JINDAL GLOBAL LAW SCHOOL

COURSE MANUAL

COMPANY LAW I

Semester: Fall 2023

(AY 2023-24)

COURSE INSTRUCTORS:
Animesh Anand Bordoloi

SEMESTER:

FALL 2024
(ACADEMIC YEAR 2024-25)

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 JINDAL GLOBAL LAW SCHOOL

PART I

General Information

General information on, Company Law I, offered by Jindal Global Law School in the AY
2024-25

The information provided herein is by the Course Coordinator. The following information
contains the official record of the details of the course.

This information shall form part of the University database and may be uploaded to the
KOHA Library system and catalogued and may be distributed amongst third year Law
students for B.A. LL.B. (Hons), B.B.A. LL.B. (Hons), B.Com LLB (Hons.) and second year
LL. B courses, if necessary.

Course Title: Company Law- I

Course Code: L-CT-0017

Course Duration: 15 weeks x 4 hours per week = 60 hours

Number of Credit Units: 4

Level: BA LLB, BBA LLB, B. Com LLB & LLB

Medium of Instruction: English

Pre-requisites: Law of Contracts I and II and Property Law

Pre-cursors: Nil

Equivalent courses: Nil

Exclusive courses: Nil

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PART II

A. Course Description

This course covers aspects of the law that govern the formation and operation of companies
in India. It will examine rules relating to formation of companies, their objects and powers;
their constitution; their management and governance, as well as nature and classes of shares;
raising and maintenance of share capital; and transfer of shares. To provide an analytical
framework for examination of these rules, consideration will also be given to concepts of
separate corporate personality and limited liability, the generic principal-agent problems, and
principles underlying share capital rules.

In almost all market economies, including that of India, the law of business firms recognises
and regulates five core legal characteristics of the firm. These are: (1) legal personality, (2)
limited liability, (3) transferable shares, (4) centralised management under a board structure,
and (5) shared ownership by contributors of capital.1 Consider this the skeleton of our course
– these are the broad topics that will be covered as we study how the Companies Act, 2013
(the “2013 Act”) establishes a structure for these legal features, and makes rules for
facilitating business through the corporate form.

The course will also require students to engage in discussions over the aims of the law in
regulating companies in their formation, management and financing. This will involve
examining how, among other objectives, the law tries to balance the interests of all those who
have a stake in the affairs of the company, including its shareholders, employees, creditors,
and third-parties, such as local communities.

A word about terminology; “corporate law”, “company law”, and “law of incorporation” are
synonymous. Do not get confused if texts, or your instructors, interchange these terms. They
all refer to the vast body of law that governs the life cycle of the corporation. As mentioned
above, for the purposes of this course, we will focus on the central statute governing Indian
company law – the 2013 Act. However, given that the 2013 Act is still a relatively recent
piece of legislation, we will also be relying on the relevant law applicable prior to the 2013
Act coming into force, to the extent that, it has not been changed by, or is inconsistent with,
the 2013 Act or its interpretation.

While the course is designed to familiarise students with certain fundamental aspects of
company law, it will also try to expose them to corporate advising, negotiation and drafting

1
Armour, John, Henry Hansmann and Reinier Kraakman. The Essential Elements of Corporate
Law: What is Corporate Law? – available at
http://www.law.harvard.edu/programs/olin_center/papers/pdf/Kraakman_643.pdf
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exercises so that they can formulate relevant and practical advice for the benefit of an
interested party.

B. Course Aims and Objectives

The course seeks to familiarise students with

 key features of the corporate form as a legal structure and its advantages and
disadvantages compared to other structures available, such as partnerships and limited
liability partnerships;
 the rules relating to corporate capacity and how companies relate to third parties;
 provisions regarding amendments to and interpretation of memorandum and articles;
 the various classes of shares and the rights attached to them;
 the rules relating to share issue, share transfer and the maintenance of share capital;
 provisions relating to meetings of members;
 remedies for minority shareholders; and
 issuance and transfer of shares, and mechanisms for raising equity funding by
companies.

