MARKET

STRUCTURE

Introduction
Legitimate Corporate Power - Exempt those exercising it from liability
Control group - Controlling SHs & investment bankers
Great Depression 1929 1939 (GDP fell by 15%) -Wall Street Crash of
1929, also known as Black Tuesday
Recession Dec. 2007 - June 2009 (Financial crisis / subprime mortgage
Corporate Governance - Corporate Fraud & Crimes - SarbanesOxley Act
of 2002
India
Corporate Espionage ?
1

E.g. from beyond the boundaries

Satyam Computer

Enron scandal (Per Share US $

90.75 (mid-2000) - $1 Nov. 2001

Saradha Group

Sahara Group

Cement
Penalty

Bhopal Gas Tragedy

Harshad Mehta & Ketan Parekh

2G Spectrum Case

WorldCom $3.8 billion

Washington Mutual

Madoff investment scandal

(Ponzi Scheme)

Rajat Gupta & Raj Ratnam

BP Oil Spill ($18.7 billion)

Cartels

6000

Crore

PLAYERs

REGULATORS

 Crowd Funding?

REGULATOR
S

One Person
Company

Limited Liability
Partnership

Producer
Companies

Business Registration Procedures

COMPANY FORMATION

START
Obtaining approval for the proposed name of the Co. from
the ROC
Drawing up the Memorandum of Association

Drawing up the Articles of Association

Getting the appropriate persons to subscribe to the Memorandum
(a minimum of 7 for a Public Company & 2 for a Private Company)

Payment of Registration Fee to the ROC

Obtain a certificate of commencement of business from the
ROC in case of a PLC.

Nicholas Murray,
President, Columbia University (1911)

I weigh my words when I say that in my

judgment the limited liability corporation
is the greatest single discovery of modern
times ....Even steam and electricity are far
less important than the limited liability
corporation, and they would be reduced to
comparative impotence without it.
Quoted in William P. Hackney & Tracey G. Benson,
Shareholder Liability for Inadequate Capital, 43 U. PI-r. L.
REV. 837, 841 (1982)

COMPANY
Is an association of persons
Either human beings or legal persons, or
both
(Juristic Personality Persona Juridica)
Formed to conduct business or other
activities
In the name of the association
Incorporated by registration U/T Cos Act.
Also called Corporation - Meaning a
Company or any other body incorporated
under law (& not Municipal Corporation).

Co.
comes
into
existence
by
incorporation.
To incorporate
Means to form into a legal corporation or
to become a corporation,
Incorporation
Is the act of forming a legal corporation.
It denotes the formation of an association that
has a corporate personality A personality distinct from those of its
members.

Blacks Law Dictionary

Corporation is An entity (usually a business)
having authority under law to act as single
person distinct from the shareholders who own
it &
Having rights to issue stock & exist indefinitely;
a group or succession of persons established in
accordance with legal rules into a legal or
juristic person that has legal personality distinct
from the natural persons who make it up, exists
indefinitely apart from them, & has the legal
powers that its constitution gives.

Corpus Juris Secundum

A corporation is a collection of natural persons joined together by their voluntary
action or by legal compulsion, by or under the authority of an Act
of the Legislature,
Consisting either of a special character or of a general permissive
statute,
To accomplish some purposes, pecuniary, ideal, or governmental
Authorized by the charter or governing statute, under a scheme
or organization and
By methods thereby prescribed or permitted with the faculty
Of having a continuous succession during the period prescribed
by the Legislature for its existence,
Of having a corporate name by which it may make and take
contracts, and sue and be sued, and
with the faculty of acting as a unit in respect of all matters within
the scope of the purpose for which it is created.

The Shorter Oxford English Directory

A Company is a body corporate.

Expression body corporate is of wide
connotation.
It includes a Co. incorporated in India as well as
outside India as well as any other body or
association of persons incorporated under some
statute.
Body corporate means an artificial person
created by law; a corporation.
Corporation means a body corporate legally
authorised to act as a single individual; an
artificial person created by royal charter,
prescription, or legislative act, & having the
capacity of perpetual succession

Som Prakash Rekhi v Union of India AIR 1981 SC 212

Corporate personality is a reality & not an

illusion or fictitious construction of the law.
It is a legal person. Indeed, a legal person is
any subject-matter other than a human being to
which the law attributes personality.
Corporations are one species of legal persons
invented by the law & invested with a variety of
attributes so as to achieve certain purposes
sanctioned by the law. For those purposes, a
Corp./Co. has a legal existence all its own.

Emergence new approach to

Transnational Corporate Governance
Rise of activist litigation against the parent Cos of
multinational enterprises (MNEs) for the actions of
overseas subsidiaries; the new framework for human
rights & business developed by the U.N. Special
Representative of the Secretary General; & the increased
role of the state as an owner, controller, & regulator of
enterprise as a result of the financial crisis & the rise of
state-owned & - controlled MNEs from newly
industrialized countries.
Development contributed to a
Reconsideration of the enhanced shareholder value
model &
Development of a more socially rooted appraisal of
the Corp. & of corporate law & governance.

Daimler Co. Ltd. v. Continental Tyre & Rubber Co. (O.B.) Ltd.
[1916] 2 A.C 307

Lord Shaw of Dunferlmines description of the

company : It is a creation of law convenient
for the purposes of management, of the holding
of property, of the association of individuals in
business transactions.
This principle is given effect by a twofold
limitation. First, the law requires companies to
state their objects on incorporation and so to
adopt themselves a restricted capaoity.ag
Secondly, the common law imposes its own
limitations upon corporate capacity.

Control Alt Delete Open Air

Mumbai (musical fest )
Bangalore

Festival

Lucia by Pawan Kumar All Girls Band Vinyl

(Rs. 50 Lakh )
Records
I am by Onir (400
people financed
Teach for India

Vasudha
Sharma
Attuned Spirits