Business Law Assignment

Name: Hardik Shah

Class: FYBMS

Roll.No:71
Q.1) Define Memorandum of Association and explain its clauses ?

Ans : Memorandum means the memorandum of association of a company

as originally framed or as altered from time to time. The memorandum of
association is a compulsory document which mainly governs the company’s
external affairs. It represents the company to the outside world, stating its
capital structure, its powers and its objects. The document submitted to the
registrar of companies must be signed by at least two subscribers from
amongst the company’s first shareholders. Every memorandum must
contain the following clauses:

Name clause : The memorandum of a company shall state the name of the
company with last word “Limited” in the case of public limited company or
the last words “Private Limited” in the case of private limited company.
Company registered with charitable, etc objects under section 8 is exempted
from user of the words “Limited” or “Private Limited” [sec.4(1)(a)]. The
name shall not:

(i) Be identical with or resemble too nearly to the name of an existing

registered company;
(ii) Be such that its use by the company will constitute an offence
under any law for the time being in force, or is undesirable in the
opinion of central government;
(iii) A company shall not be registered with a name which contains any
word expression which is likely to give the impression that the
company is in any way connected with or having patronage of the
Central Government, any state government or any local authority ,
corporation or body constituted by central government or any state
government under any law for the time being in force or any such
word or expression, as may be prescribed , unless the previous
approval of the central government have been obtained for use of
any such word expression.
Registered office : The memorandum of a company shall state the state in
which the registered office of the company is situated.[Sec.4(1)(b)]. . It is the
place where legal documents such as writs or summonses can be served on
the company. It is also the place where particular documents and statutory
registers such as the register of members , the register of directors interests
in shares, the register of debenture holders and the register of charges held
against the company’s property are required to be kept available for
inspection. The memorandum does not state the actual address of the
registered office, but only the country within which the company is
registered. The precise location of the registered office, however, has to be
stated on all business correspondence. It is not necessary that the
registered office be the company’s main place of business and, indeed, it is
not unusual for a company’s registered office to be the address of its
accountant or lawyer.

Object clause : The memorandum of a company shall state the objects for
which the company is proposed to be incorporated and any matter
considered necessary in furtherance thereof, that is, the main objects
only.[Sec.4(1)(c)]. The statement of objects informs the investors of the
purpose for which their capital is proposed to be used by the company. It
ensures shareholders that the funds raised for one undertaking are not
going to be risked in another. The statement of bjects serves the public
interest and also prevents concentration of economic power as the
corporate activities are confined within a defined field.

The limited liability clause : This clause simply states that the liability of
the members is limited. It must be included even where the company has
permission not to use the word ‘Limited’ in its name.[Sec.4(1)(d)]

Share capital clause : The company having share capital , the amount of
share capital with which a company is to be registered and the division
thereof into shares of a fixed amount. The number of shares which the
subscribers to the memorandum agree to subscribe shall not be less than
one.

Q.2) Critically examine the term consumer under Consumer Protection

Act with illustrations, case study.
Ans : Till lately, consumer ,particularly in India, was a neglected lot. The
dominance and obstinacy of a producer, trader or businessman was felt like
a doctor piercing an injection in the body. No or very little foreign
competition allowed the manufacturer to continue the production
unscrupulously and without any innovation. Lack of consumer grievance
redressal cells and accountability made the manufacturer finally an end in
itself. He realized that though on paper he was a king, nevertheless he
remained a slave. The psychology under which the consumer in India had
buckled for decades that he had 'no choice' needed to be penetrated with an
effective dose of making him feel like a 'King' and not merely think like a
'King'.

Who is a consumer?

