Dr Dy Patil Law College,

Pimpri
Presentation of Company law (LC 1003)
Presented by Akshat bhargav
Historical origin of company law in India
•
History:The concept of company act taken from English Companies Act, 1844.
• The first company legislation in India was passed in 1850 known as a Joint Stock Companies Act.
• This Act was replaced by the Joint Stock Companies Act, 1857 which introduced the principle of limited liability for
the first in India.
• This act again as a Joint Stock Companies Act, 1860 modified by addition the principle to banking companies.
• In 1866 the first comprehensive Act provided for the incorporation, regulation and winding up of companies.
• The 1866 Act was recast in 1882 and remained in force till 1913.
• Later on the Indian Companies Act, 1913 was passed followed by the English Companies Act, 1908.
• After that this act was amended and recasted several times almost every year.
• Finally the Companies Act, 1956 was passed and came into force 1st April 1956 based on the English Companies
Act, 1943. It consists of 658 sections and 13 schedules.
• After 25 amendments the Companies Act, 2013 passed by Parliament by introducing a new Company Bill. It came
into force on the 29th of August 2013.
Glimpses of emergence of Company act 1956
• Indian Company Law has been largely based on the prevailing English Law. The predecessor of the 1956 act was the 1913
act which undergone several changes and amendments including the drastic amendments of the 1936 and 1951 act. The
period of second world war and the post war years witnessed an upsurge of Industrial and Commercial activity in an
unprecedented scale in India. During these period, large developments was observed in the organisation and management
of Joint Stock Companies which more attracted the public After the war, the ars submitted its report recommending far
reaching changes in the English Companies Act, 1929. In India also, there was a in-depth feeling in view of the experience
gained during the war years; the time was ripe for fresh legislation. So, the government of India took up the revision of the
Company Law immediately after the world war. Two Company Lawyers- One from Bombay and the other from Madras was
appointed to give their opinions to the government upon the revision of the 1913 act. Their reportsOctober, 1950; the
government of India formed a committee of 12 members under the chairmanship of C.H. Bhabha to form an opinion on the
revision of the company law. They submitted its report on March, 1952 recommending the changes in companies act, 1913.
The report was again placed before the Chambers of Commerce, Trade associations, Professional bodies, Leading
industrialists, shareholders and representatives of labour
• The bill which eventually emerged as the Companies Act, 1956 was introduced in the parliament on 2nd September, 1953.
The bill underwent some further amendments and was passed on November, 1955. The new companies act came into force
on 1st April, 1956. Replacement of the Companies Act, 1956 by 2013: The Act has replaced The Companies Act, 1956 (in a
partial manner) after receiving the assent of the President of India on 29th August, 2013. The Companies Act, 2013 has been
notified in the Official Gazette on 30 August 2013
 Important definitions under Company Act,
2013
Company
As per Section 2(20) of the Companies Act 2013, company means a company incorporated
under this Act or under any previous company law;
Private Company
As per section 2(68) of the Companies Act, 2013, private company means a company having a
minimum paid-up share capital*** as may be prescribed, and which by its articles, —
(i) restricts the right to transfer its shares;
(ii) except in case of One Person Company, limits the number of its members to two hundred:
Provided that where two or more persons hold one or more shares in a company jointly, they
shall, for the purposes of this clause, be treated as a single member:
Provided further that—
(A) persons who are in the employment of the company; and
(B) persons who, having been formerly in the employment of the company, were members of
the company while in that employment and have continued to be members after the
employment ceased, shall not be included in the number of members; and
 Definitions
Foreign Company
As per section 2(42) of the Companies Act, 2013, foreign company means any company or body
corporate incorporated outside India which—
(a) has a place of business in India whether by itself or through an agent, physically or through
electronic mode; and
(b) conducts any business activity in India in any other manner.
•
One Person Company
As per section 2(62) of the Companies Act, 2013, One Person Company means a company
which has only one person as a member.
Small Company
As per section 2(85) of the Companies Act, 2013, small company means a company, other than
a public company, —
(i) paid-up share capital of which does not exceed fifty lakh rupees or such higher amount as
may be prescribed which shall not be more than Ten crore rupees; and
(ii) turnover of which as per last profit and loss account for the immediately preceding financial
year does not exceed two crore rupees or such higher amount as may be prescribed which shall
not be more than one hundred crore rupees:
Provided that nothing in this clause shall apply to—
(A) a holding company or a subsidiary company;
(B) a company registered under section 8; or
(C) a company or body corporate governed by any special Act
• Unlimited Company
• As per section 2(92) of the Companies Act, 2013, unlimited company means a company not
• having any limit on the liability of its member.
• Associate Company
• As per section 2(6) of the Companies Act, 2013, Associate Company in relation to another
• company, means a company in which that other company has a significant influence, but
which
• is not a subsidiary company of the company having such influence and includes a joint
venture
• company.
• Explanation. —For the purpose of this clause—
• (a) The expression “significant influence” means control of at least twenty per cent of total
• voting power, or control of or participation in business decisions under an agreement;
• Board of Directors or Board
• As per section 2(10) of the Companies Act, 2013, Board of Directors or Board, in relation to a
• company, means the collective body of the directors of the company;
• As per section 2(11) of the Companies Act, 2013, body corporate or corporation includes a
• company incorporated outside India, but does not include—
• (i) a co-operative society registered under any law relating to co-operative societies; and
• (ii) any other body corporate (not being a company as defined in this Act), which the Central
• Government may, by notification, specify in this behalf.
• Chief Executive Officer
• As per section 2(18) of the Companies Act, 2013, Chief Executive Officer means an officer of a
• company, who has been designated as such by it.
• Chief Financial Officer
• As per section 2(19) of the Companies Act, 2013, Chief Financial Officer means a person
• appointed as the Chief Financial Officer of a company.
• virtue of the articles of a company or an agreement with the company or a resolution passed in
• its general meeting, or by its Board of Directors, is entrusted with substantial powers of
• management of the affairs of the company and includes a director occupying the position of
• managing director, by whatever name called.
• Member
• As per section 2(55) of the Companies Act, 2013, member, in relation to a company, means—
• (i) the subscriber to the memorandum of the company who shall be deemed to have agreed to
• become member of the company, and on its registration, shall be entered as member in its
• register of members.
• (ii) every other person who agrees in writing to become a member of the company and whose
• name is entered in the register of members of the company;
• (iii) every person holding shares of the company and whose name is entered as a beneficial
• owner in the records of a depository.
• Company Liquidator

