Thank you for sharing the files.

Based on the content from the class PPTs, lecture

notes, and the official question bank, I will now create a One-Day High-
Retention Study Guide for your MBL Corporate Law (Company Law) exam. The
guide will include:

📘 One-Day High-Retention Study Guide for Company Law (MBL Exam –

100 Marks)
🎯 A. 20% High-Yield Topics Likely to Cover 80% of the Exam

Ran Must-Read Case

Topic Key Areas Covered
k Laws

Salomon v. Salomon; Salomon v. Salomon

1 Separate Legal Entity
Corporate Attributes (1897)

Grounds (Fraud, Evasion

Daimler, Gilford v
2 Lifting of Corporate Veil of Tax, Enemy Company,
Horne, Renusagar
etc.)

Promoter & Pre- Duties, Liabilities, Legal Kelner v. Baxter,

3
Incorporation Contracts Position Newborne v. Sensolid

Memorandum of Association Ashbury Railway v.

Clauses, Alteration,
4 (MOA) & Ultra Vires Riche, Cotman v.
Effect
Doctrine Brougham

Prospectus and Private Types, Liabilities, Sahara

5 Sahara v. SEBI
Placement Case Impact

Doctrine of Constructive Turquand Rule,

6 Notice & Indoor Exceptions, Application Ruben v. Great
Management Fingall

Buy-back, Capital Bacha F. Guzdar v.

7 Share Capital & Reduction
Reduction, Types CIT

Incorporation & Legal Effect, Certificate Mossa Gulam Arif

8
Commencement of Incorporation Case

📚 B. Key Case Law Snapshots (Easy 4-Point Format)

1. Salomon v. Salomon & Co. Ltd (1897)
o Facts: Mr. Salomon incorporated his business and held most shares.

o Issue: Is the company a separate legal entity?

o Principle: Confirmed doctrine of separate legal personality.

o Decision: Company = separate person. Salomon not personally

liable.
 2. Daimler Co. Ltd v. Continental Tyre Co.
o Facts: A UK-registered company with German shareholders during
wartime.
o Issue: Can it be treated as an enemy?

o Principle: Veil can be lifted to see if the company is an enemy.

o Decision: Treated as enemy based on shareholder control.

3. Kelner v. Baxter (1866)

o Facts: Contract made before company formed.

o Issue: Who is liable?

o Principle: Pre-incorporation contracts not binding on company.

o Decision: Promoters personally liable.

4. Ashbury Railway Carriage v. Riche

o Facts: Company entered into contract outside its object clause.

o Issue: Validity of ultra vires act?

o Principle: Ultra vires acts are void and unenforceable.

o Decision: Contract void ab initio.

5. Sahara v. SEBI (2012)

o Facts: OFCDs issued to lakhs without complying with SEBI.

o Issue: Private placement or public offer?

o Principle: Over 50 persons = public offer under Companies Act.

o Decision: Sahara to refund Rs. 24,000 crore.

🧠 C. Exam Smart Tips & Mnemonics

 Mnemonic for Corporate Veil Exceptions – "FIRE TAP"
o Fraud

o Income tax evasion (Revenue Protection)

o Representing enemy character (Daimler)

o Economic Offence

o Trust breach

o Agency/Subsidiary misuse

o Public interest abuse

 MOA Clauses – "NAME SPOT"

 o Name

o Address (Registered office)

o Main Objects

o Existing (Ancillary) Objects

o Share Capital

o Powers (Optional)

o Other Info

o Terms of Subscription

 Promoter Duties – "DAD"

o Disclose interest

o Avoid secret profit

o Duty of good faith

📝 D. How to Frame a Strong 100-Mark Paper (Answer Strategy)

1. Use IRAC for 15-mark answers:
o Issue

o Rule (Statute + Case law)

o Application

o Conclusion

2. 10-mark answers: Focus on clear headings, bullet points, definitions +

one major case law.
3. Use legal language and cite sections from Companies Act, 2013 (e.g.,
S.2(56) for MOA).
4. Underline keywords and cases in your answer for visibility.
5. Structure answers using subheadings: Definition – Explanation – Case
Law – Application.

🔄 E. Revision Table: Concepts at a Glance

Concept Key Section Case Law Exam Tip

Separate Legal
S. 2(20) Salomon Always start with this in Q1
Entity

S. 339, judicial
Lifting the Veil Daimler, Gilford Use "FIRE TAP" mnemonic
doctrine
Concept Key Section Case Law Exam Tip

S. 2(69), S.19(e) Gluckstein v.

Promoter Duties Emphasize fiduciary duty
SRA Barnes

Pre-incorp Common Law +

Kelner v. Baxter Mention novation
Contracts SRA

S. 2(70), 26, 32, Compare with Private

Prospectus Sahara v. SEBI
34 Placement

Constructive Kotla Use with Indoor Mgmt

Doctrine
Notice Venkataswamy contrast

Indoor Ruben v. Great List exceptions: fraud,

Turquand Rule
Management Fingall negligence, forgery

F. Last-Minute Hacks
 Write answers in 3 layers: concept + provision + case.
 Memorize 5 landmark cases with 4-point format.
 Aim 1.5 minutes per mark (i.e., 15 mins for 10-mark, 22–25 mins for
15-mark).
 Attempt all questions—no negative marks; smart structuring matters
more than volume.

🧩 What is “Separate Legal Entity”?

Separate Legal Entity means that a company is treated as a person in the
eyes of the law—just like you or me. It has its own rights and duties, separate
from the people who own it.
When a company is registered, it gets its own legal identity, different from
the people (called shareholders or owners) who started it.

🔍 Why is this important?

Because it means:
 The company can own property.
 It can sue or be sued.
 It is responsible for its own debts.
 The personal assets of the owners are protected—they’re not usually
at risk.

Landmark Case: Salomon v. A. Salomon & Co. Ltd. (1897)

This is the most famous case that proved the company is a separate legal
person.
1️⃣ Facts of the Case
 Mr. Salomon ran a successful boot-making business.
 He turned his business into a company: A. Salomon & Co. Ltd.
 He was the main shareholder and director.
 The company later went bankrupt.
 Creditors (people the company owed money to) said Mr. Salomon should
pay, claiming the company was just him in another name.
2️⃣ Legal Issue
Was the company really separate from Mr. Salomon, or just a front (cover) for
his personal business?
3️⃣ Court’s Decision
The House of Lords (highest court in the UK at that time) said:
Yes, the company is a separate legal person, even if it’s owned and
controlled by one man.
4️⃣ Legal Principle
Once a company is legally registered, it is:
 Independent
 Distinct
 Not the same as its shareholders or directors
This is called the Doctrine of Corporate Personality.
5️⃣ Relevance to the Topic
This case is the foundation of modern company law. It shows:
 You can’t hold owners personally responsible for company debts (except in
some special situations).
 It protects limited liability, encouraging people to start businesses
without risking their entire life savings.

🧱 Key Attributes of a Company (Corporate Characteristics)

Think of a company like a robot with its own brain—it acts separately from the
people who built it.
Here are its main features:
1. Separate Legal Personality
  It has its own name and legal identity.
 It can do business, own property, and enter into contracts.
🧠 Example: “ABC Pvt Ltd” owns a car. The car belongs to the company—not to
the individual shareholders.

2. Limited Liability
 Shareholders are only liable up to the amount they invested.
 Their personal assets are safe.
💡 Example: If a shareholder bought ₹1 lakh worth of shares, they won’t lose more
than ₹1 lakh—even if the company goes bankrupt.

3. Perpetual Succession
 The company continues to exist even if a shareholder dies, quits, or sells
their shares.
 It lives on until wound up legally.
🌱 Example: People may come and go, but the company remains alive like a tree
continues growing even if some leaves fall.

4. Right to Sue and Be Sued

 The company can go to court or be taken to court in its own name.
⚖️Example: If someone breaks a contract with “XYZ Ltd,” the company itself—
not the directors—can file a lawsuit.

5. Ownership of Property
 The company owns its assets.
 Shareholders have no direct claim to the company’s property.
🏢 Example: Even if shareholders funded the company, they cannot say, “This
building is mine.” It belongs to the company.

6. Transferability of Shares
 In most companies, shares can be bought or sold freely.
 This makes it easy for people to invest or exit.
💰 Example: If you own 100 shares of a company, you can sell them to someone
else. The company won’t stop existing just because of that.
🧠 Final Summary

Concept What It Means Why It Matters

Separate Legal Protects owners, allows legal

A company is a person in law
Entity rights

Salomon Case First to prove this in court Foundation of company law

Corporate Legal personality, liability Encourages fair and stable

Attributes limits, etc. business

🎭 What is the Corporate Veil?

When a company is registered, it becomes a separate legal person—distinct
from its owners (shareholders), directors, or promoters. This separation is called
the “corporate veil.”
Imagine it like a curtain or mask that hides the people behind the company.
Normally, the law deals only with the company itself—not with the individuals
behind it.

‍♂️What is “Lifting of the Corporate Veil”?

Lifting (or piercing) the corporate veil means:
The court decides to look past the company and hold the people behind it (like
directors or shareholders) personally responsible for the company’s actions.
This is done only in exceptional situations, like fraud, tax evasion, or misuse of
the company form.

🧠 Why is this Important?

 It prevents abuse of the company structure.
 It ensures that justice is served when people try to hide behind the
company name to escape the law.