Section 2(d) of the CPA defines "consumer" as a person who:

"(a) Buys any goods for a consideration which has been paid or promised or
partly paid and partly promised, or under any system of deferred payment
and includes any user of such goods other than the person who buys such
goods for a consideration paid or promised or partly paid or partly
promised, or under any system of deferred payment, when such use is
made with the approval of such person, but does not include a person who
obtains such goods for resale or for any commercial purpose;

OR

(b) Hires or avails of any services for consideration which has been paid or
promised or partly paid and partly promised, or under any system of
deferred payment and includes any beneficiary of such services other than
the person who hires or avails of the services for a consideration paid or
promised, or partly paid and partly promised, or under any system of
deferred payment, when such services are availed of with the approval of
the first mentioned person but does not include a person who avails of such
services for any commercial purpose. It may, however, be noted that
"commercial purpose" does not include use by a person of goods bought
and services exclusively for the purposes of earning his livelihood by means
of self-employment."

From the above definition, it can be observed that:

The goods or services must have been purchased or hired or availed of for a
consideration which has been paid in full or in part or under a system of
deferred payment, i.e., in respect of hire-purchase transactions;

The goods purchased should not be meant for resale or for a commercial
purpose. Goods purchased by a dealer in the ordinary course of his
business and those which are in the course of his business to supply would
be deemed to be for re-sale;

In addition to the purchaser(s) of goods, or hirer(s) or user(s) of services,

any beneficiary of such services, a user of goods/services with the approval
of the purchaser or hirer or user would also be deemed to be a "consumer"
under the Act.

Case Study 1 – Synco Textiles PVT LTD vs Greaves Cotton and Co

Facts: The appellant company purchased generating sets for generating

electricity in the factory for purposes production of edible oil and cakes. Is
the appellant company a consumer ?

Findings : No, the company cannot be regarded as a consumer as any

purchase for commercial purposes for earning profit by any large
undertaking is excluded under the term consumer for purposes of
Consumer Protection Act.

Case Study 2 – Dr Vidya Jain vs Punjab National Bank

Facts : A bank wrongly closes the account when the customer issued a
cheque it was dishonoured , can the customer file a suit ?

Findings : Yes, because any failure on the part of bank to credit the amount
in the account of the customer is a deficiency in service.

Q.3) Define a trademark. What are various types of trademarks and what
are the requirements of a good trademark?

Ans: Business firms may acquire property rights known as trademarks. A

trademark is a word, mark, symbol, or device that identifies a product of a
particular manufacturer or merchant. The mark must be unique and identify
and distinguish the product. The company permits competitors to refer to
similar products by the unique trademark. A trade mark (popularly known
as brandname) in layman’s language is a visual symbol which may be a word
signature, name, device, label, numerals or combination of colours used by
one undertaking on goods or services or other articles of commerce to
distinguish it from other similar goods or services originating from a
different undertaking.

The types of trademarks are –

Associated trademarks : Where a trademark and any part thereof are

registered as separate trademarks, in the name of same proprietor, or all
trademarks are registered as a series in ne registration they shall be deemed
to be and shall be registered as associate trademarks.(Sec.16)

Certification trademarks : A mark capable of distinguishing goods and

services in connection with which it is used in course of trade which are
certified by the proprietor of the mark in respect of origin, material, mode
of manufacture of goods or performances of services , quality, accuracy or
other characteristics from goods or services is the certification
trademark[Sec.2(1)(e)].

Collective marks : A trade mark distinguishing the goods and services of

members of an association of persons which is the proprietor of the mark,
from those of others is a collective mark[Sec.2(1)(g)]. The collective mark
distinguishes the goods or services of members of an association of persons
which is the proprietor of the mark from those of others. A collective mark
shall not be registered if it is likely to deceive or cause confusion on the
part of public in particular if it is likely to be taken to be something other
than a collective mark.

The requirements of a good trademark are

It should be easy to pronounce and remember, if the mark is a word.

It should be easy to spell correctly and write legibly.
It should suggestive of the quality of goods.
It should be short.
In case of device mark – it should be described by a single mark.
It should appeal to eye as well as the ear.
It should satisfy requirements of registration.