1. LEGAL ENVIRONMENT OF INDIAN
BUSINESS
BBA Semester 4

2. Syllabus
 Section I
 Indian Companies Act (1956)
 Meaning & Nature of Company-Advantages & Disadvantages, lifting of corporate veil, company is
not a citizen
 Registration & Incorporation - Procedure of registration, certificate of incorporation, pre-
incorporation,
 Section II
 Contract, commencement of business.
 Memorandum and article of Association. - contents, main misrepresentation remedies for
misrepresentation (Sec. 56 and 61).
 Section III
 Directors - as agent, trustees, powers & duties, Managing Director - appointment Disqualification
& termination.
 Meaning – Statutory, Annual general & Extra - ordinary General Meeting, power of company Law
Board to meeting. Requisitions of a Valid meeting, voting, resolution & minutes.

3. Important Links (websites)
 http://www.mca.gov.in/
http://en.wikipedia.org/wiki/Ministry_of_Corporate_Affairs
http://en.wikipedia.org/wiki/Companies_Act_1956
 http://www.hanumant.com/CompanyLaw-ByAvinash.html
 http://www.legalserviceindia.com/company%20law/companylaw.htm


4. Unit1
The Company

5. Forms of Business Ownership Organisation
Business
Enterprise
Private Sector
Non-Corporate
Sole
Proprietorship
Partnership
Firm
Joint Hindu
Family Firm
Corporate
Joint Stock
Company
Co-Operative
Society
Joint Sector
Joint Stock
Company
Co-Operative
Society
Public Sector
Departmental
Undertaking
Public
Corporation
Government
Company

6. Companies Act and its
Administration
 The companies Act 1956
constitutes the company law
in India.
 The act contains 658 sections
and 15 schedules.
 The Companies
(Amendment) Act 2006:-
 MCA (Ministry of Company
Affairs
 MCA-21 (e-Governance,E-
filling)
 DIN (Director Identification
Number)-Section 266A to
266G
 The companies Act 1956
(Special features):
 LE of IB LinksIndian-
Companies-Act-1956.pdf
 Special features: The
Companies Act 2013
 Number of schedules : 7
 Number of chapters: 29
 Number of sections: 470
 LE of IB Linkscompanies-act-
2013-Key-highlights-and-
analysis.pdf

7.  Administration:
 It is Administered by the Central Government through the Ministry of
Corporate Affairs, Company Law Board and the Registrars of
Companies.
 The Company law board (day to day administration) has set up 4
regional offices with head quarters at Mumbai,Kolkata,Chennai and
Noida headed by regional directors.
 Registrar of Companies are there in each state of India (State
capital).
 ROC are Appointed by central government of India.
 ROC or registrar of companies is a public office where companies
are required to file documents and returns according to the
provisions of law.
 Public is authorised to inspect the same on payment of a prescribed
fee.

8. The Companies Amendment
Acts

9. Scion 3(1) and (2) of the companies Act,1956 define a
company as
“A company formed and registered under this act or an
existing company”
An existing company means a company formed and
registered under any of the former companies acts.
Definition of Company

10. A company is an incorporated association,which is an
artificial person created by law,having a separate entity,with a
perpetual seccession and a common seal.
Haney

11. LE of IB Links1The Company Act.docx
LE of IB Links2Companies Act 1956.docx

12. Characteristics of Company
 LE of IB LinksCHARACTERISTICS OF A COMPANY.docx

13. Company & Partnership Distinguished
 LE of IB Links4Distinction between Company and Partnership.docx

14. Difference between a Partnership & a Company
Partnership Company
Creation By an
agreement/Registration
under Partnership Act
,1932,is optional
By registration under
companies Act,1956
Number of Members Min.2-/Max 10(Banking),20
(other business)
Private-min-2 to
max.50/Public min-7 to
max-No limit
Legality of existence No legal existence apart
from its members(firm and
partners are one and the
same)
Separate legal entity
Property Belongs to individual
partners
Belongs to the company
Contract Partners can not do so with
the firm/but can do so with
other partners
Shareholders may enter
into a contract with the
company

15. Contd.. Partnership Company
Creditors The creditors of partnership
firm are the creditors of
individual partners
The creditors of the
company are not the
creditors of individual
shareholders
Mutual Agency Partners is an agent of his
firm
Shareholder is not an agent
of the company
Liability Unlimited Limited
Transferability of shares Can not transfer without
consent of other partners
Freely transferable(Public)
Restricted in Pvt. Company
Continuity Not perpetual Perpetual
Management Partners participation Shareholders does not
Definition of powers In partnership deed Memorandum (MoA & AoA)
Statutory obligations
(account
maintenance/distribution
of profit etc.)
No Subject to Companies Act

16. Advantages & Disadvantages of Incorporation or
Company
 LE of IB Links5Advantages & Disadvantages of incorporation.docx

17. Lifting the veil of Corporate
Personality
 LE of IB Links6Lifting the Veil of Corporate Personality.docx

18. Company is not a citizen
 LE of IB Links7Is company a citizen.docx

19. Illegal Associations
 LE of IB Links8Ille g a l A s s o c ia tio n.docx