C. Intended Learning Outcomes

Intended Learning Teaching and Learning Assessment

Outcomes and Weightage Activities Tasks/Activities

By the end of the course,

students should be able to:

(i) Have a sound 60 (i) Lectures: Students’ ability to grasp

understanding of the % and critically evaluate the
fundamental principles -- Students will be introduced to topics/issues discussed in
of company law, the basic principles of company the syllabus will be tested
provisions of the 2013 law and the various issues that in the following ways:
Act and related are associated with this practice
statutes. area. (i) End-semester
examination (50%).
(ii) Comprehend how 30 -- Students will acquire the
the rules and principles % ability to critically analyse, (ii) Internal assessment

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 JINDAL GLOBAL LAW SCHOOL

laid out in the 2013 Act discuss and present their (50%).
apply in corporate arguments on the concepts learnt
practice and courts. through class discussion and Each Course Instructor
participation. will inform the students
(iii) Apply: 10 separately as to the
% (ii) Reading of statutes, case laws methods by which the
(a) the principles learnt other materials: students will be assessed
in context of advising internally.
clients and in drafting -- Students will acquire
key corporate knowledge of the principles of
documents, and/or company law pertaining to the
topics to be covered in the
(b) the knowledge of syllabus.
company law to legal
problems and suggest (iii) Tutorials:
solutions thereto.
-- Students will be presented with
fact patterns/legal problems
and/or drafting and negotiation
exercises relating to the topics
being discussed in class. This
will help the students in applying
the principles learnt and honing
their advisory and drafting skills;

-- Students will research,

scrutinize, analyse and evaluate
current issues in the area of
company law and write short
papers addressing those issues.

D. Grading of Student Achievement

To pass this course, students must obtain a minimum of 40% in the cumulative aspects of
coursework, for example, moot, and final examination. End of semester exam will carry 50
marks out of which students have to obtain a minimum of 15 marks to fulfil the
requirement of passing the course.

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The details of the grades as well as the criteria for awarding such grades are provided
below.

PERCENTAGE GRADE
GRADE GRADE DESCRIPTION
OF MARKS VALUE
Outstanding – Exceptional knowledge of
the subject matter, thorough understanding
80 and above O 8 of issues; ability to synthesize ideas, rules
and principles and extraordinary critical
and analytical ability
Excellent - Sound knowledge of the
subject matter, thorough understanding of
75 – 79 A+ 7.5
issues; ability to synthesize ideas, rules and
principles and critical and analytical ability
Very Good - Sound knowledge of the
subject matter, excellent organizational
capacity, ability to synthesize ideas, rules
70 – 74 A 7
and principles, critically analyze existing
materials and originality in thinking and
presentation
Good - Good understanding of the subject
matter, ability to identify issues and
65 – 69 A- 6
provide balanced solutions to problems and
good critical and analytical skills
Fair – Average understanding of the
subject matter, limited ability to identify
60 – 64 B+ 5
issues and provide solutions to problems
and reasonable critical and analytical skills
Acceptable - Adequate knowledge of the
subject matter to go to the next level of
55 – 59 B 4
study and reasonable critical and analytical
skills.
Marginal - Limited knowledge of the
subject matter and irrelevant use of
50 – 54 B- 3
materials and, poor critical and analytical
skills
Pass 1 – Pass with basic understanding of
45 – 49 P1 2
the subject matter
Pass 2 – Pass with rudimentary
40 – 44 P2 1
understanding of the subject matter
Below 40 F 0 Fail - Poor comprehension of the subject

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PERCENTAGE GRADE
GRADE GRADE DESCRIPTION
OF MARKS VALUE
matter; poor critical and analytical skills
and marginal use of the relevant materials.
Will require repeating the course
When the student has not appeared in the
examination. If an "Ab" grade is assigned,
Absent Ab 0
it will require a resit examination and/or
repeating the course.

PART III

A. Keyword Syllabus

Process of raising capital for the company; prospectus; SEBI Guidelines; promoters and
shareholders; issuance of shares; buy-back and transfer of shares; board of directors;
piercing of corporate veil; ultra vires; indoor management; articles of association;
memorandum of association; ordinary shares; preference shares; due diligence; rights
issue; initial public offering; private placement; transfer of shares and rights; pre-emptive
rights; Takeover Code; majority powers and minority protection.

B. Course/Class Policies

Laptop Policy

Students may be permitted to use their laptops in class for the purposes of reviewing reading
materials and taking notes. Under no circumstances should laptops be used in class to access
email, social or other networking websites or use instant messaging software. A violation of
this policy will result disciplinary action which may include the entire forfeiting this
permission for the remainder of the semester. The instructors may withdraw this permission
at any time.

Cellphone policy

Students must keep their cellphones on switched off/ flight mode. Any student found using a
cellphone while class is ongoing will be liable to face disciplinary action.

Punctuality

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Tardiness will not be tolerated. Failure to appear in class on time will result in the student
being marked absent.
Internal Assessment Pattern

This would include but is not limited to class tests, case presentations, research papers, quiz,
etc.

