Corporate personality

Section 3(1) of the Companies Act, 1956 defines a company as: (i) a "company" means a company formed and registered under this Act or an existing company as defined in clause (ii).

Name of a company:

One of the important aspects of corporate personality is that the body incorporate has a name of its own that it uses for carrying on its business and day to day affairs. Further, it can sue and be sued under its name.  A company has a right to protect the goodwill associated with its name.

Section 20 provides that: (1) No company shall be registered by a name which, in the opinion of the Central Government, is undesirable.

(2) Without prejudice to the generality of the foregoing power, a name which is identical with, or too nearly resembles,-

(i) The name by which a company in existence has been previously registered, or

(ii) a registered trade mark, or a trade mark which is subject of an application for registration, of any other person under the Trade Marks Act, 1999, may be deemed to be undesirable by the Central Government within the meaning of sub-section (1).

(3) The Central Government may, before deeming a name as undesirable under clause (ii) of sub-section (2), consult the Registrar of Trade Marks.

Nature of corporate form:

A company incorporated has a legal personality. The various advantages and disadvantages associate with its personality are as follows:

A company has the following advantages:

(1)    Independent corporate existence (Section 34)- a company has a distinct legal persona capable of existing independent of its members. Section 34(2) states: From the date of incorporation mentioned in the certificate of incorporation, such of the subscribers of the memorandum and other persons, as may from time to time be members of the company, shall be a body corporate by the name contained in the memorandum, capable forthwith of exercising all the functions of an incorporated company, and having perpetual succession and a common seal, but with such liability on the part of the members to contribute to the assets of the company in the event of its being wound up as is mentioned in this Act.

In Solomon v Solomon & Co., the House of Lords observed that a company is at law a different person altogether from the subscribers of the memorandum and is not their agent or trustee.

(2)    Limited liability- where the subscribers exercise the choice of registering the company with limited liability, the member’s liability becomes limited or restricted to the nominal value of the shares taken by them or the amount guaranteed them. No member is bound to contribute anything more than the nominal value of the shares held by him.

(3)    Perpetual succession- it means that the membership of a company may keep changing from time to time, but that does not affect the company’s continuity.

(4)    Separate property- a company, being a legal person, is capable of owning, enjoying and disposing of property in its own name.

(5)    Transferable shares- Section 82 states: The shares or debentures or other interest of any member in a company shall be movable property, transferable in the manner provided by the articles of the company.

(6)    Right to sue and be sued- criminal complaint can be filed by a company but the same must be represented by a natural person. A company has a right to protect its fair name.

(7)    Professional management- a company can get the professional management of its resources and business.

(8)    Finances- the facility of borrowing and giving security by way of a floating charge is an exclusive privilege of a company. It also has the privilege of raising capital by public subscription either by way of shares or debentures. Further, public financial institutions also lend their resources more willingly to companies.

Disadvantages of corporate personality:

(1)    Lifting of corporate veil- while a company is a legal person, it acts through its members. The members act in the name of the company and the company is responsible for the acts done in its name. The corporate veil is said to be lifted when the court ignores the company and concerns itself directly with the members or managers. Grounds for lifting the veil are:-

(a)    Determination of character(enemy character)

(b)   For benefit of revenue

(c)    Fraud or improper conduct

(d)   Government companies(agents of State)

(2)    Formality and expense- the administration of a company has to be carried on strictly in accordance with the provisions of the Act.

(3)    Company is not citizen- a company is not a natural person and hence it cannot get citizenship. In State Trading Corporation of India v CTO (1964)4 SCR 99, the Supreme Court observed that a company is not a citizen.

Rights of child

The Convention on the Rights of Child defines a child as any individual below 18 years of age. The Convention, further, lays down the duty of the State parties to ensure that the ‘child’ gets the minimum necessary rights essential for his development.

The basic rights important for the growth and development of a child are as follows:-

(1)   Name and parental love and care

It is the duty of the State to register each and every birth and the child has a right to get a name upon birth itself. The name should not be derogatory in nature and it becomes the identity of the child. Every child has a right to parental love and care and no child shall be separated from his parents against his will.

(2)   Freedom from discrimination

No child shall be discriminated on the basis of the child's or his or her parent's or legal guardian's race, color, sex, language, religion, political or other opinion, national, ethnic or social origin, property, disability, birth or other status. Every child has an equal right towards the enjoyment of various public facilities.

(3)   Education

Every child has got a right to get adequate education so as to make his life worthwhile and be able to get employment. Further, every child is entitled to get vocational training as well as training to further develop his talents.

(4)   Development

Every child has a right of developing in physical, psychological, social, mental and emotional spheres.

(5)   Health and safety

Every child shall be provided with adequate measures for safeguarding his/her health and will be given necessary treatment and precautionary medication. The States shall also take measures to reduce infant and child mortality. The safety of children is also of paramount importance.

(6)   Privacy

Every child has a right to privacy that shall not be infringed by any person. They have a right of not to be disturbed at night and be allowed necessary privacy.

(7)   Protection from social, economic and sexual exploitation

Every child shall be protected from all forms of social exploitation, economic exploitation, including child labor and beggar and sexual exploitation. The State shall take necessary steps to prevent the exploitation of small children in all forms.

Position in India

The Indian Constitution under Part III lays down the fundamental rights whereby the rights of child are also protected. Article 23 expressly lays down the provisions against child labor and beggar. Further, under the chapter of Directive Principles of State Policy, the Constitution directs the State to provide for compulsory education to children.

The Child Labor (Prohibition and Regulation) Act, 1986, lays down the provisions regarding prevention of instances of child labor in India in order to prevent economic exploitation of children as well as to safeguard their health and safety.

Juvenile Justice Act, 2000, further lays down the provisions regarding the protection of children.

Right to Education Act, 2009 makes education a legal right of children

Though various legislative provisions for safeguarding the rights of children are available both at the national as well as international level, what is more important is the dissemination of knowledge about the same and strict implementation thereof.

Right to choice

Every individual has got a basic human right to marry and found a family as enshrined in the bill of rights. The recent decision of the Jaipur High Court that for a couple wanting to marry in arya samaj, they should be accompanied by their parents is a violation of the said right. The reason why couples resort to a marriage at arya samaj instead of a traditional marriage involving their families and friends is that their families are against the alliance. And the decision is a way of prohibiting them from marrying the person of their liking. Every individual has got a right to express their choice in selecting the person they want to spend the rest of their life with and by taking such a stand, the courts have denied them this right. This decision is regressive in nature and way backwards in ensuring the freedom of choice as well as gender and caste equality. While on one hand, various non government organizations, advocate groups and social activists have been trying to ensure the freedom of choice, this particular order is suffocating as well as medieval in nature.