1. 5. CONSTITUTION OF A COMPANY
1.1. Optional for companies limited by shares (SECTION 31(1))
1.2. Mandatory for companies limited by guarantee(SECTION 38)
1.2.1. a)company limited by guarantee
1.2.2. b) objects of the company
1.2.3. c) capacity,rights,powers and privileges
1.2.4. d) numbers of members the company proposed to be incorporated
1.2.5. e) matters contemplated by this Act to be included in the constitution
1.2.6. f) any other matters that the company wishes to include.
1.3. Legal Effects Of The Constitution
1.3.1. SECTION32(3) Companies Act 2016 if the company decides to adopt the constitution,then it will be binding on:-
1.3.1.1. i. company
1.3.1.2. ii. directors
1.3.1.3. iii. members
1.3.2. SECTION 31(2) Companies Act 2016 for a company that has no constitution it will be binding on :-
1.3.2.1. i. company
1.3.2.2. ii. each director
1.3.2.3. iii. each member
1.4. Doctrine of 'Ultra Vires' Under Companies Act 2016
1.4.1. i. Object clause not required
1.4.2. ii. companies have rights,powers and privileges to enter any lawful business transaction
1.5. Doctrine of 'Ultra Vires' Under Common Law
1.5.1. i. Object clause required
1.5.2. ii. Company must not be beyond object clause, otherwise it will be ultra vires, therefore void and cannot be ratified
1.6. Amendment of the Constitution
1.6.1. SECTION 36- Company may amend its constitution by passing a special resolution, unless the constitution prohibits any amendment.
1.7. Effects of Constitution
1.7.1. SECTION 33(1) - Constitution is adopted it shall bind and form a contract :
1.7.1.1. i. between company & each member
1.7.1.2. ii. between members
1.7.2. Neither company nor members are bound to outsiders.
2. 4. THE PRE - INCORPORATION CONTRACT
2.1. Effects of The Company Under Common Law
2.2. Effects of the Contract Under the Companies Act 2016
3. 3. PROMOTER AND THE PRE-INCORPORATION
3.1. Promoter
3.1.1. -NO specific definition under Companies Act 2016/definitive judicial definition.
3.1.2. - EXCEPT for the purpose of liability on a prospectus (SECTION 2 Act 2016)
3.1.3. -Fiduciary relationship with the company.
3.2. Legal Duties of Promoters
3.2.1. -To whom disclosure should be made
4. 1. FORMATION OF A COMPANY
4.1. Documents Required(SECTION 14)
4.1.1. i. Super Form
4.1.2. ii. Declaration from Directors &Promoters
4.1.3. iii. Optional Constitution of Company
4.2. Application of Company's Name
4.3. Notice of Registration
5. 2. EFFECTS OF A COMPANY'S INCORPORATION
5.1. Characteristics of a Company
5.1.1. i. Body Corporate
5.1.2. ii. Company Can Sue and Be Sued
5.1.3. iii. Right to Own, Acquire or Dispose of Property /Assets
5.1.4. iv. Contractual Capacity
5.1.5. v. Liability of Members
5.1.6. vi. Perpetual Succession(Continuity of Life/Existence)
5.2. Exceptions to the Veil of Corporation
5.2.1. i. Statutory Exceptions
5.2.1.1. a) Distribution of Dividends out of Company's Profit(SECTION 131(1))
5.2.1.2. b) Fraudulent Tradings(SECTION 540(1))
5.2.1.3. c) Liability for Debts(SECTION 540(2)&539(3))
5.2.1.4. d) Default in Contribution(SECTION 46 Employees Provident Act 1991)
5.2.1.5. e) Default in Contribution(SECTION 108A Employees Social Security Act 1969)
5.2.2. ii. Judicial Exceptions
5.2.2.1. a) Prevention of Fraud or Improper Conduct
5.2.2.2. b) Avoidance of Contractual Obligation and Sham Companies
5.2.2.3. c) Public Policy or Enemy Character
5.2.2.4. d) Agency
5.2.2.5. e) Group of Companies