ACADEMIC INTEGRITY AND PLAGIARISM

Learning and knowledge production of any kind is a collaborative process. Collaboration

demands an ethical responsibility to acknowledge who we have learnt from, what we have
learned, and how reading and learning from others have helped us shape our own ideas. Even our
own ideas demand an acknowledgement of the sources and processes through which those ideas
have emerged. Thus, all ideas must be supported by citations. All ideas borrowed from articles,
books, journals, magazines, case laws, statutes, photographs, films, paintings, etc., in print or
online, must be credited with the original source. If the source or inspiration of your idea is a
friend, a casual chat, something that you overheard, or heard being discussed at a conference or
in class, even they must be duly credited. If you paraphrase or directly quote from a web source
in the examination, presentation or essays, the source must be acknowledged. The university has
a framework to deal with cases of plagiarism. All form of plagiarism will be taken seriously by
the University and prescribed sanctions will be imposed on those who commit plagiarism.

DISABILITY SUPPORT AND ACCOMMODATION REQUIREMENTS

JGU endeavours to make all its courses accessible to students. In accordance with the Rights of
Persons with Disabilities Act (2016), the JGU Disability Support Committee (DSC) has
identified conditions that could hinder a student’s overall well-being. These include physical and
mobility related difficulties, visual and hearing impairment, mental health conditions and
intellectual/learning difficulties e.g., dyslexia, dyscalculia. Students with any known disability
needing academic and other support are required to register with the Disability Support
Committee (DSC) by following the procedure specified at https://jgu.edu.in/disability-
support-committee/

Students who need support may register any time during the semester up until a month before the
end semester examination begins. Those students who wish to continue receiving support from
the previous semester, must re-register within the first month of a semester. Last minute
registrations and support might not be possible as sufficient time is required to make the
arrangements for support.

The DSC maintains strict confidentiality about the identity of the student and the nature of their
disability and the same is requested from faculty members and staff as well. The DSC takes a

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strong stance against in-class and out-of-class references made about a student’s disability
without their consent and disrespectful comments referring to a student’s disability.

All general queries are to be addressed to disabilitysupportcommittee@jgu.edu.in

SAFE SPACE PLEDGE

This course may discuss a range of issues and events that might result in distress for some
students. Discussions in the course might also provoke strong emotional responses. To make sure
that all students collectively benefit from the course, and do not feel disturbed due to either the
content of the course or the conduct of the discussions. Therefore, it is incumbent upon all within
the classroom to pledge to maintain respect towards our peers. This does not mean that you need
to feel restrained about what you feel and what you want to say. Conversely, this is about
creating a safe space where everyone can speak and learn without inhibitions and fear. This
responsibility lies not only with students, but also with the instructor.

P.S. The course instructor, as part of introducing the course manual, will discuss the scope of the
Safe Space Pledge with the class.

Students are welcome to purchase and use any of the textbooks mentioned below.

(i) Textbooks:
 Avtar Singh, Company Law, 17th Edition, 2018 (Eastern Book Company)
 A. Ramaiya, Guide to The Companies Act, 18th Edition, 2015 (Wadhwa Book
Company)
 Gower’s Principles of Modern Company Law, 10 th Edition 2016, by Paul L.
Davies and Sarah Worthington (Sweet and Maxwell)
 M.C. Bhandari, Guide To Company Law Procedures, 24 th Edition, 2018
(Lexis Nexis)
 Pennington’s Company Law, 8th Edition, 2001 (Butterworths).
 Company Law and Practice: A Comprehensive Text Book on Companies Act
2013, 23rd Edition July 2018, by Dr. G.K. Kapoor and Dr. Sanjay Dhamija
(Taxmann)

(ii) Key Statutes:

 Companies Act, 2013
 Reference to Companies Act, 1956 and relevant SEBI Regulations shall be
made only if necessary.

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PART IV
WEEKLY COURSE OUTLINE AND READINGS

Wee Topic Essential Reading Supplementary Reading

k

1 Introduction to the  Sections 4-8, 28 of the Limited Liability

Corporate Form Statutes: Partnership Act, 2008
 Sections 3, 23 of the Limited Liability
- Nature of the Partnership Act, 2008
 Sections 4, 6, 13, 26-28 of the
Corporate Form  Sections 11, 25 of the Partnership Act,
Partnership Act, 1932
- Advantages and 1932
Disadvantages
Case Law:
of the Tennant v. Stanley [In re Stanley] (1906) 1 Ch.
Corporate Form Secondary Sources: 131
- Difference “What is Corporate Law’, Henry Hansmann and
Reinier Kraakman
between
Company, LLP,
Partnership &
Agency and
Sole
Proprietorship
2 Conflict of Interest Agency Problems, Legal Strategies And
of between Enforcement, John Armour, Henry Hansmann,
Reinier Kraakman
- owners/managers;
-
majority/minority;
-
company/creditors
& employees

