Legal Question in Business Law in India

a. Tuff Ltd. is a public limited company, which was registered in the year 1991 under the Companies Act, 1956. After eighteen years of existence as a public company, the said company now wants to convert itself into a private limited company. Is it possible ? If yes, explain the legal requirements, if any With the approval of the Board, an amount of Rs.50 crore was spent by Speed Jet Ltd., in producing a commercial film, not covered under its objects clause. The film was a complete flop and the company lost an amount of Rs.40 crore. Some of the members of the company objected to such investments not covered by the objects clause of the company. They filed a suit in the court of law making the directors personally responsible and to make good the loss. Will they succeed ? Support your answer with reasons.


Asked on 1/31/13, 1:31 am

4 Answers from Attorneys
Jayesh Desai Jayesh Desai

You need to consult a lawyer - the query as framed is more like a question in law exam.

Read more
Answered on 1/31/13, 2:54 am
Fca Prashant Chavan Expert Edge LLP

31.01.2013

Dear Sir / Madam,

1. Please provide the nature of relationship between Tuff Limited and Speed Jet Limited -whether parent-subsidiary / Companies under the same Management etc.

2. One of the following options may be exercised in the business re-organization process :

a). Demerger or;

b). Conversion of a private company or an unlisted public company into a limited liability partnership (LLP) consequent to the Limited Liability Partnership Act 2008 and notification of the Limited Liability Partnership Rules w.e.f 01.04.2009, the Finance No. 2 Act, 2009;

c). Buy Back of Shares pursuant to the provisions of Section 77A of the Companies Act subject to certain conditions.

3. Approval of Company funds for activities beyond the Objects Clause of the Company without the specific sanction of the members passing a special resolution, makes the concerned Directors of Speed Jet Limited liable to compensate and make good the loss.

Please provide more facts on points (1) and (3) at [email protected] along with this query and my answer for further on-line advice.

Regards,

Read more
Answered on 1/31/13, 4:20 am
uttam Tibrewal

dear client....

Need the details and the copy of case thats in court...

if possible send me at [email protected]

with regards.

uttam

Read more
Answered on 2/04/13, 12:22 am


Related Questions & Answers

More Business Law questions and answers in India