VIGNESH KUMAR - Qualified Company Secretary

PROVISION COVERED Section 5 CONCEPT COVERED Articles of Association THE CONSTITUTIONAL DOCUMENT: Section 5 of the Companies Act, 2013 deals with the necessity of Articles of Association (hereinafter referred to as “AOA” / “Articles”) . Together with the memorandum of association, the AOA are collectively recognized as the constitutional documents for a company which administers a company and directs its activities in compliance with the law. These documents establish the fundamental corners of a company without which a company’s existence cannot be substantiated. ENFORCEMENT PURVIEW - PURPOSE: The purpose of the Articles is spilt out through the employment of phrase “ regulations for management of the company ” in Section 5(1) of the Companies Act, 2013. While the MOA sets out the purpose of existence of a company, the Articles on the other hand recognizes the existence of a company through the MOA and thereafter to supplement the ...

PROVISION COVERED Section 4 CONCEPT COVERED Can a Company exceed its legal power bestowed by the MOA KNOW YOUR MEANING : The Latin phrase Ultra vires connotes certain act(s) undertaken exceeding the legal power bestowed under a statute because of which such acts are recognised as unauthorised. Merriam Webster’s dictionary defines Ultra Vires as “beyond the scope or in excess of legal power or authority ”. The Supreme Court of India in “ State of U.P. & Ors. v. Hindustan Aluminium Corpn. Ltd. (1979) ” expounded that “That no doubt is another aspect of the doctrine  of  ultra   vires , for an offending Act can be condemned simply for the reason that it is unauthorised. ” THE DOCTRINE : Every company domiciled in India derive their power to operate from the Companies Act, 2013 read with rules made thereunder along with other legislations. The law does not constrict the companies on the nature of business act...

  PROVISION COVERED Section 4 RULE COVERED Rule 8A of the Companies (Incorporation) Rules, 2014 CONCEPT COVERED Circumstances in which name of a company is considered undesirable. INTRODUCTION : The economic corporate vessel recognised as a company under the law deploys its operations and functions in its name. A company to contract by itself needs an identity and the name of a company is such identity through which such entity gets recognised to the eyes of the stakeholders. Though the law does not ascribe to placing complete restriction on application and usage of a name of a company, Rule 8A of the Companies (Incorporation) Rules, 2014 as amended from time to time prescribes certain circumstances wherein the name of a company is considered undesirable. The Collins Dictionary defines the term undesirable as something that is not pleasant and objectionable. In this context, name of a company may be...

PROVISION COVERED Section 4 RULE COVERED Rule 8 of the Companies (Incorporation) Rules, 2014 CONCEPT COVERED Name reservation of Company NAME OF THE COMPANY – THE ESSENCE : Every Company is clothed with the character of being a distinct entity from its members and directors and distinguishable from other companies domiciled in India in terms of its name and scope of operation. The Andhra High Court in the case of “ Walnut Packaging Private Limited v. The Sirpur Paper Mills Limited (2008) ” held that “In Company Law,  separ ate  legal  entity of incorporated body has to be maintained for reasons more than one. ” Therefore, the legal status of company is established and beyond a reasonable doubt, the company being a separate legal entity shall contract with its stakeholders in its own name. Though the members are contributories and directors are the agents, yet the Company undertakes every tra...