Standard question on company law chapter: Membaership in a Company:- Ques: Two companies are incorporated with the same set of shareholders. Are they same or distinct under the Companies Act, 1956 ? Discuss. Ans: According to S. 34(2) of the Companies Act, 1956 the incorporation transforms a company into a body corporate capable of functioning as an institutionaliz ed entity. Thus the independent corporate personality of a company makes it the owner of its assets and the bearer of its liabilities. This is the very essence of juristic personality of a company. The law recognizes the existence of the companies irrespective of the motives, intentions, schemes or conduct of the individual shareholders and members. In Pattinson v. Bindhya Debi, it was further stressed that two companies which are incorporated with the same set of shareholders are nevertheless distinct and separate entities. Thus from above case we can conclude that even if two companies are incorporated with the same set of shareholders, they are distinct under the Companies Act, 1956.
Posted on: Mon, 03 Feb 2014 06:00:57 +0000
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