The Central Government has made Securities Contracts (Regulation) Rules, 1957, in the exercise of the powers conferred by section 30 of SC(R) Act., 1956 for carrying out the purposes of that Act. The powers under the SC(R)R, 1957 are exercisable by SEBI. Contracts between members of recognised stock exchange All contracts between the members of a recognised stock exchange shall be confirmed in writing and shall be enforced in accordance with the rules and bye-laws of the stock exchange of which they are members (Rule 9). Books of account and other documents to be maintained and preserved by every member of a recognised stock exchange : (1) Every member of a recognised stock exchange shall maintain and preserve the following books of account and documents for a period of five years: (a) Register of transactions (Sauda book). (b) Clients’ ledger. (c) General ledger. (d) Journals. (e) Cash book. (f) Bank Continue reading
Business Law
Memorandum of Association of a Company
The Memorandum of Association is the charter of the company, and provides the foundation on which the structure of the company is built. It defines the scope of the company’s activities as well as its relation with the outside world. Section 2(28)of the Companies Act defines a Memorandum as “the memorandum of association of a company as originally framed or as altered from time to time in pursuance of any previous Company Laws or of this Act”. Section 13 of the Act specifies the contents of the memorandum. The importance of the Memorandum is that it lays down the ambit of the powers of the company, the area within which the company can operate and beyond which it cannot go. The purpose of the Memorandum is to enable the shareholders, creditors and those who deal with the company to know what is its permitted range of enterprise. The Memorandum of Continue reading
SEBI (Stock brokers & Sub-brokers) Regulations, 1992
In terms of regulation 2(g), ‘small investor’ means any investor buying or selling securities on a cash transaction for a market value not exceeding rupees fifty thousand in aggregate on any day as shown in a contract note issued by the stock-broker. Registration of Stock Broker A stock broker applies in the prescribed format for grant of a certificate through the stock exchange or stock exchanges, as the case may be, of which he is admitted as a member (Regulation 3). The stock exchange forwards the application form to SEBI as early as possible as but not later than thirty days from the date of its receipt. SEBI takes into account for considering the grant of a certificate all matters relating to buying, selling, or dealing in securities and in particular the following, namely, whether the stock broker: (a) is eligible to be admitted as a member of a stock Continue reading
Cheque: Definition, Features and its Types
Cheque is a very common form of negotiable instrument. If you have a savings bank account or current account in a bank, you can issue a cheque in your own name or in favor of others, thereby directing the bank to pay the specified amount to the person named in the cheque. Therefore, a cheque may be regarded as a bill of exchange; the only difference is that the bank is always the drawee in case of a cheque. The Negotiable Instruments Act, 1881 defines a cheque as a bill of exchange drawn on a specified banker and not expressed to be payable otherwise than on demand. From the above dentition it appears that a cheque is an instrument in writing, containing an unconditional order, signed by the maker, directing a specified banker to pay, on demand, a certain sum of money only to, to the order of, a certain Continue reading
Doctrine of Ultra Vires
‘Ultra’ means beyond and ‘vires’ means powers. The term ultra vires a company means that the doing of the act is beyond the legal power and authority of the company. The doctrine of ultra vires is important in defining the limits of the powers conferred on the company by its Memorandum of Association. According to this doctrine, the vires (power) of a company to enter into a contract or transaction is limited by the ambit of the Objects Clause of the Memorandum and the provisions of the Companies Act. Whatever is not permitted by the Objects Clause and the Act, is prohibited by the doctrine of ultra vires. If a company engages in any activity or enters into any contract which is ultra vires (outside the power conferred by) the Memorandum or Act, it will be null and void so far as the company is concerned and it cannot be Continue reading
Directors of a Company
A company, though a legal entity in the eyes of the law, is an artificial person, existing only in contemplation of law. It has no physical existence. It has neither soul nor a body of its own. As such, it cannot act in its own person. It can do so only through some human agency. The persons who are in charge of the management of the affairs of a company are termed as directors. They are collectively known as Board of Directors. The Companies Act defines a ‘director’ as “any person occupying the position of a director by whatever name called” [Sec.2(13)]. This is however, an inadequate definition. In the absence of a precise definition, we can only determine whether a person is a director or not a director by referring to the nature of his office and functions. According to the functions performed by him, a director may be Continue reading