Basic principles of company law for incorporation, prospects and Securities

Your neighbour runs a bakery in Vashi. If the bakery goes bust, the bank can chase his flat. His cousin runs the same bakery through a company, and the bank cannot touch the flat. The oven, the recipes and the shop look identical, so what changed? The Companies Act 2013 gives a registered company a separate legal life, and almost every rule in this paper grows out of that one idea. This topic sets out what a company is, what kinds exist, and when a court will look past the company to the people behind it.

In two minutes

A company is an artificial person created by registration under the Companies Act 2013; it is separate from its members (Salomon v Salomon, 1897), and the law looks behind it only for fraud, evasion and the few situations the Act itself names.

The rest of this chapter

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