The section 27 of companies act 1956

The articles of Guarantee Company mentioned maximum number of members and the managerial committee registered more number of members. The court did not permit a member to oppose of this without showing some becoming as a member.

section 27 of companies act 1956

Private Limited Company

A private limited company owning a share capital must give in the articles. There are three rules which are mentioned in sub-clauses (a), (b) and (c).

  • Transfer shares
  • The member’s limits
  • Request to public to support any debentures or shares of the company

Any other private limited company must give in its articles, rules as given under the clauses b and c.

The act 1956 mention that the articles of a private limited company shall contain a rule preventing any supports or acceptance of deposits from persons or its directors, relatives or members. In the need of these conditions, it cannot keep its character of a private limited company and it will also be treated as a public limited company. The rules except with respect to deposits have been mentioned in the section 2(68) of the act 2013, which explains the term private limited company.

Transfer of interest in Guarantee Company

Confirmed stocks exchanges are guarantee companies and do not have any share capital. Members are provided membership cards and their interest can be changed through appointment process mentioned in their AoA. The act 1956 under section 82, the shares and the company members is called as movable property. It is also specified in the articles. A member of the stock exchange is like a guarantee company without share capital will have a benefit in that company. Once the company registration has been processed, the registrar is approved your company name.

Guarantee Company’s right to refuse transfer of member’s interest

The right of a guarantee company which will intensified by the Supreme Court to decline the transfer by a member of his interest in the company on various footing than that company is limited by shares. The guarantee company was managed with stock exchange. The existing member rights are transfer his interest to another person would ask that person’s admission to the membership of the company. This membership may keep privileges much different from normal shareholders.

Section 28 of companies act 1956

The act 1956 of section 28 relates only in the case of companies limited by shares which are registered after the beginning of the 1965 act. Mostly private limited company is been part of this section 28 other business entities which are not been executed.

The conditions does not concern to existing companies which have not approved any particular articles and have acquired only certain special articles. There is a good number of existing company, specially private limited companies.

Matters requiring condition in articles

Where in approval of any matter or exercising any power or for doing anything as the providing of exchangeable preference shares or the appointment of additional directors or an alternate director, the control is need to be given under the AoA of a company.

Option regarding articles of association of public limited company

  • The act 1956 under section 26 provides a public limited company have 3 choices on the articles of association.
  • To register complete set of AOA and except all rules of Table A
  • To register a short type of AOA is being the particular articles of the company and combining with rule A is to execute the rules of the company.
  • Not to file articles at all in that act table A will assign totally.

Articles of a private limited company

The act 1956 under section 3(1), few aspects of a private limited company are to be mentioned in its AOA. It is important for private limited company to register in its articles including the said aspects.

Removal of lacunae in articles

  1. Where the articles selected by the company do not give a complete rule of the internal affairs of the company. The question then appears how these lacunae have to be provided. Here two cases have to be determined.
  2. The company has directly eliminated the application of Table A.  The lacuna can only remove by credit to the common law.
  3. The company has not intimately eliminated the application of Table A. It has relatively adoptee their rule.

Section 29 of companies act 1956

The government in section 29 of the act 1956 says that the company AOA is not being limited by shares shall be in one of the forms in Tables C, D and E in schedule I. This plan is also a part of the statute and it is validation as any other section. Parts are tables of informations included at the end of an act.

The stipulation under section 29 of the act 1956 which defined that the clause must not be considered to stop a company. It does not mean company limited by shares, from containing any extra matters in its articles. The conditions in the model articles in schedule I in its articles which are not changeable.

The section 5(2) of the act 2013 is related to the AOA of all company registration, it may be limited by guarantee, limited by shares or unlimited. A company may contain such extra importances in its articles as may be compared important for its organization.

Form of articles of unlimited and guarantee companies

An unlimited company or a company limited by guarantee in any clauses accepted by it in inclusion to those capable in its Table C, D, E of plan I to the act 1956.

The act 2013 plan I offer model articles for included by companies other than those limited by shares in the Table as given below:

Table G: The company AOA is limited by guarantee and owning a share capital.

Table H: The company AOA is limited by guarantee and not owing a share capital.

Table I: An unlimited company AOA and owning a share capital.

Table J: An unlimited company AOA and did not owning a share capital.

In case a company limited by guarantee and owning no share capital like library, society, club an article providing control to the board of directors. The name R.Venkateshan and R.Aashish have owing a company in Bangalore A.V. National Management Institute.

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