2. COMPANY -DEFINITION
According to Justice Lindley defines
“an association of many persons who contribute money or
money’s worth to a common stock and employ it in some
trade or business and who share the profit arising there
from” The common stock so contributed in the form of
money is known as capital and the persons who contribute
are known as members and the portion to which each
member is entitled to is termed as shares.
3. Characteristics of the company
1. Incorporated Association
2. Artificial person
3. Separate Legal Entity
4. Separate Property
5. Transferability of Shares
6.Limited Liability
7.Perpetual Existence
8.Common Seal
9. Company may sue and be sued in its own name
4. Documents to be filed with the registrar
1. Application for availability of name
2. Memorandum of Association
3. Articles of Association
4. Copy of proposed agreement
5. Statement on nominal capital
6. Address of the registered office
7. List of directors and their consent
8. Undertaking to take up qualification shares
9. Statutory declaration
5. Kinds of company
Companies can be classified into three
categories
1.On the basis of incorporation
a)Chartered companies
b)Statutory companies
c)Registered companies
6. 2. On the basis of liability
a)Company Limited by Shares
b)Company Limited by Guarantee
c)Unlimited Company
7. 3.On the basis of control
a)Small Companies
b)Government Company
c)Foreign Company
d)Holding Company and Subsidiary Companies
e)Dormant company
8. 1.On the basis of incorporation
a)Chartered companies
Companies created by the grant of the charter by the
crown like East India Company, Chartered Bank etc.
(Now such companies can’t be incorporated in India)
b)Statutory companies
Companies established under a special act of
Parliament or State Legislative like LIC, RBI, UTI etc.
(These are basically body corporate or public financial
institutions)
9. c)Registered companies
Companies registered under the Companies Act, 2013 or previous
companies laws
1.Private Company: Private company means a company having a
minimum paid-up share capital of One Lakh Rupees or such higher
paid-up share capital as may be prescribed and
restricts the right to transfer its shares;
except in case of One Person Company, limits the number of its
members to two hundred;
prohibits any invitation to the public to subscribe for any securities of
the company
2.Public Company: Public company means a company which—
is not a private company; and
has a minimum paid-up share capital of five lakh rupees or such higher
paid-up capital, as may be prescribed
10. 3.One Person Company The concept of One Person
Company (OPC) is first time introduced in Companies
Act, 2013. OPC is introduced to encourage individuals
for doing business in company form with limited risk
and limited liability.
According to Section 2(62), one person company
means a private company which has only one
person as a member.
11. 2. On the basis of liability
a)Company Limited by Shares:
According to Section 2(22) of Companies Act, 2013 , Company
limited by shares means a company having the liability of its
members limited by the memorandum, to the amount, unpaid
on the shares respectively held by them.
members are liable to pay only to the company (not to any
creditor of the company) and
members are liable to pay only for the shares they have taken
(not for any other liability of the company).
company can demand
all the money at the time of issue of shares or
some money at the time of issue of shares and rest in installments
members are liable to pay even if company goes into winding up
process (liquidation)
12. b)Company Limited by Guarantee
According to Section 2(21) of Companies Act, 2013 , Company
limited by guarantee means a company having the liability of
its members limited by the memorandum to such amount as
the members may respectively undertake to contribute to the
assets of the company in the event of its being wound up;
members are liable to pay only to the company (not to any
creditor of the company) and
members are liable to pay only the amount of guarantee as
per MOA of Company (not for any other liability of the
company).
members are liable to pay only in the event of company being
wound up
13. c. Unlimited Company
A company where the liability of members is unlimited
(i.e there is no limit on the liability of members). The
members of such companies pay company’s losses
from their personal property.
14. 3.On the basis of control
Depending upon their control, a registered company (private
company, public company or OPC) may also be classified as:
a)Small Companies: small company’’ means a company, other
than a public company,—
(i) paid-up share capital of which does not exceed fifty lakh
rupees or such
higher amount as may be prescribed which shall not be more
than five crore rupees; or
(ii) turnover of which as per its last profit and loss account does
not
exceed two crore rupees or such higher amount as may be
prescribed which shall
not be more than twenty crore rupees:
15. b)Government Company A Government company
means any company in which not less than 51% of the
paid up share capital is held by
a)the central government, or
b) any state government or governments or
c) partly by the central government and partly by one or
more state governments.
c)Foreign Company :A company which is incorporated
outside India and has a place of business in India
16. d)Holding Company and Subsidiary Companies
a Subsidiary company,in relation to any other company
means a company in which:
i)the holding company controls the composition of the
Board of Directors.
ii)t he holding company exercise or control more than
half of the total share capital either at its own or together
with one or more of its subsidiary companies.
e)Dormant company Where a company is formed and
registered under 2013 Act for a future project or to hold
an asset or intellectual property and has no significant
accounting transaction, such a company or an inactive
company
