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An Act to consolidate and amend the law relating to companies and certain other associations
Introduction
Companies Act 1956 is an important piece of legislation. Empowers the Central Government to regulate the incorporate and winding of the company. Inspects the books of account and conduct special audit. Launches an inquiry into the affairs incase of violation of laws. If inspection reveals any frauds the action is initiated or it is referred to the CBI.
Definition
According to the companies Act,1956 the term company means a company formed and registered under the act or an existing company i.e. a company formed and registered under any of the previous company laws Various Amendment The companies Act (Amendment),2000 The companies Act (Amendment),2001 The companies Act (Amendment),2002 The companies Act (Amendment),2006
Memorandum of Association
It is the document that govern the relationship between the company and the outside world. It lays down the name ,the type ,the objective and the authorized capital of the company. It also mention any other business company might like to venture into sometime in the future. It is one of the imp document required to incorporate o company in U.K., Ireland, India, Pakistan and Srilanka.
Article of Association
The Issuing of Shares Valuation of Intellectual Rights The Appointments of Directors Directors Meetings Management Decisions Transferability of Shares Special Voting Rights of a Chairman The Dividend Policy Winding-Up
Director
Paid-up capital Public Deposits Transfer Of Shares Commencement of Business
Minimum 2
Minimum Rs.100,000 Restrictions on Public Deposits Restricted as per AOA Possible after obtaining Certificate Of Incorporation
Minimum 3
Minimum Rs.500,000 No Restrictions No Restrictions Possible only after Commencement of Business within 6 months of getting Certificate of Incorporation
Share Capital
Capital refers to the amount invested in the company so that it can carry on its activities. In a company, capital refers to "share capital". Different Aspects of Share Capital are: Nominal, Authorized or Registered Capital Issued Capital Subscribed Capital Called-up capital Paid-up Capital
Types of Shares
Equity Shares Preference Shares
Cumulative or Non Cumulative. Redeemable and Non Redeemable participating or non participating
Alteration of Capital
A Company limited by shares can alter the capital clause of its memorandum in any of the following ways provided that such changes is authorized by AOA of the company: Increase in share capital by issuing shares. Consolidate its share capital into shares of larger amount than its existing shares. Convert its fully paid up share into stock and viceversa. Diminishing the amount of share capital by the amount of the shares which is cancelled.
Transmission
By operation of law Requires an evidence showing the legal entitlement There is no question of consideration Stamp duty is not payable
Meeting
A meeting is a gathering of two or more people that has been convened for the purpose of achieving a common goal by sharing information. Meeting may occur face to face or virtually.
Types of Meeting
General Meeting
Statutory meeting Annual general meeting Extra-Ordinary general meeting
Management
Management in all organizational activities is the act of getting people together ,to accomplish desired goals using available resources efficiently and effectively. Management comprises planning, organizing, staffing, directing and controlling an organization. Companies affairs is managed by the Directors.
Audit
An audit is an evaluation of a person, organization, system, process, enterprise, project or product. The term most commonly refers to audits in accounting, but similar concepts also exist in project management, quality management, and energy conservation.
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