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 JINDAL GLOBAL LAW SCHOOL

Wee Topic Essential Reading Supplementary Reading

k

3 Corporate Case Law:  Sudhir Gopi v. Indira Gandhi National

Personality and  Salomon v. Salomon [1897] A.C. 22 Open University and Ors 16 May 2017
Lifting of  In Re: The Kondoli Tea Co. Ltd. (1886)  Balwant Rai Saluja v Air India Limited
Corporate Veil ILR 13 Cal. 43 (2014) 9 SCC 407
 In re Dishaw Maneckjee Petit AIR 1927  Lee v. Lee Air Farming Limited [1960]
Bom 371 UKPC 33
 Daimler Co. Ltd v. Continental Tyre &  LIC v. Escots Limited 1986 1 SCJ 38
Rubber Co. Ltd. (1916) 2 AC307
 Macaura v. Northern Assurance Company
(1925) AC 619
 Prest v. Petrodel Resources Limited [2013]
UKSC 34
 Vodafone International Holdings BV v.
Union of India (2012) 6 SCC 613
(excerpts)
 State of Rajasthan v. Gotan Lime Stone
Khanji Udyog Pvt. Ltd
 State of U.P. & Ors v. Renusagar Power
Co. & Ors. (1988) 4 SCC 59

Secondary Sources:
Corporate Personality in India, Arjya B. Majumdar

4 Incorporation of a Statutes:
Company  Section 3, 7-11 of the Companies Act,
Pre-incorporation 2013
contracts  Sections 15, 19 of the Specific Relief Act

Case Law:

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Wee Topic Essential Reading Supplementary Reading

k

 Kelner v. Baxter, (1866) LR 2 CP 174

 Erlanger v. New Sombrero Phosphate Co.,
(1878) 3 App Cas 1218
 Gluckstein v. Barnes, [1900] AC 240
 Weavers Mills v. Balkis Ammal, AIR 1969
Mad 462

5&6 Memorandum of
Association & Statutes: Section 111A of the Companies Act, 1956 and
Articles of Section 4-6, 13 – 16 of the Companies Act, 2013 Proviso to Section 58(2) of the Companies Act,
Association 2013
Case Law:
- Doctrine of  Royal British Bank v. Turquand (1856) 6  MRF Ltd. v. Manohar Parrikar, Civil
Ultra Vires E&B 327 Appeal No.4220 of 2002
- Doctrine of  Ashbury Rly. Carriage & Iron Company v.  Re: Akola Electric Supply Co. Pvt. Ltd.
Constructive Riche (1875) LR 7 HL 653 (1962) 32 Com Cases 215
Notice  Lakshmanaswami Mudaliar v. L.I.C. AIR  H. Fillunger and Company Private
- Indoor 1963 SC 1185 (excerpts) Limited Pune v. Ajit Arvind., 2017
management  V.B. Rangaraj vs V.B. Gopalakrishnan Indlaw MUM 1208
Articles of And Others AIR 1992 SC 453, 1992  Vodafone International Holdings BV v.
Association  World Phone India Pvt. Ltd v. WPI Group Union of India and Anr. (2012) 6 SCC
- Conflict Inc USA, (2013) 178 Comp Cas 173 613 [261-268]
between
Articles of
Association and
Shareholders’
Agreement
- Difference
between Public
Company and

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Wee Topic Essential Reading Supplementary Reading

k

Private
Company
Amendment of
Memorandum &
Articles of
Association

7 Shares Sections 43 to 55 of the Companies Act, 2013

- Shares as
Property
- Preference and
Equity Shares
- Rights of
Shareholders
- Convertible
Securities
- Voting Rights,
Differential
Voting Rights
8&9 Issue of Capital Arjya B. Majumdar, “Regulatory Framework  Global Legal Insights – Mergers and
(Private Placement) Governing M&A in India” in Christopher Acquisitions 2016 (India Chapter):
- Process Kummer, Franz Ferdinand Eiffe and Wolfgang https://www.globallegalinsights.com/
- Due diligence Molzer, Guide to Mergers and Acquisitions, practice-areas/mergers-and-
- Negotiation (LexisNexis: New Delhi, 2013) acquisitions/global-legal-insights---
- Investor mergers-and-acquisitions-6th-ed./india
Protection
through Afra Afsharipour, The Indian Private
Shareholder Equity Model, NSE Working Paper
Agreements
- Private

