Browsing by Author "Thenmozhi B"

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    A DESCRIPTIVE STUDY ON DOCTRINE OF INDOOR MANAGEMENT
    (International Journal of Advance Research and Development, 2018-03) Judith Priya R; Subhicksha K; Thenmozhi B; Susmitha S
    In the famous case of Royal British Bank V. Turquand, the court set forth a proposition of law that later came to be called the Doctrine of Indoor Management. The doctrine states that if a person in good faith deals with the board of directors or any other representative body if a company which is, in fact, exercising the power of management and direction of its business affairs. The failure to fulfill the conditions which are required by the company’s memorandum or articles to be fulfilled before the act or transaction is affected. This rule is an exception to the rule of Constructive notice. This rule has been in place for two reasons, Firstly, to limit the burden of inquiry placed on the shoulders of the third party entering into a transaction with the company and, secondly, the third party may not have the means to ascertain whether the inner formalities of the company are carried out properly or not properly. Thus the application of the Turquand rule, or the doctrine of indoor management, is restricted to people unaware of any irregularity in the authority of the agent with whom they are contracting.
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    A DESCRIPTIVE STUDY ON DOCTRINE OF LIFTING OF CORPORATE VEIL
    (International Journal of Advance Research and Development, 2018-03) Judith Priya R; Susmitha S; Subhicksha; Thenmozhi B
    From the juristic point of view, a company is a legal person distinct from its members [Salomon v. Salomon and Co. Ltd. (1897) A.C 22]. This principle may be referred to as the ‘Veil of incorporation’. The courts, in general, consider themselves bound by this principle. The effect of this Principle is that there is a fictional veil between the company and its members. That is, the company has a corporate personality which is distinct from its members. But, in a number of circumstances, the Court will pierce the corporate veil or will ignore the corporate veil to reach the person behind the veil or to reveal the true form and character of the concerned company. The rationale behind this is probably that the law will not allow the corporate form to be misused or abused. In those circumstances in which the Court feels that the corporate form is being misused, it will rip through the corporate veil and expose its true character and nature disregarding the Salomon principal as laid down by the House of Lords. Broadly there are two types of provisions for the lifting of the Corporate Veil- Judicial Provisions and Statutory Provisions. Judicial Provisions include Fraud, Character of Company, Protection of revenue, Single Economic Entity etc. while Statutory Provisions include Reduction in membership, Misdescription of the name, the fraudulent conduct of business, Failure to refund application money, etc. This article at first introduces to the readers the concept of “Veil of incorporation", then it explains the meaning of the term-‘Lifting Of The Corporate Veil’, it then points out the Judicial as well as the Statutory provisions for Lifting of The Corporate Veil with the help of various case-laws.