📜 Legal Grounds for Lifting the Veil

Here are the main situations when the courts may lift the veil:
1. Fraud or Improper Conduct
 If a company is being used to cheat or defraud others.
💼 Example: A director forms a company just to avoid paying debts he owes
personally.
2. Evasion of Tax
 When a company is created just to avoid taxes or reduce tax burden
illegally.
💰 Example: Splitting one business into many fake companies to show lesser
income and pay less tax.
3. Company as an Enemy Entity
 During war or conflict, if the real owners are from an enemy country,
courts may lift the veil to prevent threats to national security.
⚔️Example: A company registered in India but run by citizens of a hostile nation.
4. To Avoid Legal Obligations
 If someone uses a company just to escape legal duties or liabilities.
🛑 Example: A person creates a new company to avoid fulfilling a contract made
earlier.
5. Sham or Dummy Companies
 When companies are just fronts with no real business purpose—
created to hide the true controller.

🧑‍⚖️Key Case Laws You Must Know

Let’s look at the three landmark cases that show when and why courts lift the
veil.

🧷 1. Daimler Co. Ltd. v. Continental Tyre and Rubber Co. (1916)

1️⃣ Facts:
 Continental Tyre Co. was a company registered in England.
 However, most of its shareholders and directors were German.
 This was during World War I, when England and Germany were at war.
2️⃣ Legal Issue:
Was this English company actually a “German enemy” because it was
controlled by Germans?
3️⃣ Court’s Decision:
Yes. The court said the company was an enemy because its controllers were
enemies.
4️⃣ Legal Principle:
The corporate veil can be lifted to protect national interest. Courts can look at
the real people behind the company.
5️⃣ Relevance:
Shows that national security overrides corporate personality. You can’t use a
company to help enemy nations.

🧷 2. Gilford Motor Co. Ltd. v. Horne (1933)

1️⃣ Facts:
 Mr. Horne was a former employee of Gilford Motor.
 His contract barred him from starting a competing business.
 He started a new company in his wife’s name to compete with Gilford.
2️⃣ Legal Issue:
Was Mr. Horne using the company as a trick to bypass his legal contract?
3️⃣ Court’s Decision:
Yes. The court said the company was a “sham” or a “cloak” to cover up Mr.
Horne’s wrongdoing.
4️⃣ Legal Principle:
When a company is created to evade a legal obligation, courts can lift the veil.
5️⃣ Relevance:
Shows that corporate form cannot be misused to cheat others or escape
contracts.

🧷 3. State of U.P. v. Renusagar Power Co. (1988)

1️⃣ Facts:
 Renusagar Power Co. was a subsidiary of Hindalco (Birla Group).
 Hindalco argued that Renusagar was a separate legal company and
should get a lower electricity rate as an independent unit.
2️⃣ Legal Issue:
Was Renusagar truly an independent company, or just an extension of
Hindalco?
3️⃣ Court’s Decision:
The court said Renusagar and Hindalco were essentially the same for legal
purposes.
4️⃣ Legal Principle:
If a subsidiary acts only as an agent or puppet of the parent company, the veil
can be lifted.
5️⃣ Relevance:
Shows that group companies cannot use artificial separation to gain undue
advantage.

✍️Summary Table

Ground Meaning Case Law

Company used to cheat or hide

Fraud Gilford Motor v. Horne
wrongdoing

Company created to escape paying Sir Dinshaw Maneckjee

Tax Evasion
tax Petit (1927)

Controlled by enemy citizens in Daimler Co. Ltd. v.

Enemy Company
wartime Continental

Created to escape contracts or

Avoid Legal Duties Gilford Motor v. Horne
obligations

Dummy/Subsidiary Created only as a front for another Renusagar Power Co.

Use company’s control Case

🧠 Final Takeaway
Normally, the law respects the company’s separate identity.
But when people misuse the company to:
 Cheat
 Hide
 Evade
 Commit fraud
 Act against national interest
…then courts will lift the veil and hold the real people behind it
responsible.
This keeps the business world honest, fair, and accountable.

👤 Who is a Promoter?
Think of a promoter as the person who brings a company to life.
💡 A promoter is like an architect of a company. They plan, organize, and set
everything up before the company is officially born.
🔧 What Does a Promoter Do?
  Comes up with the business idea.
 Arranges money (capital).
 Finds office space.
 Gets lawyers and accountants.
 Files paperwork to register the company.
 Sometimes becomes the first director or shareholder.

🧾 Legal Definition (Section 2(69), Companies Act, 2013)

A promoter is someone who:
 Is named as such in official company documents;
 Has control over the company’s affairs;
 Or gives instructions the board usually follows.
👉 But! A lawyer or accountant helping professionally does not automatically
become a promoter.

🎯 Legal Duties of a Promoter

Since a promoter builds the company, the law expects them to act with honesty
and responsibility.
🧭 Key Duties:
1. No Secret Profits: If the promoter earns money during setup, they must
disclose it to the company.
2. Full Disclosure: Must share any personal interest in contracts or property
sold to the company.
3. Fiduciary Duty: Like a trustee. They must act in good faith and in the
company’s best interest.
4. Avoid Conflict of Interest: Cannot do personal business that competes
with or harms the company.

📜 What is a Pre-Incorporation Contract?

Imagine signing a contract before a baby is born. Can the baby be bound by it
later?
That’s what a pre-incorporation contract is.
It’s an agreement the promoter enters before the company legally exists—on
behalf of that future company.
⚖️Legal Position: Is It Binding?
Under general law, no—the company isn’t born yet, so it can’t be a party to
any contract.
But the law gives 3 outcomes:

Situation Outcome

Promoter signs "for and on

Promoter is personally liable
behalf of the company"

Company can’t “ratify” the contract,

Company is incorporated later
because it didn’t exist when the deal was made

Must sign a fresh (novation) contract with

Company wants to honour it
the same terms

🔍 Case Laws You Must Know

Let’s explore two classic cases that explain this better.

🧷 1. Kelner v. Baxter (1866)

1️⃣ Facts:
 Promoters of a hotel company signed a contract to buy wine before the
company was formed.
 After incorporation, the company took the wine.
 The company went bankrupt without paying.
2️⃣ Legal Issue:
Can the wine supplier sue the company? Or the promoters?
3️⃣ Court’s Decision:
The promoters were personally liable—not the company.
4️⃣ Legal Principle:
A company can’t be bound by a contract made before it was born.
You can’t “ratify” a contract if you didn’t exist.
5️⃣ Relevance:
Promoters should be very careful—they might end up personally responsible.

🧷 2. Newborne v. Sensolid (1954)

1️⃣ Facts:
 Mr. Newborne signed a contract for selling goods.
  He wrote: “Signed for Leopold Newborne Ltd.”
 Problem? The company didn’t exist at that time!
2️⃣ Legal Issue:
Can the contract be enforced?
3️⃣ Court’s Decision:
No one can enforce it. Not Mr. Newborne, and not the company.
4️⃣ Legal Principle:
If a company doesn’t exist, no legal contract can be formed. Even the
promoter can't claim rights unless he signs in his personal name.
5️⃣ Relevance:
If you're signing for a not-yet-existing company, be clear: You (not the
company) are taking the risk.

✅ How Can Promoters Protect Themselves?

Here’s what smart promoters can do:
 Avoid entering into binding contracts until incorporation is done.
 If urgent, insert a personal liability clause or clearly mention
novation required later.
 After incorporation, get the company to sign a new contract.

🧠 Summary Table

Topic Meaning

Promoter Person who sets up the company

Duties Honesty, no secret profits, disclose everything

Pre-incorporation
Contract made before company exists
contract

Promoter is liable unless new contract is signed

Liability
later

Kelner v. Baxter (liable); Newborne v. Sensolid

Important Cases
(contract void)

📘 What is the Memorandum of Association (MOA)?

The Memorandum of Association (MOA) is like the “birth certificate” and
constitution of a company. It defines:
📍 Who the company is,
📍 What it can do,
📍 Where it will operate.
It sets the boundary lines—the company cannot act beyond what is written in
the MOA.

📜 Legal Definition
Section 2(56) of the Companies Act, 2013 defines MOA as:
“The memorandum of association of a company as originally framed or as
altered from time to time.”
It contains the fundamental conditions upon which the company is formed.

🧩 Importance of MOA
 It tells what the company is allowed to do.
 It binds the company to its original purpose.
 It helps investors, creditors, and regulators know the scope of the
company’s activities.

🧱 Key Clauses of MOA (Remember with: "NAME SPOT")

Clause Meaning

Must end with "Limited" or "Private Limited". Example:

Name Clause
ABC Traders Private Limited

Address/Registered Office
States the official location of the company
Clause

Lists the main business activities the company will

Main Objects Clause
do

Other necessary activities to help achieve main

Existing/Ancillary Objects
objects

Share Capital Clause Declares the total capital and share structure

Powers (Optional) Additional powers, if any

Obligations & Liability States whether liability of members is limited or

Clause unlimited

Territorial Jurisdiction In case of foreign companies, area of operation

🔁 Alteration of MOA
Yes, MOA can be changed, but only with legal safeguards.
Process of Alteration:
 Special Resolution in general meeting.
 Approval from Central Government in some cases (e.g., name change
or object clause).
 Filing with Registrar of Companies (ROC).
⚠️However, you can’t change it to do illegal or unconstitutional acts.

🚫 Ultra Vires Doctrine: What is it?

Ultra vires is a Latin phrase that means “beyond powers.”
If a company does something not mentioned in its MOA, that act is ultra
vires and void—as if it never happened.

⚖️Why is Ultra Vires Important?

 It protects shareholders and creditors.
 It prevents misuse of company resources.
 It ensures the company stays within its legal limits.

