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Memorandum of Association and AoA

Royal British Bank v. Turquand (1856) 6 E&B 327

ISSUE:

Whether the company is liable for the loan?

RULE:

The Memorandum of Association of the Company shall be lodged with the Registrar of Companies. This is available for public inspection since people engaged in business with the Company are free to inspect the document to see whether there is any limitation of powers or limitations on the business. It created a problem it deems outsiders to be aware of any limitations placed on the Company’s management. Therefore, if it was later found that there was an irregularity within the Company regarding any decision, it regards outsiders dealing with the Company to be aware of it.

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Memorandum of Association and AoA

Ashbury Rly. Carriage & Iron Company v. Riche (1875) LR 7 HL 653

ISSUE:

Whether the company can enter into a contract that is beyond the scope of the object clause in the MOA of the company?

RULE:

The Ashbury Railways case laid the foundation of the ultra vires rules and confined the acts of the company within the ambit of the object clause of the MOA. This was rendered moot to a great extent after the introduction of the changes in the Companies Act 2006 since section 17 of the Act does not mandate any company to have a MOA.

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Memorandum of Association and AoA

Lakshmanaswami Mudaliar v. L.I.C. AIR 1963 SC 1185

ISSUE:

Whether the plaintiff consented to the subletting of parts of the demised premised and if so, when and to what effect?

RULE:

The Supreme Court repealed this doctrine. The company was incorporated under the Indian Companies Act, 1882, and had a principal objective to carry life insurance business in all its branches. It was registered under Life Insurance Act.

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Memorandum of Association and AoA

V.B. Rangaraj vs V.B. Gopalakrishnan And Others AIR 1992 SC 453, 1992

ISSUE:

Whether the shareholders can among themselves enter into an agreement which is contrary to or inconsistent with the Articles of Association of the company?

RULE:

Shareholder’s Agreement is the agreement made between the shareholders of the company among themselves. This case is related to the validity of provisions of shareholder’s agreement which is in contravention to the Article of Association.

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Memorandum of Association and AoA

World Phone India Pvt. Ltd v. WPI Group Inc USA, (2013) 178 Comp Cas 173

ISSUE:

Whether the provisions of an agreement, that are not inconsistent with the act, but are also not part of the AoA, can be said to be applicable?

RULE:

The legal position is that where the AoA is silent on the existence of an affirmation vote, it will not be possible to hold that a clause in an agreement between the shareholders would be binding without being incorporated in the AOA.

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