CASE STUDIES

1) 10 persons are the only members of a private company. All of them while travelling in a car, met
with a accident and die. Does the private company cease to exist?
2) The number of members in a public company get reduced to 6 on 10 th November 2009. The
company incurs trade debts on 11th November 2009, 2nd April 2010, 17th May 2010 and 10th June
2010. How far are the remaining members of the company liable for the debts?
3) An association of 12 members starts a banking business without being registered. 4 members
retire and thereafter a suit is instituted by one of the continuing members for the partition of
assets of the business. Is the suit valid?
4) The promoters of a company before its incorporation, enter into a contract with P to buy a plot
of land on behalf of the company. After incorporation the company refuses to buy the said plot
of land. Has P any remedy either against the promoters or against the company?
5) X ltd., company is a textile limited company, enters into contract with A ltd., an adjacent cotton
textile mill, to supply electricity from their power generation plant. After supplies have been
made for 3 months it is discovered that this activity is beyond the scope of the object clause of
the Memorandum of association of X ltd. Share holders of X ltd ratify the contract in their
general meeting. Can A ltd., which refuses to make payment on the ground that the contract is
wholly null and void be legally compelled to make payment?
6) A company issued statements containing misstatements on which action could be taken against
the company. A person purchased shares in the market relying on the prospectus and filed a suit
against the company for damages for the misstatements. Will he succeed?
7) The prospectus of the company in its offer document had stated that an application has been
made with Bangalore stock exchange for the listing of the shares post issue. On the faith of the
prospectus one Mr. A purchased the shares. Subsequently Bangalore stock exchange refused
permission for listing of the share of the company on its stock exchange. Discuss the remedies
available to Mr. A?
8) To remove a managing Director 49% members of A ltd, submitted requisition for holding extra
ordinary general meeting. The company failed to call the said meeting and hence the
requisitions held the meeting. Since the managing director did not allow the holding the meeting
at the registered office of the company, the said meeting was held at some other place and a
resolution for the removal of the managing director was passed. Examine the validity of the said
meeting and resolution passed.
9) The annual general meeting of KMP ltd was held on 30 th April 2015. The articles of association of
the company is silent regarding the quorum of the general meeting. Only 10 members were
personally present in the said meeting, out of 2,750 members of the company. The chairman
adjourned the meeting for want of quorum. Referring to the provisions of the companies act of
2013, examine the validity of the chairman’s decision?
10) A company had approximately around 100000 members. The board of directors of the company
decided to hold the general meeting of the company by issuing 14 days notice in writing.
Subsequently one of the share holder who had not receive the notice files a case to declare the
meeting null and void. Discuss the legality?