📚 Key Case Laws

🧷 1. Ashbury Railway Carriage & Iron Co. Ltd. v. Riche (1875)

1️⃣ Facts:
 Company’s object in MOA: Make and sell railway carriages.
 Company entered into a contract to finance a railway project in another
country.
 The project failed, and a dispute arose.
2️⃣ Legal Issue:
Was financing a railway line part of the company’s authorized business?
3️⃣ Court’s Decision:
❌ No. The act was ultra vires and therefore void.
4️⃣ Legal Principle:
A company cannot do anything outside what is written in its MOA.
Even if all shareholders agree, it doesn’t make the act legal.
5️⃣ Relevance:
This case established the strict application of the ultra vires doctrine.

🧷 2. Cotman v. Brougham (1918)

1️⃣ Facts:
 The company had a long list of objects in its MOA.
 It entered a contract to underwrite shares—which wasn't its main
object.
 One clause in the MOA said: No object clause shall be treated as
subordinate.
2️⃣ Legal Issue:
Was the contract ultra vires?
3️⃣ Court’s Decision:
✅ Valid. The MOA said all objects had equal value—so the act was intra vires
(within power).
4️⃣ Legal Principle:
If a company clearly states that all object clauses are independent, then it can
act under any of them.
5️⃣ Relevance:
This case relaxed the ultra vires doctrine. It showed that smart drafting of
MOA can give more flexibility.

🧠 Real-Life Example
Let’s say a company is registered to manufacture shoes. Later, it decides to
open a restaurant without changing the MOA.
That act is ultra vires—and the restaurant agreement would be void.
Even if everyone agrees to it, the law won’t support it unless the MOA is
formally altered.

✅ Summary Table

Concept Explanation

Legal document defining a company’s

MOA
purpose

Ultra
Acts beyond MOA = void
Vires
Concept Explanation

Alteratio
Allowed with proper legal process
n

Key Ashbury Railway: Financing railway =

Case 1 ultra vires

Key Cotman v. Brougham: Broad MOA =

Case 2 valid act

🎯 Final Takeaway
 The MOA is the legal boundary for the company.
 Doing anything outside that boundary is not allowed.
 Courts will not protect companies or third parties if an act is ultra vires.
 But if the MOA is clearly written and updated, companies get more
operational freedom.

📘 What is a Prospectus?
A prospectus is a formal document a company gives to the public when it
wants to raise money by offering shares or debentures.
🧾 It’s like a brochure for investment—it tells you what the company does, its
financial health, what the money will be used for, and the risks involved.

🧠 Why is a Prospectus Important?

 Helps investors make informed decisions.
 Ensures companies are transparent and honest.
 Protects the public from fraud and misrepresentation.

Legal Definition (Companies Act, 2013)

Section 2(70) defines a prospectus as:
“Any document described or issued as a prospectus and includes any notice,
circular, advertisement or other document inviting offers from the public for the
subscription or purchase of any securities of a body corporate.”

📂 Types of Prospectus

Type Description Section

Regular General invitation to the public to invest in the Section

 Prospectus company 26

Red Herring Issued before IPO without details of price or Section

Prospectus number of shares 32

Shelf Used by companies to make multiple offers in Section

Prospectus one year with one master prospectus 31

Abridged A short summary of the main prospectus Section

Prospectus 2(1)

Deemed A document not called a prospectus but acts like Section

Prospectus one (e.g., when shares are offered through 25
intermediaries)

⚠️Liabilities for Misstatements in a Prospectus

If a company lies or hides key facts in its prospectus, it faces civil and criminal
consequences.
📌 Civil Liability – Section 35
 Investor can sue for loss caused due to false statements.
📌 Criminal Liability – Section 34
 Fraudulent misstatement = fine + jail (up to 10 years).
🧠 Even directors, promoters, or experts who signed the document can be
held responsible.

📪 What is Private Placement?

Private placement means raising funds privately, not by offering shares to
the public.
It’s like selling shares or debentures to a select group of people, not the
general public.

📜 Section 42 – Companies Act, 2013

This section governs private placements. Key features:
 Max 200 persons (excluding QIBs and employees under ESOP).
 Offer must be made via private placement offer letter (Form PAS-4).
 Payment must be via banking channel—no cash.
 Must file return of allotment (Form PAS-3) with the Registrar of
Companies (ROC).
 Needs special resolution from shareholders.
🛑 Difference: Public Offer vs Private Placement

Feature Public Offer Private Placement

Audience Open to all Limited to select group

Document Prospectus PAS-4 (Offer Letter)

s

Regulatio SEBI + Companies Companies Act only

n Act

Complianc Strict and detailed More flexible, but

e regulated

Risk Mass exposure Controlled risk

⚖️Landmark Case: Sahara India Real Estate Corp Ltd. v. SEBI (2012)
This is the most important case in Indian company law related to private
placements.

🧷 1️⃣ Facts:
 Two Sahara companies raised over ₹24,000 crores from over 3 crore
investors through Optionally Fully Convertible Debentures (OFCDs).
 Sahara claimed it was a private placement, not a public offer.
 SEBI said: No, you offered to the public and broke the law.

🧷 2️⃣ Legal Issue:

Was Sahara’s offer of debentures a public offer or private placement?

🧷 3️⃣ Court’s Decision:

 The Supreme Court said it was a public offer.
 Sahara violated both the Companies Act and SEBI regulations.
 Ordered Sahara to refund the money to investors with interest.

🧷 4️⃣ Legal Principle:

Any offer made to more than 50 people (now 200) is a public offer and must
comply with SEBI and Companies Act norms.
Calling it a “private placement” does not change its true nature.
🧷 5️⃣ Relevance:
This case led to:
 Stricter rules under Section 42.
 Limit of 200 persons for private placements.
 Mandatory use of banking channels.
 Requirement to file PAS-3 and PAS-4 forms.
It closed the loopholes that companies used to avoid compliance by
mislabeling public offers as private placements.

✅ Summary Table

Concept Meaning

Prospectus Document inviting public to buy company

securities

Types Regular, Red Herring, Shelf, Abridged,

Deemed

Liability Civil (Section 35), Criminal (Section 34)

Private Limited offer to selected investors (Sec 42)

Placement

Sahara Case Offer to 3 crore investors = public offer =

illegal

🧠 Final Takeaway
 Prospectus ensures transparency when raising money from the public.
 Private placement is allowed, but only within strict limits.
 The Sahara case proved that calling something “private” doesn’t make it
private in law.
 Today, both SEBI and the Companies Act work together to protect
investors and ensure fair play.

📘 What is the Doctrine of Constructive Notice?

The Doctrine of Constructive Notice says that:
💡 Anyone who deals with a company is assumed (by law) to have read and
understood the company's public documents.
These documents include:
  📄 Memorandum of Association (MOA)
 📄 Articles of Association (AOA)
These are available for inspection at the Registrar of Companies (ROC).

🧠 Why does it matter?

This doctrine protects the company. If someone makes a contract with the
company that goes against what's written in the MOA or AOA, they cannot
say, “Oh, I didn’t know.”
The law says: “You should have known.”

⚖️Real-Life Example:
Let’s say AOA says that only two directors together can sign a contract.
If a person signs a deal with just one director, and later the company refuses
to honour it, the outsider cannot complain. Why?
➡️Because they’re assumed to have read the AOA and seen this rule.

Case Law: Kotla Venkataswamy v. Rammurthy (1934)

1️⃣ Facts:
 A woman gave money to a company based on a document signed by just
one director and secretary.
 The company’s AOA required three officers to sign such a document.
2️⃣ Legal Issue:
Could she hold the company liable?
3️⃣ Court’s Decision:
❌ No. She should have checked the AOA.
4️⃣ Legal Principle:
People dealing with a company must take constructive notice of its rules.
5️⃣ Relevance:
This case confirmed that outsiders can’t ignore the company’s public
documents.

What is the Doctrine of Indoor Management?

This doctrine is the opposite side of the Constructive Notice rule.
💡 It says: Outsiders are not expected to know the company’s internal workings.
They can assume that:
 Internal processes are followed.
 Approvals are taken as required.
 Meetings were held properly.
This is known as the Turquand Rule.

🧠 Why is this fair?

Because public documents like AOA don’t show whether internal things—like
board approvals—were actually done. Outsiders can’t be expected to check
what’s going on inside the company.

📚 Key Case Law: Royal British Bank v. Turquand (1856)

1️⃣ Facts:
 A company borrowed money from a bank.
 Its AOA said the board could borrow only with a shareholder
resolution.
 No such resolution had been passed.
2️⃣ Legal Issue:
Was the loan valid?
3️⃣ Court’s Decision:
✅ Yes. The bank could assume the internal steps were taken.
4️⃣ Legal Principle:
Outsiders can rely on the assumption that internal rules have been followed,
unless they knew otherwise.
5️⃣ Relevance:
This case created the Doctrine of Indoor Management, also called the
Turquand Rule.

⚠️Exceptions to Indoor Management

Sometimes the doctrine does NOT protect outsiders. Here are the major
exceptions:

❌ 1. Knowledge of Irregularity
If the outsider knew something was wrong, they can’t claim protection.
🧾 Case: Howard v. Patent Ivory Manufacturing Co.
➡️Director gave security to himself. He knew the company hadn’t approved it
properly.

❌ 2. Suspicious Circumstances
If something looks fishy, the outsider must make inquiries. If they don’t, they
can’t claim protection.
🧾 Case: Anand Bihari Lal v. Dinshaw & Co.
➡️A company accountant sold property—something clearly not his job.

❌ 3. Forgery
If a company document is forged, it’s invalid. You can’t assume regularity in a
forged document.

