HI FRNDs.
We have our law exam on 5th may, n as i am also prepared for it.........i have few question in mind..?? please help
Underlining important words helps u score much more marks??
Too much underlining is also not very good??
Whether to underline with pen of different colour or pencil??
i am posting a sample answer.. please help me in highlighting the important words which we should underline 2 make a gud impression infront of examiner...THANKS.
1. M/s. Honest Cycles Ltd. has received an application for transfer of 1,000 equity shares of Rs. 10 each fully paid up in favour of Mr. Balak. On scrutiny of the application form it was found that the applicant is minor. Advise the company regarding the contractual liability of a minor and whether shares can be allotted to the Balak by way of transfer.
The companies Act, 1956 does not lays down a qualification for membership. An agreement enforceable in a court of law makes important the membership.
Therefore, the contractual capacity stated by the Indian contract act, 1872 should be taken into consideration. It was held in the case of Mohri Bibi Vs. Dharmadas Ghose that sice the minor does not have contractual capacity, thus, agreement with minor will be void. Therefore, a lunatic or minor cannot enter into an agreement to become the member of the company. Further, in the case of Diwan Singh Vs. Minerva Films Ltd., the Punjab High Court held that there is no legal restriction on a minor becoming the member of a company by taking up the shares by way of transfer provided the shares are fully paid up and no obligation should be related to it.
In view of the above case, M/s. Honest Cycle Ltd. can give membership to Balak through 1000 shares, received by way of transfer in favour of Mr. Balak a minor because the shares are fully paid up and no further obligation or liability is attached to these.
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