Law & Life

The  One Person Company (OPC)  is an innovative corporate structure introduced by the  Companies Act, 2013 , designed to facilitate the formal incorporation of micro and small enterprises by allowing a single entrepreneur to operate a company while enjoying the benefits of a corporate structure. 1. Definition and Legal Status A. Statutory Definition An OPC is defined under  Section 2(62) of the Companies Act, 2013 , as: "A company which has only  one person as a member ." The OPC is legally classified as a  Private Company  and is subject to most of the provisions applicable to private companies, except where specific exemptions are provided under the Act. B. Core Legal Features The OPC bridges the gap between a  sole proprietorship  and a  Private Limited Company  by retaining the essential advantages of corporate personality: Separate Legal Entity:  The company is distinct from its owner (member). It can own property, enter c...

  The term   Proxy   in Company Law holds a dual meaning: it refers both to the   representative   appointed by a member and the   instrument   (the legal document) that grants this authority. The proxy system is a vital mechanism ensuring shareholder democracy, allowing members who cannot attend a meeting to still exercise their fundamental right to vote. 1. Statutory Right and Definition The right to appoint a proxy is a fundamental statutory right granted to members of a company. A. The Right (Section 105(1)) Section 105(1) of the Companies Act, 2013 , states that any  member  of a company entitled to attend and vote at a meeting shall be entitled to appoint  another person  as a proxy to attend and vote at the meeting on their behalf. B. Legal Relationship The relationship between the member (the appointer/principal) and the proxy (the appointee/agent) is governed by the general  Law of Agency . The proxy acts as a represen...

The  Annual General Meeting (AGM)  is the most important general meeting of a company, mandated by law to be held once every calendar year. It serves as the primary formal forum where the directors (management) communicate the financial and operational status of the company to the shareholders (owners). 1. Statutory Obligation and Timing (Section 96) The requirement to hold an AGM is a fundamental aspect of corporate governance, ensuring transparency and accountability to the owners. A. Mandatory Holding Section 96(1)  mandates that  every company , other than a One Person Company (OPC), must hold an AGM in each calendar year. B. Timing Requirements The CA 2013 imposes strict deadlines for holding the AGM: Meeting Type Due Date Maximum Gap Extension Authority First AGM Must be held within  nine months  from the date of the closing of the first financial year. N/A No extension is permitted  by the Registrar of Companies (RoC). Subsequent AGMs Must be he...

The  Doctrine of Lifting the Corporate Veil  is a critical judicial tool that allows courts to disregard the company's separate legal personality and hold the individuals behind the corporation (the directors or shareholders) personally liable for corporate acts. It is the major exception to the foundational principle of Company Law. 1. The Fundamental Principle: The Veil of Incorporation The necessity of the lifting doctrine stems directly from the principle established in the landmark case of  Salomon v. A. Salomon & Co. Ltd. (1897) . Principle of Separate Legal Entity (SLE):  Upon incorporation, a company becomes an artificial legal person distinct and separate from its members, even if one person holds all or nearly all the shares. The rights, assets, and liabilities of the company belong solely to the company, not to the shareholders. The Veil:  This legal distinction creates a  metaphorical corporate veil  separating the company's assets and ...

The  Doctrine of Indoor Management , also famously known as the  Turquand Rule , is a fundamental common law principle in Company Law designed to protect third parties dealing with a company from internal irregularities they could not possibly know about. 1. Origin and Core Principle The doctrine originated in the landmark English case of  Royal British Bank v. Turquand (1856) . A. The Turquand Case Facts:  The Articles of Association (AoA) of the company (a public document) permitted the directors to borrow money on a bond only if they were authorized by a  resolution passed in a general meeting  of the shareholders (an internal act). The directors borrowed money from the Royal British Bank but  failed to pass the necessary resolution  internally. Issue:  Could the company evade repayment by arguing the internal procedure (the resolution) was missing? Held:  The company was  held liable . The court reasoned that the bank was entitl...

The  Promoter  is the individual or entity who takes the initiative to form a company, determines its objects, and undertakes the necessary steps to bring it into legal existence. They are often described as the  architects  or  parents  of the company. 1. Statutory Definition and Identification The  Companies Act, 2013 , provides a precise, functional definition of a promoter under  Section 2(69) , moving beyond the traditional judicial characterization. A person qualifies as a promoter if they satisfy any one of the following criteria: Named Status:  A person who has been  named as such  in the company's prospectus or is identified by the company in the annual return ( Section 92 ). Control:  A person who has  control over the affairs  of the company, directly or indirectly, whether as a shareholder, director, or otherwise. Influential Advice:  A person in accordance with whose  advice, directions, or inst...

The  Certificate of Incorporation (COI)   is the most crucial legal document in Company Law, often referred to as the  birth certificate  of a company. Issued by the  Registrar of Companies (RoC) , it marks the formal legal inception of the corporate entity. 1. Meaning and Statutory Basis The COI is a formal, government-issued document that certifies two primary facts: That a specific business entity has been  duly registered  under the provisions of the  Companies Act, 2013  (CA 2013). That the company has attained  separate legal personality  and  limited liability . Under  Section 7  of the CA 2013, once the necessary documents and declarations are filed and verified, the RoC registers them and issues the COI in the prescribed electronic form, which includes the  Corporate Identification Number (CIN) . 2. Contents of the Certificate A typical Certificate of Incorporation contains essential legal information th...

📖 The Prospectus: Content, Disclosure, and the Doctrine of Full Truth I. Introduction: The Prospectus as the Golden Rule of Disclosure The  Prospectus  is the official document issued by a public company when it invites offers from the public for the subscription or purchase of its securities (shares, debentures, etc.). It serves as the single most critical source of information for investors, embodying the fundamental corporate law principle known as the  "Golden Rule"  of disclosure:  The prospectus must contain every fact and figure necessary to enable a potential investor to make an informed and prudent decision. A. Statutory Definition Section 2(70) of the Companies Act, 2013  (CA 2013) defines a prospectus broadly to include: " any document described or issued as a prospectus and includes a  red herring prospectus  or  shelf prospectus  or any notice, circular, advertisement or other document inviting offers from the public for th...