📚 Key Case Law: Ruben v. Great Fingall Consolidated Co. (1906)

1️⃣ Facts:
 Company secretary forged signatures and issued share certificates.
 Ruben bought those shares.
2️⃣ Legal Issue:
Was the company bound by the forged certificates?
3️⃣ Court’s Decision:
❌ No. Forgery = null and void.
4️⃣ Legal Principle:
Indoor management doesn’t apply to forgeries.
5️⃣ Relevance:
This case shows that even honest outsiders are not protected when there is
forgery involved.

🔁 Summary Table

Concept Meaning Protects Case Law

Constructive You are assumed to know Company Kotla

Notice the company's MOA/AOA Venkataswamy

Indoor You can assume internal Outsider Royal British Bank

Management rules are followed v. Turquand

Exception: You knew something was ❌ Not Howard case

Knowledge wrong protected

Exception: You ignored warning signs ❌ Not Anand Bihari case

Suspicious protected

Exception: Forged documents are ❌ Not Ruben v. Great

Forgery invalid protected Fingall

🧠 Final Takeaway
 Constructive Notice: You must know what's in a company’s public
documents.
 Indoor Management: You don’t have to know how the company does its
internal approvals.
 Together, these doctrines create a balance:
o Outsiders must do some homework (public documents),

o But they’re not punished for not knowing what goes on inside
boardrooms.

📘 What is Share Capital?

Share Capital is the money a company raises from shareholders in
exchange for shares.
💡 Think of it as the “seed money” or “ownership money” given by people who
invest in the company and get shares in return.

Legal Basis – Companies Act, 2013

Relevant Sections:
 Section 2(84) – Defines share.
 Section 43 – Deals with types of share capital.
 Sections 66 & 68 – Cover reduction and buy-back of share capital.

💼 Types of Share Capital (As per Section 43)

Type Meaning

Authorised
Maximum capital a company can raise as per its MOA.
Capital

Issued Capital Portion of authorised capital offered to investors.

Type Meaning

Subscribed
Part of issued capital actually bought by investors.
Capital

Actual money received by the company for shares

Paid-up Capital
issued.

Called-up Amount company has asked shareholders to pay (can

Capital be partial).

💵 Types of Shares

Type Features

Equity Common shares with voting rights. Dividends not fixed.

Shares

Preference Get fixed dividends. Paid before equity shareholders. May or

Shares may not have voting rights.

🔁 What is Reduction of Share Capital?

Reduction of share capital means the company decreases its total capital,
either:
 by cancelling unissued shares,
 reducing the face value of shares,
 or buying back shares.
🧾 It helps companies reorganize finances, pay off excess capital, or clean up their
balance sheets.

✂️How Can a Company Reduce Share Capital?

Under Section 66 of the Companies Act, 2013, reduction can be done by:
1. Extinguishing liability on unpaid shares (e.g., reducing ₹10/share to
₹5/share).
2. Cancelling lost or unrepresented capital.
3. Paying off excess capital to shareholders.
📜 Conditions:
 Must pass a special resolution.
 Needs approval from the National Company Law Tribunal (NCLT).
 Creditors' interests must be protected.
📌 Real-life Example:
ABC Ltd has ₹10 crore capital but needs only ₹7 crore. It can reduce capital by:
 Paying ₹3 crore back to shareholders,
 Or cancelling unissued shares worth ₹3 crore.

🔄 What is Buy-back of Shares?

Buy-back means a company repurchases its own shares from the
shareholders.
🛒 Just like a store buys back defective products, companies buy back shares to
improve performance metrics or return excess funds.

🧾 Legal Rules – Section 68, Companies Act, 2013

 Buy-back can be done out of:
o Free reserves

o Securities premium

o Proceeds of earlier issue (not same kind)

 Approval needed:
o Board Resolution: For buy-back up to 10%.

o Special Resolution: If exceeding 10% (up to max 25%).

🚫 Restrictions:
 Not allowed if default in loan repayment.
 Gap of 1 year between two buy-backs.
 Maximum 25% of total paid-up capital and free reserves can be bought
back.

🎯 Why Do Companies Buy Back Shares?

 To increase share value (fewer shares = higher EPS).
 To use excess cash efficiently.
 To stop hostile takeovers.

🧑‍⚖️Key Case Law: Bacha F. Guzdar v. Commissioner of Income Tax

(1955)
1️⃣ Facts:
 Bacha Guzdar, a shareholder in a tea company, received dividends.
 Tea companies paid income tax on profits before distributing dividends.
 Guzdar argued that she should be treated as earning agricultural
income (which is tax-free), because tea comes from agriculture.
2️⃣ Legal Issue:
Is a shareholder entitled to the same treatment as the company, i.e., can she
claim dividends are agricultural income?
3️⃣ Court’s Decision:
❌ No. Dividends paid to shareholders are not agricultural income.
4️⃣ Legal Principle:
A shareholder is not the owner of the company’s assets. She only has a
right to dividends when declared, and that too from the company—not from its
income source.
5️⃣ Relevance:
This case clarified the nature of shareholding:
 Shareholders don’t own company property directly.
 They have rights to profits, not rights to underlying income or
assets.

📊 Summary Table

Concept Meaning Section

Share Money invested in exchange for company 2(84), 43

Capital shares

Reduction Cutting down capital by cancellation or 66

repayment

Buy-back Company buying back its own shares 68

Case Law Shareholders ≠ owners of company Bacha F. Guzdar v.

property CIT

✅ Final Takeaway
 Share capital is the foundation of a company’s financial strength.
 Reduction helps clean up and simplify the balance sheet.
 Buy-back boosts shareholder value and rewards investors.
  Bacha F. Guzdar case shows that shareholders have a right to profits,
not ownership of company income sources.

📘 What is Incorporation?
Incorporation is the legal process of creating a company under the
Companies Act. Once incorporated, the company becomes a separate legal
person—just like a new person is born.
🧾 It means the company now has a legal identity that is different from its owners
(shareholders or promoters).

🧑‍⚖️Legal Basis – Companies Act, 2013

 Section 3: Defines how a company can be formed.
 Section 7: Lists the steps for incorporation.
 Section 9: Describes the effect of incorporation.
 Section 10: Says that the company can enter into contracts like a real
person.

🧾 Steps for Incorporation

1. Name Approval from the ROC (Registrar of Companies).
2. Prepare documents:
o Memorandum of Association (MOA)

o Articles of Association (AOA)

o Declaration and ID proofs of promoters

3. File application with prescribed fees and forms (like SPICe+).

4. ROC verifies everything and issues a Certificate of Incorporation (COI).

📜 What is a Certificate of Incorporation (COI)?

It is the official birth certificate of the company.
Once this certificate is issued:
 The company becomes legally alive.
 It gets a Corporate Identity Number (CIN).
 It can sue and be sued.
 It can open a bank account, own property, and sign contracts.
🧠 COI is conclusive proof that the company is legally formed—even if there
were mistakes in registration!

🧑‍⚖️Key Case: Mossa Gulam Arif v. Custodian (1947)

1️⃣ Facts:
 A company was incorporated by some people.
 Later, it was discovered that there were irregularities in the formation.
 Someone tried to argue the company wasn’t validly formed.
2️⃣ Legal Issue:
Can the certificate of incorporation be challenged or cancelled if something
was wrong in the incorporation process?
3️⃣ Court’s Decision:
❌ No. Once the Certificate of Incorporation is issued, the company’s
existence cannot be questioned.
4️⃣ Legal Principle:
The COI is conclusive evidence of incorporation. Even the courts cannot
cancel it later on procedural grounds.
5️⃣ Relevance:
This case confirmed that once COI is issued, the company is considered legally
valid, no matter what happened earlier.

🟢 Legal Effects of Incorporation (Section 9)

Once incorporated, the company:
 Becomes a separate legal person.
 Gets perpetual succession (continues to exist even if owners change).
 Gets a common seal (optional now).
 Can own property in its own name.
 Can sue and be sued in its own name.

🧠 Real-Life Example
Let’s say Ramesh and Suresh start a company called "SweetBites Pvt Ltd."
Once they get the COI:
 "SweetBites" is a new legal person.
 Even if Ramesh dies, SweetBites continues.
  SweetBites can sign a contract, own a building, or go to court—just like a
real person.

Commencement of Business (Section 10A)

For a private company or public company (except listed companies), even
after incorporation, it cannot start business immediately.
It must:
 File a declaration (Form INC-20A) within 180 days stating that:
o It has received share money from all subscribers.

o It has a valid business office address.

⚠️If not done: The ROC can strike off the company!

🔁 Summary Table

Concept Explanation Section

Incorporation Legal process of forming a Sec 3, 7

company

Certificate of Proof of legal existence Sec 7

Incorporation

Legal Effect Company becomes a legal Sec 9

person

Commencement of Declaration needed to start Sec 10A

Business operations

Key Case COI is conclusive proof Mossa Gulam Arif v.

Custodian

✅ Final Takeaway
 Incorporation gives life to a company.
 Certificate of Incorporation is final proof—once issued, the company is
legally valid.
 After incorporation, the company must still file a declaration to begin
business.
 Courts have upheld that you cannot undo incorporation once COI is
granted—even if mistakes were made.

📘 Part 1: History and Evolution of Company Law in India

🔹 What is Company Law?
Company Law is the set of legal rules that governs:
 How companies are formed,
 How they operate, and
 How they are managed and dissolved.

