INTRODUCTION TO COMPANY

1. What is a Company?
Ans. Company means a group of persons associated together for the attainment of some
common end, social or economic. According to justice lord, Lindley. “Associations of many
Persons who contribute money of money’s worth to a common stock and
Invest in some trade and business and who share profit and loss arising therefore”.

2. Define Company.
Ans. According to justice lord, Lindley. “Associations of many persons who contribute money of
money’s worth to a common stock and invest in some trade and business and who share profit
and loss arising therefore”.

3. Who is a member of a company?

According to section 41 of the Companies Act 1956, the following be the members of Company
 The subscribers of the memorandum of company shall be deemed to have agreed to
become members of the company, & on registration, shall be entered as members in its
registration of members
 Every other person who agrees in writing to become a member company and whose
name is entered in its register of members shall Member of the company
 Every person holding equity share capital of a company and whose name is entered as
the beneficial owner in the records of a depository shall be at be deemed to be a
member of the concerned company

4. State the kinds of companies.

Ans. The various kinds of companies are
 Companies limited by shares These may be the public or private company
 Public companies limited by guarantee, and having share capital & Not having a share
capital
 Public unlimited companies having share capital & Not having a share capital
 Private companies limited by shares
 foreign companies
 Government companies
5. What is One Person Company
Ans. One Person Company (OPC) is company which is incorporated a private limited
company where there is only one member. Here there prohibition in regard to invitation to the
public for subscription of the securities of the company.
6. What is private company as per Companies Act 2013?
Ans. As per Companies Act 2013, "Private Limited Company is a type company that
offers limited liability to its shareholders but that places certain restrictions on its ownership and
the maximum number of members restrict to 50”
7. Define public company.
Ans. A public company means & company, which by its Articles does
 Restrict the right to transfer its shares
 Limit the number of its members, and
 Prohibit any invitation to the public to subscribe for any shares or debentures, of the
company
 8. What is a company limited by guarantee?
Ans. Company limited by guarantee is a company where the liability the members of
company is limited to a fixed amount the member undertake to contribute to the assets of the
company in case of its winding up the company is called a company limited by guarantee
9. Define Company limited by Shares.
Ans. A company limited by shares refers to the company that has shareholders and the
liability of the shareholders to creditors of the company is limited to the capital.
10. What is a holding company?
Ans. Company is known as the holding company of another company control over that other
company. According to Sec 4(4) of the Companies Act, a company is "deemed to be the holding
company of another only if that other is its subsidiary.

11. What is Subsidiary Company?

Ans. A subsidiary is a company that is partly or completely owned by another company
that holds a controlling interest in the subsidiary company. Company holds a minimum of 51%
of share capital
12. What Is government company?
Ans. A government company means any company in which at least 51% of the paid up
share capital is held by the central government or by any state government or partly by one or
more state governments
13. Define the term Associate Company.
Ans. Associate Company is a corporation whose parent company possesses minority
stake in the ownership of the corporation. An associate Company is partly owned by another
company or group of companies.
14. What is Small Company?
Ans. Small Company means a company whose paid-up share capital does exceed RS
50 lakh or such higher amount as may be prescribed (not exceeding Rs. 5 crore). Or whose
turnover as per its last profit & loss account does not exceed Rs. 2 crore or such higher amount
as may be prescribed (not exceeding Rs 20 crore).
15. Define Foreign Company.
Ans. Foreign Company is defined as any company or a body incorporate outside India
and which has a place of business in India whether by Itself or through an agent,
physically or through electronic mode and conducts any business activity in India in any
other manner.
16. What Is Global Company?
Ans. Global Company refers to a company that operates in more the one country or that
operates in foreign countries.
17. Define the term Body Corporate.
Ans. Body corporate broadly means a corporate entity which has legal existence. The
term "body corporate" is defined in Section 2(11) of Companies Act, 2013.
18. What Is Listed Company?
Ans. A company is said to be listed if its shares can be traded on stock exchange. Indian
listed companies are Indian Oil Corporation Ltd o and Natural Gas Corporation Ltd.,
Reliance Industries Ltd etc.
19. What is limited liability?
Ans. Limited liability is a type of liability that does not exceed the amount Invested in a
partnership or limited liability company. The limited liability is one of the biggest advantages
of investing in publicly listed companies.