COMPANY LAW


“ Law is the King of Kings far more
powerful and rigid than they; by whose
aid, even the weak may prevail over the
strong.”
 -Rig Veda
•
Company Law

George Mathew
Joby Philip
Joseph George
Luku George
Thomas
Prayag Sunder
Agenda
 Kinds of companies
1.Statutory company
2.Incorporated / Registered company
3.
•
 Statutory Company
 Incorporated by a special Act passed
either by the Central or State
legislature
E.g.: RBI, SBI, LIC…

 Cannot have the word ‘Limited’ as

part of their name’s
 Provisions of Companies Act, 1956
•
 Incorporated / Registered
companies
 Companies registered under the
Companies Act, 1956
 All companies in India, except the
statutory companies
•
•
•
 Types of registered
companies
1. Based on Number of Members
 a) Private Company
 b) Public Company
2. Based on Liability of Members

 a) Limited by shares
 b) Limited by guarantee
 c) Unlimited companies
•
 Private Company
Lim its th e n u m b e r o f m e m b e rs
S h a re s n o t issu e d to p u b lic b u t to
fa m ily a n d frie n d s
Tw o d o cu m e n ts to b e su b m itte d fo r
registration:
In te rn a l ( A O A )
E xte rn a l ( M O A )
B u sin e ss in co rp o ra tio n ce rtifica te
 Public Company

 A company which is not a private

company
 No limit on the maximum number of
members (minimum 7 members)
 No restriction on transfer of shares
 Can invite public for subscription of
its shares and debentures
•
•
 Other Kinds of companies
1 . C o m p a n ie s n o t fo r P ro fit / Lice n se d
C o m p a n ie s
2. One Man Company / Family
•
Company
3 . Fo re ig n C o m p a n y

4 . G o ve rn m e n t C o m p a n y
CAPITAL
SHARES
Difference b\w Stocks &
Shares
Stocks
 Shares


 Has no Nominal  Has a Nominal Value

value  May or may not be
 Always Fully paid fully paid
 May be transferred  Transferred as whole
in any fractions  All are of equal
 May be of different denominations
denominations  Shares have unique
 Stock bears no numbers to help
distinctive number identify
Types of Shares
Equity Shares
Types of Shares
Preference Shares
 Types of preference
shares
Types of Shares
Bonus shares
Types of Shares
 Sweat equity
shares
Issue of shares at a
discount
 The shares must be of a class already issued
 Issue of the shares at discount must be authorized by
resolution passed in the general meeting of company
and sanctioned by the company law board.
 The resolution must also specify the maximum rate of
discount at which the shares are to be issued
 Not less than one year has elapsed from the date on
which the company was entitled to commence the
business.
 The shares to be issued at discount must issued within 2
months after the date on which issue is sanctioned by
the company law board or within extended as may be
allowed by the Company Law Board.
 The discount must not exceed 10 percent unless the
Company Law Board is of the opinion that the higher
Issue of shares at a
premium
Calls on Shares
Minimum Subscription
 Reduction of share
capital
Transfer of Shares
 Transmission of
Shares
 Difference b\w
Transfer & Transmission
Transfer
 Transmission


 Deliberate act of  Arises due to

members operation of law
 Execution of  No execution of
instrument of instrument of
transfer. transfer.
 Payment of stamp  No payment of
duty. stamp duty.
 Effected against  Doesn’t involve any
consideration. consideration.
 Conversion of shares
into stocks
 Buy-back of
shares
Rights of share holder
Share Certificate
Share Warrant
Difference between
Warrant & Certificates
Share certificate
 
 Issued by public and
private company
 Is a statutory obligation
 Can be issued at any stage
of payment
 Transfer is complete only
after registration
 Stamp duty payable on
transfer
 Holder is a member of the
company
 Is not an negotiable
instrument
 Holder can file a petition
Share warrant
 Issued only by public
company
 Requires provision in AOA
and approval from
central government
 Can be issued with respect
to fully paid up shares.
 Transfer needs no
registration
 Stamp duty not payable on
transfer
 Holder’s name must be
struck of from the
register of members
Lien on Shares
 Forfeiture of
shares
 Surrender of
shares
 Bibliography
 Indian Company Law
» Harpal
Singh
»

• Company law and practice

» AK
Maju
mdar
& GK
Kapo
or
»

 Company Law
» KC Garg &
Quessssstionssss
????