Coperate Law
INSTITUTE OF MANAGEMENT STUDIES AND TRAINING
CORPORATE LAW
MARKS 100
All questions are compulsory. The first five questions shall be of 16 marks each. And last questions shall be of 20 marks.
Q1 (A) How are the first directors of the company appointed?
ppointment of First Directors of the Company “First directors” mean those directors who hold office from the date of incorporation of the company. The first directors are usually named in the articles of association or are appointed by the directors. The above statement can be inferred by reading section 254 of the Companies Act, 1956 which says that in default of and subject to any regulations in the articles of a company, subscribers to the memorandum who are individuals shall be deemed to be the directors of the company, until the directors are duly appointed in accordance with section 255. The articles may adopt the provisions of Table A (Regulations for Management of a Company Limited by Shares) of Schedule I to the Companies Act, 1956 in the articles of association of the company. In that case, regulation 64 provides that the names of the first directors shall be determined in writing by the subscribers of the memorandum or a majority of them. In such a case, the subscribers must determine the names before or at the incorporation of the company and give intimation thereof to the Registrar by Form No. 32 at the time of incorporation or within 30 days thereafter. It is only, if there is no provision in the articles of association of the company regarding the appointment of first directors, the subscribers to the memorandum shall be the first directors of the company. Generally, the first directors are named in the articles. In such a case, there is no appointment. The general practice is that the promoters of the company select the first directors and name them in the articles. The Department of Company Affairs (Now, Ministry of Corporate Affairs) vide DCA’s Circular No. 1/95 14/6/94-CL-V,
CORPORATE LAW
MARKS 100
All questions are compulsory. The first five questions shall be of 16 marks each. And last questions shall be of 20 marks.
Q1 (A) How are the first directors of the company appointed?
ppointment of First Directors of the Company “First directors” mean those directors who hold office from the date of incorporation of the company. The first directors are usually named in the articles of association or are appointed by the directors. The above statement can be inferred by reading section 254 of the Companies Act, 1956 which says that in default of and subject to any regulations in the articles of a company, subscribers to the memorandum who are individuals shall be deemed to be the directors of the company, until the directors are duly appointed in accordance with section 255. The articles may adopt the provisions of Table A (Regulations for Management of a Company Limited by Shares) of Schedule I to the Companies Act, 1956 in the articles of association of the company. In that case, regulation 64 provides that the names of the first directors shall be determined in writing by the subscribers of the memorandum or a majority of them. In such a case, the subscribers must determine the names before or at the incorporation of the company and give intimation thereof to the Registrar by Form No. 32 at the time of incorporation or within 30 days thereafter. It is only, if there is no provision in the articles of association of the company regarding the appointment of first directors, the subscribers to the memorandum shall be the first directors of the company. Generally, the first directors are named in the articles. In such a case, there is no appointment. The general practice is that the promoters of the company select the first directors and name them in the articles. The Department of Company Affairs (Now, Ministry of Corporate Affairs) vide DCA’s Circular No. 1/95 14/6/94-CL-V,