As everybody know, the formation and functioning of companies in India are governed by the Companies Act, 1956, the rules framed by the Central Government, the SEBI regulations and RBI guidelines and regulations on certain issues like inter-country transfer of shares. If we look at as to what is  company, the characteristics of company under law, the formation of company, the set-up, the meetings, the filing and annual accounts, one may say that the company law is not complicated, but, one must observe various rules and regulations. But, its not true. Not only following the rules and regulations, certain settled concepts are developed by the Courts from time to time as to how the provisions of company law are to be interpreted. I would say that the normal rules of interpretation may not have application logically while deciding company matters which are very very complicated. For example, we read winding up provisions under the Companies Act, 1956. If a company fails to meet the demand of some debt, then, under law, the debtor can file an application to the High Court seeking winding up of the comapny on the assumption that the company is not able to pay its debt. But, there exist many complications in this. The company may be really very very big and may have many shareholders. The company may be financially sound. When the company is financially sound, but, failed to pay the debt even after the demand, merely becaue the provision says that an winding up application can be filed and pursued, the courts may not order winding-up of the company. Its logical. Because, a person who has acted on behalf of the comapny might have neglected or there may be other reasons for not meeting the demand of debt. Just because of ones fault, all the shareholders of the company are not allowed to suffer and the Court will consider the interests of the shareholders primarily. Its a concept developed by the Court. There are many examples to say that the company is not that much simple as many think. The Company Law Board, when an application filed under section 397/398 of the Companies Act, will strive to settle the issue amicably considering the future of the company and the interests of the shareholders. There exist many issues to be seen while dealing with the company matters. As such, I would say that merely observing the rules and regulations governing companies may not be enough and one must study all the settled concepts of law. Seen from this angle, I would say and agree with the argument that the Company Law is complicated.




About the Author

Attorney

V.D.RAO,Advocate, Madras High Court, 23/3, Eswari Apartments, Beach Home Avenue 2nd Street, Besant Nagar, Chennai - 600 090. Mobile: +91-9884894008 Email: vdrao_attorney @ yahoo.co.in vdraoattorney @ gmail.com Will be in touch through: http://www.indiancorporatelaws.blogspo ... Read more


Related Articles


Loading


Popular Articles





CCI Pro

CCI Articles

submit article


Company
Featured 18 July 2026
Senior Manager- Finance & Accounts

apricus india

Ahmedabad

CA

View Details
Company
Featured 24 June 2026
HEAD - AUDIT AND TAXATION

A R JADHAV AND ASSOCIATES

Mumbai

CA Inter

View Details
Company
22 June 2026
Accountant

Global Image Technologies Private Limited

New Delhi

MBA

View Details
Company
11 July 2026
CA semi qualified

Vakilsearch.com

Chennai

CA Inter

View Details
Company
25 June 2026
AUDIT MANAGER

JDAS & ASSOCIATES

New Delhi

CA

View Details
Company
24 June 2026
Chartered Accountant

CA Darshita Shah & Co

Nadiad

CA

View Details
Company
ARTICLESHIP 30 June 2026
Article Assistant or Paid Assistant

VIKAS VERMA & CO

New Delhi

Others

View Details
Company
ARTICLESHIP 16 July 2026
CA Article

Pipara & Co. LLP.

Mumbai

CA Inter

View Details