Brief Timeline of Company Law in India

Yea Milestone
r

185 First Indian law on joint stock companies (modelled on UK law).

0

185 Limited liability allowed for companies.

7

186 Companies Act passed – earliest comprehensive Indian company law.

6

191 Indian Companies Act, 1913 (based on English Companies Act, 1908).
3

195 Companies Act, 1956 – a major law that governed Indian companies for
6 57 years.

201 Companies Act, 2013 – modernised law focused on transparency,

3 corporate governance, and investor protection.

🧠 The 2013 Act was brought in to address new business models, frauds, and
global compliance needs.

📘 Part 2: Types of Business Organisations

There are different ways a business can be structured, based on size, ownership,
liability, and purpose.
1️⃣ Sole Proprietorship
 🧍 Owned by: One person
 💼 Control: Full control with owner
 📜 Registration: Not mandatory
 💰 Tax: Income taxed as personal income
 💣 Liability: Unlimited (owner’s personal assets can be used to pay business
debts)
Example: A local grocery shop run by one individual.
2️⃣ Partnership Firm (Indian Partnership Act, 1932)
 👥 Owned by: Two or more persons (max 50 as per Companies Act)
 🤝 Agreement: Partnership Deed governs profit sharing, roles, etc.
 🔗 Liability: Unlimited and joint
 📜 Registration: Optional, but unregistered firms face legal limitations
Real-Life Example: A law firm with 3 advocates jointly owning and managing
the office.

3️⃣ Limited Liability Partnership (LLP)

(LLP Act, 2008)
 Hybrid of partnership + company
 Separate legal entity
 Liability: Limited to the amount of contribution
 Must be registered with the MCA
 Each partner is not liable for misconduct of the other
Best for: Professionals like architects, consultants, CA firms.

4️⃣ Company (Companies Act, 2013)

 🏢 Separate Legal Entity
 📜 Registered under Companies Act
 💼 Managed by: Board of Directors
 💰 Liability: Limited to unpaid share capital
 🧑‍⚖️Can sue or be sued in its own name
Types of Companies:

Type Features

Private Company Min 2 members, Max 200, restrictions on share

transfer

Public Company Min 7 members, can invite public to buy shares

One Person Company Only 1 member; simplified compliance for small

(OPC) businesses

Example: Infosys Ltd (Public Company), UrbanClap Technologies (Private

Company), single-person food delivery startup (OPC).
🧑‍⚖️Key Case Law: Salomon v. Salomon & Co. Ltd. (1897)
1️⃣ Facts:
 Mr. Salomon formed a company and sold his shoe business to it.
 He became the majority shareholder.
 Company went insolvent; creditors sued Salomon personally.
2️⃣ Legal Issue:
Is Mr. Salomon personally liable for the company’s debts?
3️⃣ Court’s Decision:
❌ No. The company is a separate legal person.
4️⃣ Legal Principle:
Once incorporated, a company has a life of its own—separate from its
owners.
5️⃣ Relevance:
This case laid the foundation for the principle of corporate personality in
company law.

⚖️Key Differences Summary Table

Criteria Sole Partnership LLP Company

Proprietorshi
p

Legal Entity Not separate Not separate ✅ Yes ✅ Yes

Liability Unlimited Unlimited Limited Limited

Registration Not compulsory Optional Mandatory Mandatory

Suitable for Small traders Joint businesses Professiona Scalable

ls businesses

Law None Partnership Act, LLP Act, Companies Act,

Applicable 1932 2008 2013

✅ Final Takeaway
 Business structures have evolved with India’s legal system—from
informal shops to global companies.
 Company form is preferred for large, scalable, investor-backed
businesses due to its features like separate personality and limited liability.
  Sole proprietorships and partnerships are ideal for small-scale
ventures.
 LLPs offer flexibility with reduced liability, especially for professionals.

📘 Part 1: Transfer vs. Transmission of Shares

🔹 What Are Shares?
Shares represent ownership in a company. A shareholder owns a “part” of the
company and has rights like:
 Voting
 Receiving dividends
 Transferring ownership

🔁 Transfer of Shares – Voluntary

This means a shareholder chooses to transfer shares to someone else—like
selling or gifting.

Feature Transfer of Shares

🔹 Nature Voluntary

🧾 Basis Written transfer deed (Form SH-4)

👥 Parties Between transferor (seller) and transferee (buyer)

Requires company board approval (especially in

Approval
Private Ltd.)

Mr. A sells 100 shares to Mr. B through a signed

💡 Example
document.

⚰️Transmission of Shares – Involuntary

This happens due to death, insolvency, or mental incapacity of a
shareholder.

Feature Transmission of Shares

🔹 Nature Involuntary

Legal documents like death certificate, succession

🧾 Basis
proof

👥 Parties Legal heir / nominee

Approval Only verification—no board rejection

💡 Example Mr. A dies. His son gets his 200 shares after providing
Feature Transmission of Shares

legal proof.

📜 Legal Reference: Companies Act, 2013

 Section 56 – Transfer and transmission of securities
 Rule 11 of Companies (Share Capital and Debentures) Rules, 2014
 SEBI Listing Obligations (for listed companies)

🧑‍⚖️Key Case Law: Pushpa Kuntala v. Andhra Bank Ltd. (1998)

1️⃣ Facts:
 A woman applied for share transmission after her husband's death.
 The company delayed it for months.
2️⃣ Legal Issue:
Can a company delay transmission?
3️⃣ Court’s Decision:
❌ No. If documents are complete, company must register transmission.
4️⃣ Principle:
Transmission is a legal right, not subject to board’s discretion like transfer.

📘 Part 2: Debentures
🔹 What Are Debentures?
Debentures are like loans taken by a company from the public or private
investors. Investors lend money and get fixed interest in return.
Think of it as a company’s way of “borrowing” money without giving up
ownership.

📦 Types of Debentures

Type Meaning

Backed by company assets (like

Secured Debenture
mortgage)

No security – only company’s

Unsecured Debenture
promise

Convertible Debenture Can be converted into shares later

Type Meaning

Non-convertible Debenture Cannot be converted – only

(NCD) repayable

📜 Legal Provisions
 Section 71, Companies Act, 2013 – Rules for issuing debentures
 SEBI (Issue and Listing of Non-Convertible Securities)
Regulations, 2021
 Debenture Redemption Reserve (DRR) – Some companies must set
aside funds for repayment

🧑‍⚖️Key Case Law: Sundaram Finance Ltd. v. NEPC India Ltd. (1999)
1️⃣ Facts:
 Debenture holders sued a company for not paying interest on time.
2️⃣ Issue:
Can debenture holders enforce payment like a debt?
3️⃣ Decision:
✅ Yes. Debenture = legally enforceable loan.
4️⃣ Principle:
Companies must honour debenture obligations just like bank loans.

📘 Part 3: Investor Protection

🎯 Why Protect Investors?
Investors trust companies with their money. Strong protection ensures:
 Transparency
 Trust in capital markets
 Fairness to small investors

Key SEBI Guidelines

Regulation Purpose

Empower SEBI to regulate and protect

SEBI Act, 1992
investors

LODR Regulations, 2015 Corporate governance rules for listed

Regulation Purpose

companies

ICDR Regulations, 2018 Rules for IPOs and public issues

Online investor grievance redressal

SCORES Platform
system

Prohibition of Insider Trading

Prevents unfair trading by insiders
Regulations

🧑‍⚖️Landmark Case: Sahara India Real Estate v. SEBI (2012)

1️⃣ Facts:
 Sahara collected money from millions through optionally fully convertible
debentures (OFCDs) without SEBI approval.
 SEBI said this was illegal public fundraising.
2️⃣ Issue:
Did Sahara violate SEBI laws?
3️⃣ Decision:
✅ Yes. Supreme Court held Sahara violated public issue rules and ordered
refund.
4️⃣ Principle:
All public fundraising must comply with SEBI norms, even if disguised.

🔍 Quick Recap Table

Concept Key Points

Transfer Voluntary; requires board approval (Form SH-4)

Transmission Involuntary; needs legal proof only

Debenture Debt instrument; carries interest; enforced by law

Investor
SEBI ensures fairness, redressal, compliance
Protection

Sahara (SEBI), Pushpa Kuntala (transmission), Sundaram

Case Laws
Finance (debentures)

✅ Final Takeaways
 Transfer = sale/gift of shares → voluntary
  Transmission = inheritance or legal shift → automatic
 Debentures = loans from public with legal protection
 SEBI = watchdog to ensure investors are not misled or cheated

‍ Who is a Director?
A Director is a person appointed to manage and control the affairs of a
company. Think of them like the captains of a ship—they take important
decisions to guide the company.

🔰 Legal Basis: Sections 149 to 170 of the Companies Act, 2013

These sections talk about:
 How directors are appointed
 What powers and duties they have
 When and how they can be removed
 What happens if they break the law

📌 1. Position of a Director
A director is:
 Agent of the company (acts on its behalf)
 Trustee of company’s property
 Fiduciary (must act honestly in the company’s best interest)
📖 Directors are not owners. They manage the company, but they don’t
own it unless they’re shareholders too.

📌 2. Types (Categories) of Directors

Type of Director Role

Executive Director Full-time, involved in daily operations

Non-Executive Not involved in daily operations, only policy matters

Director

Independent Must be impartial; required for listed companies

Director (Sec 149(6))

Women Director At least one required for certain companies (Sec

149(1))

Nominee Director Appointed by a bank or government

Managing Director In charge of overall management (Sec 2(54))

Whole-time Director Full-time employee with director powers

📘 3. Appointment of Directors – Section 152

 Directors are appointed by shareholders in general meetings
 Must have a Director Identification Number (DIN)
 Consent to act as director must be filed with ROC (Form DIR-2)
📌 Section 149 – Minimum Directors

Company Minimum
Type Directors

Private Co. 2

Public Co. 3

One-Person
1
Co.

