Presented By:

KESHIKA WADHWA ABIR WADHWA RISHI SEHGAL RUKMANI SHARMA VARNIKA VERMA KETKI CHAOJI RAHUL JAIN ADITYA SETH

Companies Act
The Companies Act is a successor to the Indian Companies Act of 1913 and is a consolidation of many successive Amendment Acts, statutory rules and principles laid down in decisions of the courts in India and England.

Sec.3 of Companies Act, 1956 defines company asA company formed and registered under the Act or an existing company formed and registered under any of the previous company laws.

Features of a Company:
Incorporated Association Artificial Person Separate Legal Entity Limited Liability Transferability of Shares Perpetual Existence Common Seal Company may sue and be sued in its own name

 In the Companies Act, companies are classified as follows:

Types of Companies

Companie s limited by shares Public Companie s Deemed public Companie s

Companie s limited by guarantee Private Companie s

Companies with unlimited liability

The Companies Act also maintains three special types of companies namely: Holding and Subsidiary companies Government Companies Investment Companies

 A company in which the liability of its members is limited to the amount of share capital subscribed by them or standing in their names in the event of winding up. There are three types of limited companies: Public limited company Private company Deemed public company

not a private company no limit to the number of sharehold ers

Public company
minimum of 7 subscriber s.

has a minimum paidpaid-up capital of `5,00,000 or such higher paidpaid-up capital, as may be prescribed ;

Cannot invite public to subscribe to its shares or debenture s. shares cannot be transfer red freely

minimu m of two membe rs. Maxim um 50 membe rs

Privat e comp any

minimu m paid capital of `1,00,00 0 or more

3) Deemed public company: a private company incorporated in India, which is a subsidiary of a public company, can be called as deemed public company in india

Unlimited companies
A company not having any limit on the liability of its members is termed as unlimited company. The members of an unlimited company are liable, like the partners of a firm, for all its trade debts without any limit. An unlimited company must have Articles of Association, stating the number of members with which it is registered and the amount of registered share capital if it has any.

 The liability of the members of a guarantee company is limited by a fixed sum which is specified in the memorandum and beyond which they cannot be called upon to contribute.

Government Companies
The Companies Act defines Government Company as a company in which not less than 50% of the paid up share capital is held by the central Government, or by any State Government or governments, or partly by the Central Government and partly by one or more State Governments, and includes a company which is a subsidiary of a government company thus defineed. defineed. Eg; Eg; Mahanagar Telephone Nigam Limited

Holding and Subsidiary Companies

1. Holding Companies:- The Company which holds more than half of the nominal value of share capital of another company or controls the composition of board of directors of another company is known as Holding company. 2. Subsidiary Companies:- A company whose more than half of the nominal value of share capital is held by another company or another company controls the composition of board of directors of such company is known as Subsidiary Company.

Foreign companies:- A company incorporated outside the region of a nation but has a place of business in the nation is known as Foreign Company. Investment Companies:- A company whose principal business is acquisition of shares, debentures or other securities.

Formation of Company
Company comes existence when a number of persons come together with an intention to do some business. These persons are called promoters

Process of Formation of Company

. Name for the company Location of registered of the company Drawing up of Memorandum of Association Drawing up of Articles of Association Submitting documents to the Registrar Getting the company registered

Memorandum of Association
A Memorandum of Association is a fundamental document of a company which is also known as the Charter of the company. It lays down objects, scope of activities, limitations,power of a company beyond which a company cannot go.

Characteristics Of Memorandum of Association

Essential to prepare MOA for registration. It enable those who deal with the company to know about the permitted range of activities. It should be originally framed.I t cannot be adopted.

It is usually unalterable.

It lays objects, limitations of the company.

serves as a basis of contract between the company and the outsiders.

Contents of MOA
THE NAME CLAUSE: Name which is confirmed by the Registrar should be stated in this clause. The name with Limited as the last word of the name in case of public limited company and with Private Limited as the last word of the name in case of private limited company. REGISTERED OFFICE CLAUSE: This clause states the name of the state in which the Registered office of the company is to be situated.

 THE OBJECT CLAUSE: Main objects to be pursued by the company on its incorporation and Objects incidental or ancillary to the attainment of main objects. THE LIABILITY CLAUSE: the nature and extent of liability of its members. THE CAPITAL CLAUSE: The amount of share capital with which the company is to be registered. It shall also give the number and face value of the shares. THE ASSOCIATION OR SUBSCRIPTION CLAUSE:, the subscribers express their desire and agreement to form a company, agree to sign the memorandum and take specified number of shares

Articles of Association
The Articles of Association is a document of a company which contains the rules, regulations or bye laws for regulating the internal affairs of a company. It defines the mode and form in which the business of the company is to be carried on. They are framed with the object of carrying out the aims and objects as set out in Memorandum of Association.

If it does not register its articles the table A of Schedule I to the act applies to it. It is not essential for a public company to have its own articles.

AOA is subsidiary to MOA Regulate the internal affairs of a company.

IMPORTA NCE OF AOA

Define powers and duties of directors and officers

It is an alterable document

It is a public document which is subject to public inspection.

Contents of Articles
The articles of a company usually contain regulations relating to the following maters:
Share Capital and rights attached to different classes of shares. Calls on shares. Forfeiture of shares. Transfer and Transmission of shares. Redemption of Preference shares. Rights of members. General Meetings. Rights of members in General meetings. Constitution of Board of Directors.