(a) In Attorney General v. Great Eastern Railway Co. the House of Lords observed that the doctrine of ultra vires as it was explained in the Ashbury case, should not be maintained.
(b) Section 13 (i) (c) of the Companies Act provides incidental objects which need not be stated in the memorandum.
(c) If incidental objects are not stated in the memorandum, they would not be allowed by the principle of reasonable construction
(d) The doctrine of indoor management operates to protect insiders against the company
Codes :
Analysis of Incorrect Statements Regarding Company Law Principles
This solution analyzes the provided statements concerning the doctrine of ultra vires, the memorandum of association, and the doctrine of indoor management to identify the incorrect ones.
Statement (a) Analysis
The statement claims that in Attorney General v. Great Eastern Railway Co., the House of Lords observed that the doctrine of ultra vires, as explained in the Ashbury case, should not be maintained. This is incorrect. While the Great Eastern Railway case did interpret the doctrine of ultra vires more liberally, allowing companies to perform acts necessary or incidental to their main business, it did not state that the strict doctrine established in Ashbury should be entirely abandoned or "not maintained." The doctrine was refined rather than discarded.
Statement (b) Analysis
The statement suggests that Section 13 (i) (c) of the Companies Act provides for incidental objects that do not need to be stated in the memorandum. This is incorrect. Section 13(1)(c) of the Companies Act mandates that the memorandum must state the objects for which the company is proposed to be incorporated and any matter considered necessary in furtherance of those objects. Incidental objects fall under the latter category and are implicitly or explicitly required to be addressed as part of the company's objectives.
Statement (c) Analysis
This statement asserts that if incidental objects are not stated in the memorandum, they would not be allowed by the principle of reasonable construction. This is incorrect. The principle of reasonable construction is precisely used to interpret the memorandum broadly and allow acts that are reasonably incidental or necessary for achieving the main objects, even if not explicitly listed. If an object is clearly incidental and necessary, reasonable construction may permit it, contrary to the statement's claim.
Statement (d) Analysis
The statement claims that the doctrine of indoor management operates to protect insiders against the company. This is factually incorrect. The doctrine of indoor management, established in Royal British Bank v. Turquand, is designed to protect outsiders who deal with the company in good faith. It presumes that the company's internal affairs have been conducted properly. Insiders, who are presumed to know the company's internal workings, are not protected by this doctrine.
Conclusion
Based on the analysis, statements (a), (b), (c), and (d) are all incorrect interpretations of the relevant legal principles and statutory provisions. Therefore, the correct option is the one stating that all these statements are incorrect.
Important Questions from Company law
Arrange the following as per sections of the Companies Act, 2013 in descending order :
A. Execution of Bills of Exchange, etc.
B. Punishment in case of repeated default
C. Annual reports on Government Companies
D. Petition for winding up
E. Functions of Company Secretary
Choose the correct answer from the options given below:
Match List I with List - II.
List - I
List - II
(A)
Producer companies
(I)
Do not necessarily require Memorandum of Association
(B)
Statutory companies
(II)
Association not for profit
(C)
Section 8 company
(III)
Formed to convert cooperative into a company
(D)
Small company
(IV)
Paid up share capital is between 50 lakh-5 crore and turnover is between 2 crore - 20 crore
Choose the correct answer from the options given below:
Red herring prospectus is a prospectus issued:
- The problem of double taxation in international transactions can be reduced by:
i. Market agreement
ii. Multilateral agreement
iii. Bilateral agreement.
iv. Trade agreement - Given below are two statements: one is labelled as Assertion A and the other is labelled as Reason R
Assertion A: Every company having net worth of rupees five hundred crores or more or turnover of rupees one thousand crore or more or a net profit of rupees five crore or more during the immediately preceding financial year shall constitute a Corporate Social Responsibility Committee (CSRC).
Reason R: The CSR Committee monitors CSR policy of the company.
In the light of the above statements, choose the most appropriate answer from the options given below