Maximum directors allowed = 15

(More than 15 → special resolution needed)

🔎 4. Duties of Directors – Section 166

These are legal obligations every director must follow:
1. Act in good faith and in the company’s best interest
2. Avoid conflicts of interest
3. Not achieve personal gain from company business
4. Exercise independent judgment
5. Ensure compliance with the law
📖 Directors are fiduciaries — they must be loyal and honest.

⚖️ Key Case Law: Regal (Hastings) Ltd. v. Gulliver (UK)

11️⃣ Facts: Directors made secret profits from company’s business
opportunity
2 Issue: Can they retain those profits?
2️⃣
3 Decision: 3️⃣
No
4 Principle: Directors cannot profit from their position
4️⃣
5 Relevance: Reinforces fiduciary duty under Sec 166
5️⃣

⚡ 5. Powers of the Board – Section 179

The Board of Directors exercises all powers of the company except
those that need shareholder approval.
Some Key Powers:
 Borrowing money
 Investing company funds
 Approving financial statements
 Appointing key managerial personnel (KMP)
📌 Note: Some powers must be used by board resolution at board
meetings

🔧 6. Liabilities of Directors
➤ Civil Liability
 For breach of duty or negligence (e.g., causing financial loss)
➤ Criminal Liability
 For fraud, insider trading, false statements
➤ Statutory Liability
 If company fails to file returns or pay taxes, director can be held
responsible

⚖️ Case Law: Ferguson v. Wilson (UK)

1️⃣Facts: Director made decisions in company’s name
2️⃣Issue: Who is liable for those actions?
3️⃣Decision: The company is liable, not the director (if actions were within
authority)
4️⃣Principle: Director acts as agent of company
5️⃣Relevance: Defines scope of liability

🚫 7. Removal of Directors – Section 169

A director can be removed by:
1. Ordinary resolution by shareholders
2. Opportunity must be given to be heard
3. Company must follow proper procedure (notice, agenda, etc.)
📌 Exception: Cannot remove directors appointed by Tribunal under Sec
242 or by law.
💼 Managing Director – Section 2(54)
A Managing Director is a director entrusted with substantial powers of
management.
 May be appointed for maximum 5 years
 Needs board/shareholder approval
 Must comply with conditions under Schedule V of the Act

📝 Quick Summary Table

Topic Section Key Point

Board Sec 149 Minimum directors & independent

Composition directors

Appointment Sec 152 Process of appointment, DIN

Duties Sec 166 Fiduciary duties, loyalty, no conflict

Powers Sec 179 Decisions board can take

Liabilities Sec 166 + other Civil, criminal, and statutory liability

laws

Removal Sec 169 By shareholders with proper

procedure

✅ Final Takeaway
 Directors are the key decision-makers in a company.
 They have legal duties and liabilities and must act with honesty and
integrity.
 The law ensures transparency, accountability, and checks on their power.
 Proper procedures exist for their appointment, removal, and conduct.

🧑‍⚖️What is "Oppression and Mismanagement"?

In a company, decisions are often taken by the majority shareholders. But
what if the majority uses their power unfairly—to benefit themselves and harm
the minority shareholders or the company’s interests?
That’s where Oppression and Mismanagement laws help protect:
 Minority shareholders
 The company as a whole
 Fairness in corporate decision-making
💡 Key Terms

Term Meaning

When the majority acts in a way that is unfair, harsh, or

Oppression
prejudicial to minority shareholders

Mismanagem When the company is being run poorly, dishonestly, or

ent against the law, risking its survival

📜 Law Governing This: Sections 241–242 of the Companies Act, 2013

 Section 241: Who can file a complaint and when
 Section 242: What powers the tribunal (NCLT) has to fix the situation

🔍 1. Section 241 – Who Can Complain?

A complaint can be filed to NCLT (National Company Law Tribunal) if:
 Affairs of the company are being run in a way that harms shareholders
or the company
 There’s an ongoing act of oppression or mismanagement
 Public interest is at stake
✔️Who Can File?
 At least 100 shareholders, or
 Members holding 10% of the voting power, or
 With special permission from NCLT if fewer

⚖️2. Section 242 – What Can the Tribunal Do?

If the NCLT is convinced there’s oppression or mismanagement, it can:
 Remove directors
 Regulate future company decisions
 Order buyback of shares of affected members
 Cancel illegal transactions
 Even wind up the company if necessary

🧑‍⚖️Landmark Case: Foss v. Harbottle (1843)

1️⃣ Facts:
Two minority shareholders sued the directors of the company for misusing
company property.
2️⃣ Legal Issue:
Can minority shareholders bring an action for wrongs done to the company?
3️⃣ Court’s Decision:
❌ No. The company itself must sue, not individual shareholders.
4️⃣ Legal Principle:
The proper plaintiff for wrongs done to a company is the company itself, not its
shareholders. This is called the Rule in Foss v. Harbottle.
5️⃣ Relevance:
This rule protects majority rule in companies. But it also means minority
shareholders are often powerless—which is why Sections 241–242 exist.

🚫 Exception to Foss v. Harbottle

Courts allow exceptions where the minority can take action:
1. Fraud on minority
2. Illegal or ultra vires acts
3. When the company itself fails to act
4. Where a resolution was obtained by oppression
These situations allow Section 241 intervention.

🧑‍⚖️Key Indian Case: Shanti Prasad Jain v. Kalinga Tubes Ltd. (1965)
1️⃣ Facts:
Majority shareholders changed board composition to exclude a minority
stakeholder.
2️⃣ Legal Issue:
Was this action oppressive?
3️⃣ Court’s Decision:
✅ Yes, it was oppression.
4️⃣ Legal Principle:
Continuous exclusion of a shareholder from management is oppression even if
technically legal.
5️⃣ Relevance:
Used to interpret Section 397 (now 241) and define oppression.
🧑‍⚖️Another Case: Needle Industries (India) Ltd. v. Needle Industries
Newey (India) Holdings Ltd. (1981)
1️⃣ Facts:
Board issued shares only to themselves, diluting the minority’s stake.
2️⃣ Issue:
Was this an act of oppression?
3️⃣ Court:
✅ Yes. Directors cannot misuse their power to reduce another’s rights.
4️⃣ Principle:
Even if lawful, if action is unfair and discriminatory, it’s oppressive.

📌 Real-Life Examples of Oppression & Mismanagement

Oppressio Mismanageme
Situation
n? nt?

Excluding a minority from meetings ✅ Yes ❌ No

Taking loans without board approval ❌ No ✅ Yes

Transferring assets to majority-

✅ Yes ✅ Yes
owned firm

Failure to maintain accounts ❌ No ✅ Yes

📝 Summary Table

Aspect Details

Law Sections 241–242, Companies Act, 2013

Who Can File 10% shareholders or 100 members

What NCLT Can Remove directors, reverse acts,

Do regulate affairs

Foss v. Harbottle – Only company can

Key Case
sue

Exceptions Fraud, illegality, oppression

Indian Cases Shanti Prasad Jain, Needle Industries

✅ Final Takeaways
  Oppression = When majority uses power unfairly
 Mismanagement = When company affairs are run poorly or
dishonestly
 Sections 241–242 = Tools for minority to seek justice from NCLT
 Courts may intervene only in serious situations
 The goal is to restore fair and lawful management

📘 What is a Meeting in Company Law?

A meeting is when members (shareholders) or directors of a company come
together to discuss and decide important matters. It is essential for making
decisions legally and keeping the company transparent and accountable.

📌 Types of Company Meetings

There are two broad categories:
A. Shareholders’ (Members') Meetings
 Annual General Meeting (AGM)
 Extraordinary General Meeting (EGM)
B. Board Meetings
 Held by directors to run the day-to-day affairs of the company.
This topic mainly focuses on AGM and EGM, which are shareholders' meetings.

Annual General Meeting (AGM)

📌 Section 96 of the Companies Act, 2013
AGM is mandatory for all companies (except One Person Company) to
discuss:
 Financial statements
 Declaration of dividend
 Appointment/reappointment of directors and auditors
✅ Requirements of AGM:
 First AGM: Within 9 months from end of 1st financial year
 Subsequent AGMs: Every year, within 6 months from end of financial
year
 Gap between two AGMs: Not more than 15 months
 Notice: At least 21 days clear notice to members
  Must be held during business hours, not on a public holiday

🚨 Penalty for Not Holding AGM

 The company and officers may face a fine up to ₹1 lakh, and a daily
fine of ₹5,000 for continuing default.

⚡ Extraordinary General Meeting (EGM)

📌 Section 100 of the Companies Act, 2013
EGM is called when urgent matters arise that cannot wait until the next
AGM.
✳️Who can call an EGM?
 Board of Directors
 If members holding 10% or more of voting rights request it
🔍 Purpose:
 To change company name, registered office
 To issue new shares
 Appoint/remove directors
 Alter MOA or AOA

👥 Quorum for Meetings

Quorum means the minimum number of people required to make the
meeting valid.

Quorum (Minimum Members

Company Type
Present)

Private 2 members

Public (up to 1000

5 members
members)

Public (1001–5000
15 members
members)

Public (5001+ members) 30 members

If quorum is not present:

 The meeting is adjourned and held again on the same day next week.

Types of Resolutions
A resolution is a formal decision taken at a meeting.
1. Ordinary Resolution
Passed by simple majority (>50%).
Used for: Approving accounts, appointing auditors, etc.
2. Special Resolution
Requires 75% or more votes.
Used for: Changing MOA, AOA, shifting registered office, winding up, etc.
📌 Must be mentioned in the notice.