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Wee Topic Essential Reading Supplementary Reading

k

Investment in 8/2013
Equity of
Companies Statutes/Regulations:
Section 23 to 41 of the Companies Act 2013

Case Law:
(Public Issue)  Sahara India Real Estate Corporation
- Private Limited & Ors v. Securities and Exchange
 IPO Mechanisms in India: A Brief Note,
Placement v. Board of India
by Amit Bubna and Nagarpurnanand
Public Issue http://supremecourtofindia.nic.in/outtoday/
Prabhala (2015)
- Initial Public CA9813%20Sahara%20combined.pdf
https://www.nseindia.com/research/
Offering  Peek v. Gurney (1873) LR 6 (HL) 377
Listing  Derry v. Peek (1889) LR 14 AC 337 content/nse_nyu/NSE_NYU_12-
Requirement  Sundaram Finance Service & Ltd. v. 13WPCh-4.pdf
Grandtrust Finance Ltd. (2003) 42 SCL 89
(Mad)
 Shiromani Sugar Mills Ltd v. Debi Prasad,  Anchor Investors in IPOs: a working
AIR 1950 All 508 paper produced as part of the NSE-NYU
 Securities Exchange Board of India vs M/S Stern School of Business Initiative for
Opee Stock-Link Ltd.& Anr, SC 2016, Civil the Study of Indian Capital Markets, by
Appeal No. 2252 of 2010 Amit Bubna and Nagarpurnanand
 DLF Limited v. SEBI (SAT Order in Prabhala (2015)
Appeal No. 331 of 2014)

Secondary Sources:  SEBI (Issue of Capital and Disclosure

 Global Legal Insights – Initial Public Requirements) Regulations 2018
Offerings 2024 (India Chapter):
https://www.globallegalinsights.com/practi
ce-areas/initial-public-offerings-laws-and-
regulations/

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 JINDAL GLOBAL LAW SCHOOL

Wee Topic Essential Reading Supplementary Reading

k

10 Issue of Shares Statutes/Regulations:

- Rights issue  Sections 23, 42, 54 and 62, 63 of the
- Bonus Issue Companies Act, 2013
- Sweat Equity  Companies (Prospectus and Allotment of
- Employee Securities) Rules, 2014
Stock Option Case Law:
Schemes Needle Industries (India) Ltd. v. Needle Industries
Newey (India) Holding Ltd. and Ors., AIR 1981
SC 1298

11 & Transfer of Shares Statutes:

12 (Private Section 56 of the Companies Act 2013
Companies) Section 58 of the Companies Act 2013
- Statutory
Requirements
- Pre-emptive Case Law:
Rights on  V.B. Rangaraj vs V.B. Gopalakrishnan &
Transfer Ors., AIR 1992 SC 453, 1992
 Messer Holdings Limited v. Shyam
Madanmohan Ruia, [2010] 159 Comp.
Cas. 29 (Bombay High Court)
 Bajaj Auto Ltd vs Western Maharashtra
Development, (MANU/MH/0820/2015,
Bombay HC)
 World Phone India Pvt. Ltd v. WPI Group
Inc USA, [2013] 178 Comp Cas 173 (Del)

Secondary Sources:

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 JINDAL GLOBAL LAW SCHOOL

Wee Topic Essential Reading Supplementary Reading

k

 Arjya B. Majumdar, “Regulatory

Framework Governing M&A in India” in
Christopher Kummer, Franz Ferdinand
Eiffe and Wolfgang Molzer, Guide to
Mergers and Acquisitions, (LexisNexis:
New Delhi, 2013)

(Public Listed
Companies) Securities and Exchange Board of India
Takeover Code
(Substantial Acquisition of Shares and
2011
Takeovers) Regulations, 2011

 Securities and Exchange Board of India

(Issue of Capital and Disclosure
Requirements) Regulations, 2018

13 Reduction of Sections 67 to 70 of the Companies Act, 2013  SEBI (Delisting of Equity Shares)
Capital and Regulations 2021
Buyback  Rule 16 and 17 of the Companies (Share
Capital and Debenture) Rules, 2014

14 Shareholder Statutes:
Meetings Sections 96 to 118 of the Companies Act, 2013

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Wee Topic Essential Reading Supplementary Reading

k

- Pre-requisites Case Law:

of a valid  LIC of India v. Escorts Ltd., [1986] 59
meeting Comp Cas 548
- Notice and  Chandrakant Khare v. Shantaram Kale,
(1989) 65 Comp Cas 121 SC
quorum
 M.S. Madhusoodan v. Kerela Kaumudi
- Voting (P.) Ltd., (2003) 46 SCL 695 (SC)
- Resolutions and
Minutes
15 Review

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