Companys objects, Business Law and Ethics

Companys objects:

A company's objects are stated pursuant to the provisions of an Act of Parliament. It must therefore be deduced, for example, that a company whose object has been stated to be "gold mining" cannot engage in "fried fish" business. This is because -

(a)     Prospective investors who read the objects clause realised that the company was formed to mine gold. If they bought the company's shares they did so because they intended their money to be used in pursuance of the gold mining business. They did not give the money for any other business and the company does not have their consent to use it on any other business. If the company tries to use the money on a different venture, such as frying fish and chips, they can go to court for an injunction to restrain it from doing so.

(b)     The statutory requirement that a company must state its objects in its memorandum would be rendered purposeless if, despite having stated the objects, the company was legally entitled to embark on any other activity. To prevent this happening, the courts concluded that the statement of objects would be taken to mean that what is not stated as an object cannot be pursued, or undertaken, by the company. In other words, the statutory requirement that the objects are to be stated implies that what has not been stated as an object cannot become a legitimate activity of the company.

Posted Date: 1/12/2013 2:30:49 AM | Location : United States







Related Discussions:- Companys objects, Assignment Help, Ask Question on Companys objects, Get Answer, Expert's Help, Companys objects Discussions

Write discussion on Companys objects
Your posts are moderated
Related Questions
Contracts of Indemnity Indemnity is the undertaking about primary responsibility to see like a certain act is performed there.If a particular contractual promise such constitu

Enumerate about the short-run Phillips curve Diagrammatically the short-run Phillips curve becomes flatter under coordination as opposed to no coordination. If one country expa

Meeting is Unnecessary - meetings and resolutions: The purpose of holding general meetings with all the formality which this entails is to give to each member the opportunity

Topic: "Imagine yourself in a situation of being encouraged to inflate your expense account. Do you think your choice would be most affected by your individual moral development o

Ratification - Law of Agency and Partnership However this is the adoption or confirmation through a person of a contract previously entered in through another.  Well

In relation to the scenario below, discuss relevant ethical and legal issues that relate to decision making regarding treatment vs non-treatment.   Please note , you are

Mode of Alteration:  The alteration of capital may be made by - 1) Increasing the company's share capital by new shares of such amount as the resolution prescribes; or 2

Implementation of open method of coordination It is emphasised that OMC might contribute to the dissemination of best practice in the implementation of national development po

Normal 0 false false false EN-IN X-NONE X-NONE MicrosoftInternetExplorer4 Who are refugees

Declaration and Payment: There is no provision in the Act dealing with payment of dividends. It is therefore governed by the provisions of the company's articles, failing whic