What is meant by “One Person Company” (India)?

Law neither prohibits any of the relations from becoming members of the company nor desires to make any enquiry into the motives of the promoter so long as the objects of the company stated in the memorandum are legal. The Companies Bill 2011 which is yet to become a law has a provision for one […]

6 Consequences of Winding up a Company in India by Court Notice

3. The winding up order shall be deemed to be notice of discharge to the officers and employees of the company except when the business of the company is continued [Sec. 445 (3)]. 4. The powers of the board of directors will terminate and these will vest in the Official Liquidator, who shall by virtue […]

What is the meaning of “Contributory”? (Section 428 of the Companies Act)

When does the liability of the contributory arise? A contributory shall be required to contribute towards the assets of the company in the following circumstances: 1. In case the assets fall short for the payment of company’s debts, liabilities and the cost of liquidation; or 2. In case money is required for the adjustment of […]

Persons Liable as Contributories in Winding up of a Company in India

A past member shall not be liable to contribute: (a) If he has ceased to be a member for one year or upwards before the commencement of the winding up, or (b) The debts or any liability of the company was contracted for after he ceased to be a member, or (c) Unless it appears […]

Investigation of Ownership of a Company in India (Companies Act, 1956)

Under Section 247 (1A), the Central Government shall appoint one or more inspectors if the Company Law Board in the course of any proceeding before it declares by an order that the affairs of the company ought to be investigated as regards the membership of the company. This investigation may relate to determination of the […]

6 Grounds on which a Court can Order a Winding up of a Company in India

Petition on this ground can be presented either by the Registrar or by a contributory and it should not be filed before the expiration of fourteen days after the last day on which the statutory meeting ought to have been held [Sec. 439 (7)]. 3. Failure to commence business: When a company fails to commence […]

The Powers of the Inspectors Appointed by the Central Government to Investigate into the Affairs of a Company?

(a) The company’s subsidiary or holding company or a subsidiary of its holding company; (b) Managed by any person as managing director or as manager, or who is, or was at the relevant time either the managing director or manager of the company; (c) Managed by the company or whose board of directors comprises of […]

Useful Notes on Bonus Shares (Companies Act 1956)

Bonus shares can be issued only when the following conditions are satisfied: (i) The articles of association permits the issue of bonus shares; (ii) Company has sufficient undistributed profits; (iii) The Board passes a resolution for issuing bonus shares; (iv) The proposal of the board regarding issue of bonus shares has been approved by the […]

Investigation Into the Affairs of a Company by Central Government (Companies Act, 1956)

(a) He has failed to obtain the desired information and explanation from the company; or the documents furnished by the company convey an unsatisfactory state of its affairs. (b) He has obtained representation from a creditor, contributory or any other person against the fraudulent or unlawful conduct of the affairs of the company. II. Investigation […]

4 Binding Effects of Memorandum and Articles of Association

Members may sue to restrain a company from doing any ultra-vires or illegal acts or from acting on a resolution obtained by fraud or which is inconsistent with the Articles. Members may also sue the company for the enforcement of their personal right under the Articles, e.g., right to receive divided which has been declared. […]