• As per section 2(23) of the Companies Act, 2013, Company Liquidator, in so far as it relates to

• the winding up of a company, means a person appointed by—

• (a) the Tribunal in case of winding up by the Tribunal; or

• (b) the company or creditors in case of voluntary winding up,

• as a Company Liquidator from a panel of professionals maintained by the Central Government

• under sub-section (2) of section 275.

• Document

• As per section 2(36) of the Companies Act, 2013, document includes summons, notice,

• requisition, order, declaration, form and register, whether issued, sent or kept in pursuance of

• this Act or under any other law for the time being in force or otherwise, maintained on paper or

• in electronic form.

• Register of Companies

• As per section 2(74) of the Companies Act, 2013, register of companies means the register of

• companies maintained by the Registrar on paper or in any electronic mode under this Act.

• Financial Statement

• As per section 2(40) of the Companies Act, 2013, financial statement in relation to a company,

• includes—

• (i) a balance sheet as at the end of the financial year;

• (ii) a profit and loss account, or in the case of a company carrying on any activity not for profit,

• an income and expenditure account for the financial year;

• (iii) cash flow statement for the financial year;

• (iv) a statement of changes in equity, if applicable; and

• (v) any explanatory note annexed to, or forming part of, any document referred to in sub-clause

• (i) to sub-clause (iv):