🌱 Corporate Social Responsibility (CSR)

📌 Section 135 of the Companies Act, 2013
Companies that meet the following criteria must spend at least 2% of average
net profits (last 3 years) on CSR:

Criteria (any one

Value
met)

₹500 crore or
Net Worth
more

₹1000 crore or
Turnover
more

Net Profit ₹5 crore or more

📌 CSR Committee:
 Minimum 3 directors, including 1 independent director
 Formulate CSR policy
 Recommend expenditure and monitor implementation
📌 CSR Activities (Examples):
 Eradicating hunger and poverty
 Promoting education and gender equality
 Environmental sustainability
 Contributions to PM CARES fund
🚫 Not allowed: Political donations, employee benefit programs

🧑‍⚖️Key Case Law: LIC v. Escorts Ltd. (1986)

1️⃣ Facts:
LIC (majority shareholder) was denied the right to attend an EGM by the
company.
2️⃣ Legal Issue:
Was the denial valid?
3️⃣ Court’s Decision:
❌ No. Every shareholder has a right to attend meetings.
4️⃣ Principle:
Right to vote and attend general meetings is a legal right, cannot be restricted
unfairly.
5️⃣ Relevance:
Highlights the importance of shareholder participation and transparency.

📝 Summary Table

Sectio
Topic Key Points
n

Mandatory every year, 21 days’

AGM Sec 96
notice

Sec Urgent matters, 10% member

EGM
100 demand

Sec Minimum members needed for

Quorum
103 validity

Resolution Sec Ordinary = >50%, Special =

s 114 ≥75%

Sec 2% of net profits on social

CSR
135 causes

✅ Final Takeaways
 Meetings are the official way to make and record company decisions.
 AGMs ensure transparency and accountability to shareholders.
 EGMs allow companies to take quick action on urgent issues.
 Resolutions formalise decisions and must follow the law.
 CSR shows the company’s commitment to social responsibility and is
now a legal mandate for large companies.

🌐 1. What Are These Terms?

Before jumping into the legal provisions, let’s understand the basic meaning:
Term Meaning

Compromis A settlement between a company and its creditors or members to

e solve a dispute or financial crisis

Arrangeme A restructuring of company affairs (like changing share capital,

nt business model)

Amalgamati
Two or more companies merge to form a new entity
on

Merger One company absorbs another, and only one continues

One company buys another (control + ownership) but both may

Acquisition
remain separate entities

📘 Legal Framework: Sections 230–232 of the Companies Act, 2013

These sections govern the process of compromises, arrangements, mergers,
and amalgamations in India.

📌 2. Why Are These Done?

 Revive a financially troubled company
 Restructure business for efficiency
 Avoid insolvency or liquidation
 Combine resources and markets
 Achieve tax or operational benefits

🔁 3. Step-by-Step: Procedure under Sections 230–232

Let’s simplify the legal process involved in such arrangements:
🔹 Step 1: Draft the Scheme
Company prepares a scheme of arrangement or amalgamation outlining:
 What changes will occur
 How stakeholders (creditors, members) will be affected
 Exchange ratio (if applicable)

🔹 Step 2: File Application to Tribunal (NCLT) – Section 230(1)

Application is filed by:
 The company,
  Creditors,
 Shareholders, or
 Liquidator (if company is winding up)
Tribunal = NCLT (National Company Law Tribunal)

🔹 Step 3: NCLT Orders Meetings – Section 230(1)

NCLT will:
 Order separate meetings of shareholders and creditors
 Issue notices with full details of the scheme
 Send copy to ROC, SEBI, Income Tax, etc.

🔹 Step 4: Approval in Meetings

For the scheme to pass:
 75% in value of creditors/members (present and voting) must approve it
Voting can be done in person, proxy, or electronically.

🔹 Step 5: Tribunal Sanction – Section 230(6)

If the NCLT finds the scheme:
✅ Fair,
✅ Reasonable, and
✅ Not against public interest,
It will approve the scheme by passing an order.

🔹 Step 6: Filing with ROC – Section 232(5)

The final approved order must be filed with the Registrar of Companies
(ROC). Then the scheme becomes legally binding.

🧑‍⚖️Case Law: Miheer H. Mafatlal v. Mafatlal Industries Ltd. (1996)

1️⃣ Facts: A minority shareholder challenged an amalgamation scheme
2️⃣ Issue: Can courts interfere if majority approve a scheme?
3️⃣ Decision: ❌ Court will not interfere if the scheme is:
 Fair
 Not against public interest
  Approved by majority
4️⃣ Principle: NCLT will not re-evaluate commercial wisdom if all
procedures are followed
5️⃣ Relevance: Confirms that tribunals respect majority-approved
schemes unless there's fraud

🧑‍⚖️Another Key Case: SBI v. Andhra Cements Ltd. (2015)

 SBI objected to merger scheme due to pending dues
 NCLT ordered safeguards for creditors before approving scheme
 Highlights importance of creditor rights in restructuring

⚠️4. Practical Challenges in M&A

Challenge Explanation

Creditor Objections Creditors may fear non-payment

Merger may create unexpected tax

Tax Implications
burdens

Employee
Job security during restructuring
Concerns

Multiple approvals (SEBI, CCI, IT Dept.)

Regulatory Delays
needed

Shareholder Minority shareholders may oppose

Litigation merger ratios

🔄 Real-Life Example
🔹 Vodafone–Idea Merger
 Combined to survive telecom price war
 Created India’s largest telecom company
 Required NCLT, SEBI, and DoT approvals

🔹 Tata Steel’s Amalgamation with Bhushan Steel

 Helped Tata expand capacity
 Done under IBC post insolvency process
 Approved by NCLT and all creditors
✅ 5. Key Points for Exam

Sectio
Purpose
n

Compromise/Arrangement between company &

230
creditors/members

231 Power of Tribunal to enforce/modify scheme

232 Specific rules for Mergers and Amalgamations

232(5) ROC filing of final order

📌 Final Takeaways
 Mergers and arrangements help companies survive and grow.
 Law ensures stakeholder consent and fairness.
 NCLT acts as the watchdog to prevent misuse.
 The process must follow due procedure and balance all interests.

⚖️What is the IBC?

The Insolvency and Bankruptcy Code, 2016 (IBC) is a law that helps
companies and individuals resolve their debt problems in a time-bound
and efficient manner.
Think of it as a legal “reset” button: If a company can’t pay its debts, the IBC
allows creditors (lenders/suppliers) to either:
 Restructure the debt and revive the company (Corporate Insolvency
Resolution Process – CIRP)
 OR liquidate (sell) the company and distribute its assets fairly

💡 Why Was IBC Introduced?

Before IBC:
 Multiple outdated laws (like Companies Act, SARFAESI, RDDBFI)
 Delays of 4–6 years in resolution
 No clarity or fairness in recovery
IBC was introduced to:
✅ Speed up insolvency process
✅ Improve ease of doing business
✅ Boost creditor confidence
📌 Applicability of IBC
The IBC applies to:
 Companies
 Limited Liability Partnerships (LLPs)
 Partnership firms and individuals (partially notified)
 Personal guarantors to corporate debtors

📘 Key Definitions (Simple Language)

Term Meaning

Corporate Debtor Company that owes money

Financial Creditor Lender (e.g., bank) who gave money on interest

Operational Supplier, employee, landlord — unpaid for

Creditor services/goods

Insolvency Inability to pay debts when they are due

Resolution Plan Proposal to revive the company and repay debts

Liquidation Selling all assets to repay creditors

⚙️Structure of the Code

 Part I: General provisions
 Part II: Deals with corporate insolvency (companies, LLPs)
 Part III: For individuals and partnerships

🚨 When Can Insolvency Be Started?

📌 Sections 7, 9, and 10 – Initiating CIRP

Sectio
Who Can File Condition Example
n

Loan unpaid for ₹1 Bank files against defaulting

Sec 7 Financial Creditor
crore+ company

Operational Goods/services not

Sec 9 Supplier files for unpaid bills
Creditor paid for

Corporate Company voluntarily admits it

Sec 10 Company itself files
Debtor can’t pay
🔁 Step-by-Step Process: Corporate Insolvency Resolution Process (CIRP)
1. Petition Filed (Sec 7/9/10) with NCLT
2. NCLT Admits the case → CIRP begins
3. Moratorium declared – all legal cases, recovery, etc. put on hold (Sec
14)
4. IRP (Interim Resolution Professional) takes control
5. Public announcement is made, inviting claims
6. Committee of Creditors (CoC) is formed
7. Resolution Plan is proposed by bidders
8. CoC votes (66%) to approve or reject the plan
9. If no plan – → Liquidation

Moratorium (Section 14)

 Like a pause button.
 Once CIRP begins, the company gets temporary legal protection:
o No recovery or eviction

o No lawsuits

o No asset sale

 Helps stabilize operations during insolvency

👥 Committee of Creditors (CoC)

 Formed by Financial Creditors
 They decide:
o Who will take over the company

o Whether to approve a resolution plan

o Whether to liquidate

🔒 Only Financial Creditors can vote (Operational Creditors can attend

but can’t vote).

