As per section 2(5) of the Companies Act, 2013 Article of Associations (AOA) are the set of rules, regulations or laws that govern the management of the of the company. Articles of Associations is a type legal of document that specifies the laws and rules for a firm’s purpose, its operations, management of its internal affairs and the conduct of its business activities. These articles of associations essential for the management of a company and mention and deal with the member’s right of the company. AOA defines the legal rights, duties, and powers of the governing bodies i.e. the management of the company amongst themselves and for the company at large (Companies Act, 2013). AOA are subordinate and secondary to the Memorandum of Association. Both memorandum and AOA have legal effect on the company. The article of association deal and list the laws for the following:
Share capital, classes and values of share, the rights attached to them
Procedure for issue share capital, share allotment, transfer of shares, conversion, alteration of shares, lien of shares
Voting rights of the members
Dividends and reserves
Qualification, appointment or removal, remunerations, power and duties of their directors, and other members of the company
Rules for the custody and use of common seal of the company
Accounts and audits and the appointment, powers, duties, and remuneration of the auditors
Rules and procedures for passing of resolutions, underwriting commission and arbitration provisions
Procedures of company winding up of firm
According to Section 25(1) of the Company’s Act, 2013 the term prospectus can be explained as set of legal documents containing the offers from the public for investment. In in simple terms prospectus is any document issued, any notice circular, advertisements or any other such document of invitation for the public for purchase and subscription of the shares or securities of the corporate body. The key objective of any company to issue prospectus is to attract and increase the public interest in the company. The company through its prospectus encourages the general public to buy and invest in the shares, securities and debentures of the company. All prospectus of the company should fulfill the following legal provisions as follows:
All prospectus issued need to be dated and the date should be considered as date of publication
It should mention all the information specified by SEBI
A prospectus copy signed by all directors, and should be sent to the office of registrar before the publication date, and this activity must be mentioned with in all prospectus which is being issued to common public.
A prospectus must be issued within 90 days after the date of the delivery of copy for registration.
It should include compliance declarations for the provision of the act and also mention that the prospectus does not contain anything in contravention to the provisions of the Companies Act, Securities Regulation Act, 1956 and Securities Exchange Board of India Act, 1992.
Any contract contains six essential elements to make it valid i.e. offer, acceptance, intention, free consent, consideration and capacity to contract(Indian Contract Act, 1872).
Copyright Act, 1957 governs the copyright law in India and protects original literature work, artistic work, cinematography films and sound recording works from misuse and unauthorized uses (The Copyright Act, 1957).
Contract of sale is a legal document or contract for the purchase of goods or assets by a buyer from a seller under certain terms and conditions which are mentioned in writing in the contract (Indian Contract Act, 1872).
The paying banker is the banker on whom the cheque is drawn or the banker who has to pay the cheque drawn on him.
Crimes committed using computers as instruments for illegal actions and frauds are called cyber-crimes.
Section 2(1)(f) of the Consumer Protection Act, 1986 explains defects as any mind of imperfection, or fault or any shortcoming in a good as per a certain parameter of goods. These parameters of goods are quality, quantity, purity, potency, and standard. Example when a consumer purchases a good such as a piece of cloth and observes hole in the cloth, then such a product is said to have a defect or is defective. Defects in goods can be in terms of their shape, size, colour, etc. The is essential for the producers and manufactures and the sellers of goods to vigilant and provide defect free goods to the consumers.
The Consumer Protection Act also protects the rights of the consumer in relation to services, along with goods. Section 2(1)(g) of the Consumer Protection Act, 1986 explains the deficiency in services. This deficiency explains that, any fault, inadequacy, shortcomings and imperfection in the quality service is a deficiency. This deficiency also relates to the nature and the performance of the service. Deficiency of service causes inconvenience to the consumers. Example if a bank suddenly shuts down its operation for a day without any prior notice to its customers, this deficiency in services causes great inconvenience to the customers as many important financial transactions of them are suspended.
It is important for the goods and services to maintain the this standard Hence, if any good or service is flawed, and does not fulfil the requirements of the laws applicable, it is defective or deficient.
Section 148 of the Indian Contract Act, 1872 explains bailment in simple terms as the transfer or delivery of goods from one person to another for some specific use. The person delivering the good is called bailer and the person who receives it is called the Bailee. This bailment is agreed upon a contract that the Bailee, on completion of the purpose for which is goods have been delivered to him, will return or otherwise dispose that good according to the directions as mentioned by the bailer. Such a type of contract is known as the contract of bailment. The legal provisions of contract of bailment are as follows:
Bailment contracts are always created by a mutual agreement between the bailer and the bailee, and can be expressed or implied.
Bailment is always done for all types of movable goods except money.
Bailment is just a delivery of goods and only involves change of possession without giving ownership for the contract time.
The purpose for which goods are delivered should be definite and be clearly mentioned in the contract.
Share capital can be explained as all the funds that a company raises in exchange of company’s common or preferred stock of shares (Companies Act, 2013).
Contract of bailment is transfer or delivery of goods from one person to another for some specific use or purpose under a contract that, on completion of the purpose for which is goods have been delivered to the bailee, will return or otherwise dispose that good according to the directions of the bailer (Indian Contract Act, 1872).
Acceptance of deposits under Section 73 to 76 of the Companies Act, 2013 are set of rules for acceptance and invitation of deposits. It includes acceptance of deposits only by eligible companies such as public company, subject to conditions specified in the rules (Arolkar,2019).
Digital signature is an electronic form of signature to use for encryption purpose. Digital signatures are used to ensure that an electronic documents authentic.
The corporate governance in which the shareholders of the company actively vote and with collective ownership and efforts exercise their rights in response to the inefficient management of that company is called shareholder democracy (Singh& Shikha, 2019).
Arolkar, A.V (2019). Acceptance of deposits. Retrieved from: http://puneicai.org
Companies Act, 2013. Incorporation of company and matters incidental thereto. Retrieved from: http://www.mca.gov.in
Companies Act, 2013. Prospectus and allotment of securities. Retrieved from: http://www.mca.gov.in
Consumer Protection Act, 1986. Commentary on Consumer Protection Act. Retrieved from: www.ncdrc.nic.in
The Copyright Act, 1957 (14 of 1957). Retrieved from: http://www.copyright.gov.in
Indian Contract Act, 1872. Contract of Bailment. Retrieved from: http://www.uputd.gov.in
Sekhar, S. (2018). Defect in Goods. Retrieved from: http://lawtimesjournal.in
Singh, S & Shikha, P. (2019). Shareholder democracy and corporate governance. Wisdom Crux Law Times Journal, 2(12), 38-43,
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