Register of investments of a company not held by it in its own name [Section 49(8»).

(vi) Minute books of general meetings (Section 196).

4. Right to receive share certificate, and transfer shares as per articles. 5. Right to receive dividend when declared and bonus shares.

6. Right of pre-emption (Section 81).

7. Right to receive notices of genera] meetings together with a copy

of Directors’ Report, Auditor’s Report and Annual Accounts.

8. Right to attend general meetings and exercise voting right. to appoint proxy. to demand a poll, and to move resolutions.

9. Right to demand the convening of an extraordinary general meeting

whenever necessary (Section 169).

10. Right to participate in the appointment of directors and auditors

in the annual general meetings [Section 224, 225).

11. Right to receive statutory report [Section 165 (ii»).

12. Right to apply to the Company Law Board:

(a) in the case of company’s refusal to register the transfer of shares (Section Ill); .

(b) for rectification ofregister of members (Section Ill);

© for calling an annual general meeting, if the Board of Directors default in holding such a meeting (Section 167);

(d) for calling an e1raordinary general meeting, iffor any reason it is impracticable to call or conduct such a meeting (Section ]86);

(e) for ordering an investigation into the affairs ofthe company (Section 235);

(j) in cases of oppression and mis-management (Sections 397, 398).

13. Right to present a petition to the High Court for compulsory winding up of the company (Section 439). .

InSI)Cction of the RCl,rister of Members [Sec.1ion 163]. Sec. 163 of the Companies Act

InSI)Cction of the RCl,rister of Members [Sec.1ion 163]. Sec. 163 of the Companies Act provides that the Register of Members shall be open for

inspection to the members of the company without any fee. Such inspection can take place during business hours and subject to such reasonable

restrictions as the company may impose in tIus regard. The register, however, must remain open for inspection for at least 2 hours each day except when

it is closed under the provisions of the Companies Act. The lllcmbrrs debenture-holders and other persons may take extracts from the register 0:

members without fee or additional fee, as the case may be, and may requi;e a copy thereof which should be supplied to them within 10 days. excJudlllg

the non-working days [SectIon 163 (3) & ()j. Closing of Registcl’ of Membel”S (Section 154). A company may, . after giving not less than seven days’

previous notice by advertisement in a local daily. close the Register of Members, for a period not exceeding forty five days in a year, but not exceeding

thirty days at anyone time.

Generally the companies close the register of members and index for inspection before the annual general meeting in order to up-to-date the list of

members who are entitled to payment of dividend. The company may refuse to register the transfer or transmission of shares during the period the

legal requirements for the issue of a prospectus

The prospectus is the basis on which the prospective investors form their opinion and take decisions as to the worth and prospects of the company. The prospectus is the chief means by which the necessary capital is acquired. A prospectus is usually a circular or newspaper advertisement published by the promoters after the formation of the company to reduce the public to take share in the company. It is defined by Section 2 (36) of the Companies Act 1956 as “any document described or issued as a prospectus and includes any notice, circular, advertisement or other document inviting deposits from the public or inviting offers from the public for the subscription or purchase of any shares in or debentures of a body corporate.” In essence, therefore, a prospectus is a document which contains the terms of the issue and is also an invitation offering to the public for subscription or purchase of any of its shares or debentures. With the Amendment Act, 1974, any document inviting deposits from the public is also a prospectus. Thus, a

prospectus is an invitation to offer and not an invitation. The Offer for Sale to be Deemed Prospectus (Section 64). Even if the whole of the share capital of a company is allotted to an intermediary known as an “Issue House” (an organization whose main business is the handling of new issues) which then offers the shares to the public by means of an advertisement of its own, any document by which such an “offer for sale to public” is made shall be deemed to be a prospectus hv implication. provided it is shown: .

I. that the offer was made within 6 months after the allotment on agreement to allot to the Issue House; or

2. that at the date when the offer was made, the whole consideration to be received by the company in respect of the shares or debentures had not been received by it.

Indoor Management is also known as 'Tnrquand's Rule

The Doctrine of Indoor Management is also known as 'Tnrquand's Rule', because it had its origin in Turquand's case discussed as follows:
Ro'al British Bank Vs. TurIUand, 1856, 119 ER 886. The directors of the company issued a bond to T. They had power under the Articles to issue such bonds provided they were authorized by a resolution of the company. No such resolution was, however, passed in this case. Held, T could recover the amount of the bond from the company on the ground that he was entitled to assume that the resolution had been passed.
The rule is based upon obvious reasons of public convenience and
justice as the intimal proceedings of a company are not open to public and it will not be possible for outsiders to know them. Thus, they can presume that the company follows its intimate rules and regulations properly and they need not investigate in this regard.
.Exceptions to the Doctrine of Indoor Management. No doubt that t he Doctrine of Indoor Management is of great practical utility and has also been applied in a variety of cases involving rights and liabilities of the companies and the outsiders, yet it has the following exceptions. i.e., a
person dealing with the company cannot take the benefit of this doctrine in the following situations:

Negligence. Similarly, where the circumstances are of a suspicious nature and the person has failed to enquire into it, he shall not be entitled to protect under this Rule. Thus, in Undenvood Vs. Bank of Liverpool, the sole director of the company in this case paid into his own account cheques drawn ip favour of the company. Held, the bank was liable as it ought to have made proper enquiries before crediting tile account of the director. No Knowledge of the Articles. This rule cannot be invoked in favor of a person who did not consult the memorandum and articles and thus did not rely them. In Rama Corporation Vs. Proved Tin and General Investment CG. the plaintiff contracted with a director of the defendant company and gave him a cherub under the company's articles,but in fact was not so authorized. The plaintiff has not seen the articles.

distinction between the company and its members

The two are considered as separate legal entities and, thus,'a veil-a line of demarcation--exists between the two. This reality stems from the
characteristics of separate entity of a company, also recognised in the famous case of Salomon vs. Salomon and Co. Ltd. Due to separate entity, the
shareholders can enter into valid contract with the company, they can carryon business in competition with the company, etc. Similarly, the property of the


company is not the joint property of its shareholders. They do not have any insurable interest in it. Further, one cannot be held liable for the acts of another.
The term 'lifting of Corporate Veil' means ignoring the separate legal entity ofthe company, and looking into the realities. It is an important doctrine in the
company law according to which in certain circumstances, the separate legal entity of the company is not taken into account, and the company and its
members are treated as one person.
In other words, sometimes, it becomes necessary to find out the real persons who control the company e.g. in cases when this corporate personality
(legal entity) of the company is misused for fraudulent or improper conduct or for doing things against public policy. In such cases, the court ignores the
principle of separate entity. In other w('Irds. the corporate veil of the company is probed into and lifted up. Tllis, however, is the discretionary power of the
court, and wiII depend upon the underlying social, economic and moral factors as they operate in and through the company.