         

Definition & Meaning Salient Features Types of Companies MoA & AoA Membership Shares & Share capital Meetings Accounts & Audit Liquidation of Company Case Study

A company formed and registered i.e. incorporated under the Companies Act, 1956 or an existing co. [Sec.3]

        

Incorporated Association Artificial person Separate Legal Entity (case study) Perpetual Succession i.e. continued existence Limited Liability Common Seal Transfer of Shares Separation of ownership from its management Capacity to Sue

Basis of incorporation (i) Statutory (ii) Registered Public Participation (i) Public (ii) Private Limitation of Liability (i) Limited Co. (ii) Unlimited Co. Country of formation (i) Domestic Co. (ii) Foreign Company

Participation Of Govt. (i) Govt. Co. (ii) Non Govt. Co. Control over Management (i) Holding co. (ii) Subsidiary Co. Listing in Stock Exchange (i) Listed (ii) Unlisted

MoA - Charter of the company and contains the powers of the company. Contents
Name Clause  Domicile Clause  Objects Clause  Liability Clause  Capital Clause

AoA

– (i) Rules & Regulation of internal Management. (ii) Contract between the company and its members.

     

Contents Business of the company Amt. of capital issued & the classes of shares Rights of each class of share holder & procedure for variation Allotment ,Calls, Forfeiture of shares Transfer of shares Companies lien on shares

     

Exercise of borrowing powers including issue of debentures. General Meeting, Notices, Quorum, Proxy, Voting, resolution, Minutes etc. Appointment, No., & Powers of Directors. Dividends- Interim & Final- General Reserve. Accounts & Audits. Keeping of books.

Criteria for membership
  

The subscriber of the memorandum of a company who shall be entered as members in it’s register of members. Who agrees in writing to become a member of a company. Every person holding equity share capital of a company and whose name is entered as beneficial owner in the records of depository.

“Every shareholder is a member but every member need not be a shareholder”

Share-”Share in the share capital of a company and includes stock except where a distinction between stock and share is expressed or implied” [Sec. 2 (46)]

Types of shares(1) Equity (2) Preferential

Under Companies Act, a meeting means a gathering of two or more persons, convened in accordance with the provisions of the act and the articles of the company, for transacting some lawful business.

Requisite of a valid general meeting
Meeting must be properly called – Proper authority & Proper Notice (ii) Must be properly convened – Proper Quorum & Proper Chairman (iii) Must be properly conducted – Business must be validly transacted i.e. resolutions must be properly moved & passed, and voting by show of hands & Proper minutes must be prepared.
(i)

Meetings of members (i) Statutory meeting (ii) AGM (iii) EGM  Meetings of Directors (i) Meetings of BoD (ii) Meetings of committees of Board  Other Meeting (i) Meeting of debenture holders (ii) Meeting of creditors

 Maintenance

of Accounts as per AS prescribed by ICAI.  Form of Bal. Sheet & P/L as per Schedule VI of the Companies Act,1956.  3 copies of B/S and P/L A/c within 30 days from the date of AGM to Registrar.

 

1st auditor(s) by BOD within 1month of incorporation. Qualification of Auditors:- Must be a CA.

Can’t be an auditor:
Body Corporate (ii) Officer or Employee of the org. (iii) A person who owes the Company more than Rs.1000. (iv) A person holding any security carrying voting rights of the company. (v) A person who is disqualified for appointment as auditor in any subsidiary or holding company.
(i)

Right of free and complete access to the books & accounts.  Right to require from the officers of the company such information & explanation.  Entitled to receive notice of and to attend general meetings of the company.

Based on the recommendation of Kumarmangalam Birla Committee report on Corporate Governance, the Companies (Amendment) Act, 2000 has introduced this sec.  Every public company paid up cap. Of more than 5 crores shall constitute an Audit Committee.

Penalty for non Compliance:-

Every officer in default shall be punishable up to one year of imprisonment or Rs. 50,000 or both.

Compromise –

It means an amicable settlement of differences by mutual concessions by the parties to dispute or difference by agreeing not to try it out.

Arrangement – It is of wider import than

compromise and includes a reorganization of the share capital of the company by the consolidation of shares of different classes. Arrangement & Compromise may take place for the purpose of Reconstruction & Amalgamation of companies.

 Reconstruction

(i) The transfer of undertaking of an existing
company to another company.The old company ceases to exist. (ii) The rights of shareholders in the old company is being satisfied by issuing shares in new co.

 Amalgamation

– It is the blending of two or more undertakings into one undertaking, the shareholders of each blending co. becoming substantially the shareholders of the other company which holds blended undertakings.

Modes of winding up
(i) Compulsory

[Sec.433] (ii)Voluntary winding up Members voluntary winding up Creditors voluntary winding up (i) Voluntary winding up under supervision of the court.

winding up by Court

 Special

Resolution.  Default in holding statutory meeting.  Failure to commence business.  Reduction in membership.  Inability to pay debts.  Just & equitable.

 Ordinary

resolution passed where the period fixed by the Articles for the duration.  If the company resolves by special resolution that it shall be wound-up voluntarily [sec.484]

Members  Solvent companies  No need of creditors meeting  Liquidator appointed by the member  No committee of inspection can be formed.

Creditors  Insolvent Companies  Creditors meeting necessary  Liquidator appointed by the creditor  If wish can formed a Committee of inspection.

 Based

on AGM Notice  Based on separate legal entity

Sign up to vote on this title
UsefulNot useful