled is his share. The shares are always transferable although the right to transfer is more or less restricted.” The Supreme Court of India has held in the case of State Trading Corporation of India v/s CTO that a company cannot have the status of a citizen under the Constitution of India.
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This note was uploaded on 09/27/2011 for the course BUS 100 taught by Professor Sherry during the Spring '11 term at Faculty of English Commerce Ain Shams University.

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lecture-29 - DEFINITION COMPANIES ACT,A COMPANY LESSON 29:...

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