💧 Liquidation (When Resolution Fails)

Triggered When:
 No resolution plan is approved within 330 days
 Plan is rejected
  CoC decides to liquidate
Liquidator sells:
 Assets of the company
 Distributes sale proceeds

💧 Waterfall Mechanism – Section 53

Priori
Who Gets Paid First
ty

1️⃣ IRP and liquidation costs

Secured creditors (if they give up

2️⃣
security)

3️⃣ Workmen’s dues (24 months)

4️⃣ Other employee dues (12 months)

5️⃣ Unsecured creditors

6️⃣ Government dues

7️⃣ Shareholders (if anything is left)

🧑‍⚖️Important Case Laws

1️⃣ Innoventive Industries v. ICICI Bank (2017)

 Facts: Innoventive defaulted on loan. ICICI filed under Sec 7.
 Issue: Whether state law (Maharashtra Relief Act) can override IBC?
 Decision: No. IBC overrides all conflicting laws.
 Principle: IBC has supremacy in insolvency matters.
 Relevance: Established IBC’s overriding nature.

2️⃣ Swiss Ribbons v. Union of India (2019)

 Facts: IBC challenged as unconstitutional.
 Issue: Is discrimination between financial and operational creditors valid?
 Decision: Yes, it’s valid.
 Principle: Classification based on different risk profiles is reasonable.
 Relevance: Upheld the constitutional validity of IBC.
3️⃣ Essar Steel Case (2020)
 Facts: CoC approved ArcelorMittal’s resolution plan.
 Issue: Could NCLT modify CoC's decision?
 Decision: No, CoC's decision is final if compliant with law.
 Principle: Commercial wisdom of CoC is supreme.
 Relevance: Courts cannot interfere with CoC's business judgment.

📝 Quick Summary Chart

Key
Concept Explanation
Section

Sec 7 / 9 / By financial, operational creditor, or

Initiation
10 company

Moratorium Sec 14 Legal protection pause

CoC Sec 21 Decision-making by financial creditors

Resolution
Sec 30 Strategy to revive debtor
Plan

Liquidation Sec 33 When resolution fails

Distribution Sec 53 Priority list for asset distribution

✅ Final Takeaways
 IBC is a game-changer in Indian debt recovery and business revival.
 It prioritises speed, creditor rights, and fairness.
 Understanding the initiation routes, moratorium, CoC, and liquidation
is crucial for exams.
 Cases like Innoventive, Swiss Ribbons, and Essar define the legal
strength of IBC.

📘 What Is Competition Law?

Competition Law ensures that businesses compete fairly and don’t misuse
their power in the market. The goal is to protect:
 Consumers (from high prices or limited choices)
 Other businesses (from unfair practices)
In India, this law is governed by the Competition Act, 2002, enforced by the
Competition Commission of India (CCI).

🌟 Why Do We Need Competition Law?

Without rules:
 Big companies can kill smaller ones
 Prices can go artificially high
 Consumers suffer due to limited choice and innovation
Competition law ensures that no player cheats or dominates unfairly.

Evolution of Competition Law in India

Phase Law Focus

MRTP Act, 1969 (Monopolies and

Old Controlled monopolies
Restrictive Trade Practices)

Curren Encourages fair competition and

Competition Act, 2002
t prevents abuse of power

MRTP was outdated—focused only on size, not behaviour.

Competition Act focuses on impact on competition, not just the size of the
company.

🧾 Key Definitions
📌 Agreement – Section 2(b)
Any understanding between two or more parties.
Even informal or verbal agreements count.
📌 Cartel – Section 2(c)
A secret agreement between companies not to compete—like fixing prices or
dividing markets.
🛑 It’s illegal.

🚫 Section 3 – Anti-Competitive Agreements

Any agreement that restricts competition is prohibited.
A. Horizontal Agreements
Between competitors at same level (e.g., two car makers)
Examples:
 Price-fixing (same price for all)
  Output restriction
 Market sharing
✅ Presumed to be anti-competitive (per se illegal)
🔍 Case: Automobile Manufacturers Cartel Case
Facts: Car companies restricted supply of spare parts.
Decision: CCI fined them ₹2,500 crore for collusion.
Relevance: Demonstrates how horizontal cartels harm consumers.

B. Vertical Agreements
Between parties at different levels of supply chain (e.g., manufacturer and
distributor)
May be anti-competitive if they:
 Fix resale prices (RPM)
 Tie two products together
 Exclusively supply to or buy from one party
✅ Effects must be proven harmful
🔍 Case: Sonam Sharma v. Apple India
Facts: Apple imposed conditions on its resellers.
Decision: CCI found no adverse effect, so no penalty.
Relevance: Vertical agreements are judged on impact, not just existence.

🦍 Section 4 – Abuse of Dominant Position

Dominant position = A company has so much market power that it can act
independently without caring about competitors or consumers.
Abuse happens when it:
 Imposes unfair prices/conditions
 Denies market access to rivals
 Uses dominance in one market to enter another
📌 Being dominant is NOT illegal. Abusing it is.
🔍 Case: Google Android Case (2022)
Facts: Google forced phone makers to pre-install apps.
Decision: CCI fined Google ₹1,337 crore.
Principle: Abuse of dominance through tying and bundling.
Relevance: Even global giants can’t misuse market power in India.
🔁 Combinations – Mergers & Acquisitions
When companies merge or get acquired, it’s called a combination.
📌 These must be notified to the CCI if:
 The deal value or turnover exceeds specified limits (as per Section 5)
The CCI checks:
 Will the merger reduce competition?
 Will it create a monopoly?
If yes → 🚫 Blocked or modified
🔍 Case: PVR–INOX Merger (2022)
Facts: India’s top two cinema chains merged.
Decision: CCI approved with no penalty, but kept watch.
Relevance: CCI ensures big mergers don’t hurt public interest.

🧠 Summary Table

Concept Section Meaning

Anti-Competitive Agreements that harm

Sec 3
Agreement competition

Powerful firms misusing their

Abuse of Dominance Sec 4
position

Secret pact between

Cartel Sec 2(c)
competitors

Horizontal Agreement Sec 3(3) Between competitors

Vertical Agreement Sec 3(4) Between supply chain levels

Combinations Sec 5 & 6 Big mergers and acquisitions

Regulatory
CCI Monitors and penalises
Body

✅ Final Takeaways
 Healthy competition is key for fair prices, innovation, and consumer
welfare.
 The law doesn’t punish success, but it punishes unfair dominance.
 CCI is the watchdog and has real power to investigate and fine.

📌 Revision Mnemonic – C-A-C-D

  C – Cartels (horizontal)
 A – Agreements (anti-competitive)
 C – Combinations (mergers)
 D – Dominance (abuse)

🎯 High Priority Topics (Must Prepare – 80% Exam Coverage)

These topics are frequently asked, carry high marks, and align with major
doctrinal areas tested repeatedly in the question bank.

Priori
Topic Justification
ty

Consistently repeated in 10M and 15M

Directors: Appointment,
🔴1 format; covers Sec 149–170, fiduciary
Duties, Powers, Liabilities
duties, board composition

Oppression and Almost always asked with IRAC

🔴2 Mismanagement (Sec 241- application; requires solid understanding
242) + Foss v. Harbottle of shareholder rights and NCLT powers

Meetings: AGM, EGM, CSR, Appears as both theory and application

🔴3 Resolutions (Sec questions; includes procedural &
96/100/135) substantive law

Doctrine of Constructive
Notice & Indoor Highly testable; conceptual + case-based
🔴4
Management (Turquand (Ruben v. Great Fingall)
Rule)

Memorandum of Core foundation + regular case law

🔴5 Association & Ultra Vires questions (Ashbury Railway, Cotman v.
Doctrine Brougham)

Often asked with landmark cases

(Daimler, Gilford v. Horne, Renusagar);
🔴6 Lifting of Corporate Veil
strong conceptual understanding
rewarded

IBC – CIRP, Liquidation, Sec Late addition to syllabus but now heavily
🔴7
7/9/10, CoC, Moratorium featured; practical and case-linked

Increasing relevance; tested with MRTP v.

Competition Law – Sec 3 &
🔴8 CA comparison, cartel examples,
4, CCI Cases
dominance cases like Google/Flipkart

🟠 Medium Priority Topics (Likely 1–2 Questions)

These are occasionally asked, often clubbed with other topics, and may
appear in 5M or short conceptual formats.
Priori
Topic Justification
ty

Important but mostly tested in conceptual

Promoters & Pre-
🟠9 5M format; focus on Kelner v. Baxter,
Incorporation Contracts
Newborne v. Sensolid

Prospectus, Private Legal compliance angle; often asked in

🟠 10
Placement, Sahara Case connection with SEBI rules

Share Capital, Buy-back,

Core finance governance; Bacha F. Guzdar
🟠 11 Capital Reduction (Sec 66,
often cited
Sec 68)

Compromise,
Sometimes appears as practical problem
🟠 12 Amalgamation, M&A
or concept short note
Process (Sec 230–232)

Transfer & Transmission of Not frequently tested standalone but

🟠 13 Shares + Debentures + combined with investor protection or
SEBI norms procedures

🟢 Lower Priority Topics (Rarely Asked but Conceptual)

These topics are less likely to be directly tested but may be used for short
notes or MCQ-based questions.

Priori
Topic Justification
ty

Often introductory; basic theory,

Types of Business
🟢 14 unlikely for 10M unless clubbed with
Organisations & History
evolution

Separate Legal Entity & Foundational but rarely tested beyond

🟢 15
Salomon v. Salomon 5M conceptual format

Incorporation &
Important but generally not tested in
🟢 16 Commencement, Certificate of
depth
Incorporation

✅ Smart Revision Strategy (80/20 Rule)

 First, focus on 🔴 topics with solid case law notes and bare act sections.
 Second, quickly revise 🟠 topics using flowcharts, bullet-point definitions,
and examples.
 Last, spend 20 minutes only on 🟢 topics for conceptual clarity.