Law: Companies Act, (VII of 1913)

Section: 271

(a) Companies Act (VII of 1913)---S: 271-Winding-up of unregistered Company-Foreign company carrying on business in Pakistan ceasing to carry on its business ­Held, can be wound-up irrespective of number of its members-Such winding-up order can be passed even if company dissolved or ceasing to exist under law under which it was incorporated. Palmer on Company Law, Vol. 1, 22nd Edn., p. 1020, para. 84-10, In re Compania Ma Rabello Sani Nicholas S. A. (1973) Ch. 75, 91 ; V, E. R. M. Chettyar Firm v. Hormasji and others I L R 8 Rang. 658 ; In re : Strauss & Co. A I R 1937 Bom. 15 and Gower on Principle of Modern Company Law, 4th Edn., p., 748 ref. (b) Companies Act (VII of 1913)- ---- S. 83-A-Directors of company-Directors are in fiduciary relation­ship with company and not with shareholders. Finn on Fiduciary Obligations, paras. 20, 23 and Pennington on Company Law, 3rd Edn., p. 527 ref. (c) Companies Act (VII of 1913)- -- S. 66-A-Rights and obligations of shareholders--Extent-Share­holders not in fiduciary relationship with Directors of Company ­Held, cannot claim accounts from Directors. A company has its independent legal and separate entity from the shareholders. The company and the members are bound to observe all the provisions of memorandum and articles which confer right and duties upon them. A shareholder by virtue of the articles is bound by the resolution of the majority and legally obliged to accept it provided it has been passed in accordance with the law and the articles. These rights are known as corporate membership rights. In contract distinction to these corporate rights there are individual rights as well which are enjoyed by every member. These rights are the rights conferred upon member by virtue of the contract with the company as contained in Article 5 and the same cannot be withdrawn or taken away except by law or with the consent of the shareholders. If such individual member's right is infringed the shareholder has a right to agitate for its protection in the Court of law. A member can sue to enforce his individual eight to which he is entitled under the Articles or the statute. To name a few, he may sue the company to enter his name in…

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