INTRODUCTION TO COMPANIES ACT 1956

‡ A company means a group of persons associated together for the attainment of a common end. social or economic. .What is a company ‡ A company is an artificial person created by law.

³on incorporation a company becomes a body corporate or a corporation with a perpetual succession and a common seal. I.e. It is a creation of the law and is sometimes known as an artificial person with a perpetual succession and a common seal.´ .D.. But it has no physical existence. ³A company formed and registered under the act´. and with a limited liability. IT exists only in the eyes of the law.´ ‡ According to N. ‡ According to Sec (3) of the act. it is regarded by the law as person.´ IT is a voluntary association of persons formed for some common purpose.Definition of a company ‡ According to Sec (1). with capital divisible into parts.Kapoor. just as a human being. known as shares.

CHARACTERSTICS OF A COMPNAY ‡ ‡ ‡ ‡ ‡ ‡ ‡ Separate legal entity Limited liability Perpetual succession Common seal Transferability of shares Separate property Capacity to sue .

of members On the Basis Of control On the Basis Of ownership Cos.Classification of Companies Companies On the basis of incorporation On the basis of liability On the basis Of no. By Registered companies By shares guarantee Statutory companies Unlimited liability Private company Holding company government Public company Subsidiary company Nongovernment . Ltd. With limited liability Ltd.

: The Reserve bank of India ± The Life Insurance corporation ± The Unit Trust Of India ‡ Registered Companies: These are the companies which are formed and registered under the companies Act.g.Classification on the basis of incorporation ‡ Statutory companies: These are created by special act of the legislature ± E. . 1956 or were registered under any of the earlier companies act.

Companies limited by shares E..g. Companies with limited liability: A. Unlimited companies E. .: Schools & Educational Establishments Clubs & Associations Charities and Organisation intending to apply for charitable status Churches & other Places of Worship Trade or Research Associations 2.:Infrastructure Corporation of Andhra Pradesh Limited. Maharashtra State Power Distribution Company Limited.Classification on the basis of liability ‡ ‡ ‡ ‡ ‡ ‡ ‡ ‡ ‡ ‡ ‡ ‡ ‡ ‡ ‡ ‡ 1. MSEB Holding Company Limited. Ltd.: Jonathan Rose co. Companies limited by guarantee E. B. ± ± Wicks Group of companies Suyog system and Software pvt.g. Maharashtra State Power Generation Company Limited and Maharashtra State Power Transmission Company Limited.g.

and by articles‡ (a) restricts the right to transfer its shares. as may be prescribed .00.000 or such higher paid up capital as may be prescribed .1. This restriction Is meant to preserve the private character of the company ‡ (b) limits the number of its members to 50 not including its employee-members ‡ ( C) prohibits any invitation to the public to subscribe for any shares in or debentures of the company ‡ (d) prohibits any invitation or acceptance of deposits from persons other than its members. directors and their relatives ‡ Public company ± A public company means a company which ‡ Has a minimum paid up capital of Rs. if any.5 lakh or such high paidup capital.Classification on the basis of number of members ‡ Private company ± A private company means a company which has a minimum paid up capital of Rs.

‡ Company controlling composition of Board of Directors ‡ Holding of majority of shares ‡ Subsidiary of another subsidiary .Classification on the basis of control ‡ Holding company ± A company is known as the holding company of another company if it has control over that other company. ‡ Subsidiary company ± A company is known as a subsidiary of another company when control is exercised by the latter over the former called a subsidiary company.

g. ‡ E.Classification on the basis of ownership ‡ Government company ± A Government Company means any company in which not less than 51% of the paid-up share capital is held by ‡ The central government or ‡ Any state government or governments or ± Partly by the central government and partly by one or more state governments.: State Trading Corporation of India Limited ‡ Minerals and Metals Trading Corporation of India limited ‡ Non-government company ± Foreign companies .

MNCS/ TRANSNATIONAL COMPANY ‡ A multinational corporation is a business enterprise that retains direct investments overseas and that maintains value-added holdings in more than one country. A firm is not really multinational if it just engages in overseas trade or as a contractor to foreign firms ‡ They are also called transnational companies .

Most blue chip stocks pay regular dividends. where blue chips stand for counters of the highest value. . and low risk. low yield. even when business is faring worse than usual. They are valued by investors seeking relative safety and stability. such stocks are perceived to offer reliable returns. The term derives from casino. though prices per share are usually high. Typically.BLUE CHIP COMPANIES ‡ A blue chip stock is the stock of a wellestablished company having stable earnings and no extensive liabilities.

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