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प्रश्न
Study the following case/situation and express your opinion.
Mr. A entered into a contract with Star Limited company and as advance payment gave a cheque of ₹ 1 lac to a Director Mr. Sam. Mr. Sam is not the Managing Director. Articles state that only the MD is authorized to sign any contracts or receive any payments on behalf of the company.
- Did Mr. Sam have the authority to accept the cheque? Why?
- Can Mr. Sam’s action be called as Ultra Vires? Why?
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उत्तर
- Mr. Sam does not have the authority to accept the cheque from the outside party because Mr. Sam although a director but not a managing director of the company. As per' the provisions made in the articles only managing director has the authority to sign contracts and receive any payment.
- Mr. Sam’s action can be called ultra Vires because accepting a cheque of Rs 1 lac, by a director Mr. Sam, is an act beyond the scope and authority or power of articles of the company.
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संबंधित प्रश्न
Select the correct answer from the option given below and rewrite the sentence.
Any act done by the company beyond the powers of Memorandum is called as _______.
Select the correct answer from the option given below and rewrite the sentence.
_________ acts are void or legally ineffective.
Select the correct answer from the option given below and rewrite the sentence.
_________ clause states the amount of Authorised capital with which the company is registered.
Select the correct answer from the option given below and rewrite the sentence.
_______ is an invitation to the public to subscribe for the shares of the Company.
Match the pairs:
| Group ‘A’ | Group ‘B’ |
| a) Capital clause | 1. Details of capital structure of a company |
| b) Liability clause | 2. Used for multiple issue of shares |
| c) Acts beyond the powers of Memorandum | 3. Abridged Prospectus |
| d) Red Herring Prospectus | 4. Describes main objectives |
| e) Shelf Prospectus | 5. Used for Rights Issue |
| 6. Incomplete Prospectus | |
| 7. Ultra Vires | |
| 8. Doctrine of Indoor management | |
| 9. Extent of liability of members | |
| 10. Articles of Association |
Write a word or a term or a phrase which can substitute the following statement:
Document which states the limits within which a company has to operate.
Write a word or a term or a phrase which can substitute the following statement:
Document issued by public company inviting public to subscribe to its shares.
Write a word or a term or a phrase which can substitute the following statement:
Prospectus used for multiple issue of shares within a year.
Write a word or a term or a phrase which can substitute the following statement:
This prospectus does not contain information about the quantum of shares to be issued or the price at which shares will be issued.
State whether the following statement is True or False:
Memorandum of Association describes the nature and character of the company.
State whether the following statement is True or False:
Memorandum establishes the relationship between the Company and Members.
State whether the following statement is True or False:
Articles of Association can have provisions that contradict the Memorandum.
State whether the following statement is True or False:
Memorandum contains rules and regulations for the internal management of a company.
State whether the following statement is True or False:
Every subscriber who signs the Memorandum must also sign the Articles.
State whether the following statement is True or False:
Prospectus must be issued within 1 year from the date of tiling it with the ROC.
Complete the sentence.
Any act done by the company which goes beyond the powers of Memorandum of Association will be calledas _________
Select the correct option from the given options:
| Group A | Group B |
| ___________ | Memorandum of association. |
Explain the following term/concept.
objective clause
Study the following case/situation and express your opinion:
The object clause of Memorandum of a company stated the main object as the manufacturing of plastic chairs and tables and any other activity in furtherance of achievement of its main activity. The Board of Directors wants to now also produce TV. Serials and feels that the shareholders may give their permission.
a) Can the company with immediate effect start producing TV? Serials? Why?
b) How can the object clause of the company be altered?
Study the following case/situation and express your opinion:
A company stated in its prospectus that it has been making profits since the last 5 years. However, Mr. X. an investor found out that two years back the company had not made any profit. The prospectus was filed with the ROC on 1 st Jan 2017 and was issued to the public on 10th Feb 2018.
a) Can Mr. X state that there was a misstatement in the prospectus?
b) If found guilty which two types of liability will the company and its officers face?
c) Can the prospectus be valid for issue to the public on 10th Feb 2018?
