Business Laws: Companies Act (Part 1) || CA Foundation Sep 2024 || OTM Series
CA Wallah by PW・2 minutes read
The text provides an overview of the OTM Revision series, emphasizing syllabus completion by August 29, writing practice, sections of company law, and case law examples. It highlights key concepts like perpetual succession, limited liability, artificial personhood, and the importance of separating a company from its members, along with details on share transferability, member liability, and distinctions between public and private companies.
Insights
- Perpetual succession is a fundamental aspect of company formation, ensuring continuity beyond individual members.
- Limited Liability safeguards members, separating personal assets from company debts and obligations.
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Recent questions
What is the significance of perpetual succession in a company?
Perpetual succession is crucial in a company's formation as it ensures that the company continues to exist even if the original members or shareholders change. This means that the company has a continuous and uninterrupted existence, allowing for stability and longevity in its operations.
How does limited liability protect members of a company?
Limited liability ensures protection for members by limiting their financial responsibility to the amount they have invested in the company. This means that their personal assets are not at risk in case the company faces financial difficulties or legal issues beyond the investment made by the members.
What does the term "Corporate Veil" refer to in a company?
The term "Corporate Veil" refers to the legal concept that separates a company from its owners or shareholders. It signifies that the company is considered a separate legal entity, distinct from its members, and is responsible for its own debts, obligations, and actions.
How are unsecured creditors prioritized in winding up a company?
In winding up a company, unsecured creditors are paid first before secured creditors. This means that creditors who do not have collateral or security for their loans or debts are given priority in receiving payments from the company's assets during the liquidation process.
What are the restrictions in a private company?
Restrictions in a private company include no public subscriptions, specific offers allowed, and no acceptance of public deposits. Additionally, the maximum membership limit in a private company is 200, with past and present employee members not counted in this limit. These restrictions are in place to maintain the privacy and control of the company's operations within a limited group of individuals.
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