Learn more. As Incorporation has marvelous advantages but not exempted from it’s disadvantages. Sec 82 gives expression to this principle by providing that “the shares or other interest of any member shall be movable property, transferable in the manner provided by the articles of the company.” When joint stock companies were established the great object was that the shares should be capable of being easily transferred. 5. A Law Dictionary, Adapted to the Constitution and Laws of the United States. The Act sometimes imposes personal liability on persons behind the veil in some instances like, where business is carried on beyond six months after the knowledge that the membership of company has gone below statutory minimum(sec 45), when contract is made by prescribing the name of the company(sec 147), when business is carried on only to defraud creditors(sec 542). Dtc Mazdoor Congress And Others vs Union Of India And Others, The Foreign Exchange Management Act of 1999, S.498A IPC – Indian Penal Code, 1860 – Cruelty and Harassment of Wife for meeting unlawful demand for property, MH CET LL.B. INCORPORATION, civil law. A company is a legal person. It is due to the fact that being attached to the management of the company gives them the status of business or executive class. Sometimes contracts thus made on behalf of a company even before duly incorporated. corporation is meant the body thus created. The process involves various stages, such as creating the articles of incorporation… Sebastian M. Hongray vs Union Of India & Ors (23 April 1984), I.R. All content on this website, including dictionary, thesaurus, literature, geography, and other reference data is for informational purposes only. The separate existence of a company may ignore when used as an agent or trustee. The important feature of a company is its independent corporate existence. However company is a separate legal entity distinct from its members who incorporate it. The union of one domain to another. An incorporated company never dies. Find legal advisor for issues relating to company law. In Natal Land and Colonization Co v. Pauline Colliery Syndicate, the promoters of a proposed company obtained an agreement from a landlord that he would grant lease of coal mining rights to the company. The names of managerial members need not pleaded. On the one hand they run the company as its owner (Policy maker) and on the other hand they are merely a servant of the company and take remuneration. – Sir Dinshaw Maneckjee, Re / Commissioner of Income Tax v. Meenakshi Mills Ltd. INCORPORATION. Section 19 of the Specific Relief Act provides that the other party can also enforce the contract if the company has adopted it after incorporation and the contract is within the terms of incorporation. CHANDRA RANGANATHAN AND OTHERS V. COMMISSIONER OF INCOME TAX, CHENNAI. They are as follows:- But wrong done by the Directors (criminal action ) are the responsibility of the Directors and not the responsibility of the Company. books, with corporation. Legal Definition of 'Incorporated' In its most technical, formal sense, the word "incorporated" means that a business has formed a corporation in one of the 50 states and is therefore a legal entity separate from its owners. In State Trading Corporation of India v. CTO, the SC held that a company though a legal person is not a citizen neither under the provisions of the Constitution nor under The Citizenship Act. The company, being a separate entity, leading its own business life, the members are not liable for its debts. A company can sue and sued in its own name. A company is capable of attracting professional managers. The common seal acts as the official seal of the company. Processes To Compel The Production Of Things, Difference between Compoundable and non compoundable offence. Two consenting parties are necessary to a contract, whereas a company before incorporation is a non-entity. A company does its business through its Directors. Incorporation however the legal process used to form a company or corporate entity. Coelho (Dead) By Lrs vs State Of Tamil Nadu & Ors on 11 January, 2007, Federation of Mining Associations v. State of Rajasthan. To cause to form into a legal corporation: incorporate a business. The directors of a company are in fiduciary position. In Vali Pattabhirama Rao v. Ramanuja Ginning and Rice Factory, a promoter of a company acquired a leasehold interest for it. Section 15 of the Act provides that where the promoters of a company have made a contract before its incorporation for the purposes of the company, and if the contract is warranted by the terms of incorporation, the company may adopt and enforce it. (See: corporation, incorporate). student of New Law College. n. the act of incorporating an organization. Required fields are marked *, The site and its contents are copyright of NearLaw.com,
The company is capable of holding and enjoying property in its own name. Incorporation is the way that a business is formally organized and officially brought into existence. Directors thus entitled to do any work on behalf of the company, what a company can do in ordinary course of business. Company can create in nearly all countries in the world and usually identified by the use of terms such as “Inc.” or “Limited” in their names. Corporations can only deduct net operating losses going back two years and forward 20 years. The articles of incorporation typically describe the company's business … • In Germany, Austria and Switzerland, the GmbH ("Gesellschaft mit beschränkter Haftung", meaning "limited liability business association"), as well as the AG ("Aktiengesellschaft", meaning "business association with shares"), are the entities most similar to the corporations in the US.