Commercial and Mercantile Law
Commercial and Mercantile Law covers the statutes that govern business transactions and corporate life. Expect the Companies Act 2013, Negotiable Instruments Act 1881, Partnership Act 1932, Sale of Goods Act 1930, Arbitration and Conciliation Act 1996 and Insolvency and Bankruptcy Code 2016.
Companies
- Incorporation, memorandum and articles, separate legal personality, lifting the corporate veil.
- Directors' duties, board and general meetings, share capital, dividends.
- Oppression and mismanagement under ss.241-242 before the NCLT; winding up and schemes.
Negotiable instruments
- Promissory note, bill of exchange and cheque; holder in due course.
- s.138 NI Act: dishonour for insufficiency of funds or exceeding arrangement; demand notice within 30 days of information; complaint within one month of the cause of action; s.143A interim compensation up to 20%.
- Jurisdiction lies where the payee's bank branch is situated.
Partnership, sale and arbitration
- Partnership: mutual agency, sharing of profits, unlimited liability; LLP offers limited liability.
- Sale of Goods Act: conditions and warranties, caveat emptor, unpaid seller's rights.
- Arbitration: s.7 agreement, s.11 appointment, s.9 interim measures, s.34 setting aside, s.36 enforcement.
Insolvency
- IBC: financial and operational creditors, CIRP, resolution professional, committee of creditors, moratorium under s.14, liquidation.
Worked example
A draws a cheque for Rs 5 lakh to B; it is dishonoured for insufficient funds. B must send a demand notice within 30 days of receiving the bank memo, wait 15 days, and file the complaint within one month thereafter before the magistrate where B's bank branch is located.
Traps
s.138 applies only to cheques; the notice period is 30 days, not 15; the complaint period runs from the cause of action; an arbitration clause does not oust the court's s.9 jurisdiction.