Corporate Laws II Introduction There are several factors makes a company stand apart from any other part of business. A company has separate legal entity, has perpetual succession, limited liability et cetera. All these and many more factors make a company different from any other form of business.
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The topic of this project which relates to the legal status and Scope of “contributory” under the companies act demands the author to analyse elaborate and enunciate on the contributory liability and the relevance and existence contributories in a company. The term contributory refers to the liability of a person to contribute to the assets of a company. Such a liability is not of relevance when the company is a going concern, it comes into existence or become relevant only when the company ceases to be a going concern that is in the event of the company being wound up. With respect to the liability of a member in a going company that is before the liquidation of a company or before the company ceases to be a going concern the liability of a member as to contribute is measured by the contractual obligation arising from his membership in the company and in case of a company which is limited by shares the liability is measured with respect or in accordance with the amount to be paid which is limited by the memorandum of association. The project also tries to discuss the liability and the nature of liability of the contributories in the normal course when the winding up proceedings have been initiated and also in the course when the contributory dies and the legal representative of such contributory are instead made liable to fulfil the liability from the estate of the contributory. The project also discusses about the contributory liability of an insolvent member. Through this project the author has tried to analyse the relevance and the scope of the word contributory in the companies act using various case laws. Scope, Objective and Significance The main objective of this project work is to analyse and enunciate about the meaning relevance and the scope of word contributory in the companies act. The scope of the project has been restricted to the scenario which exists in India and the support of various case laws of the Indian courts has been taken in order to do justification with the topic. Knowing about the scope, relevance and meaning of the word contributory is quite significant as it directly relates to the limited liability of a company which is one of the most important feature of a company. For the same the author has relied upon various books, cases, articles (both online and off-line), and online research databases. Research Question What is the meaning of contributory in the companies act? What is the scope and relevance of contributory?
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