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What is a company?
A Company is a voluntary association of
persons formed for the purpose of doing business,
having a distinct name and liability.

It can be incorporated under the Companies Act
(it may be any type of company)
Features of a company
A company is considered as a separate legal
entity from its members, which can conduct
business with all powers to contract.
Independent corporate entity. It is independent
of its members.
Limited Liability. (either by share or guarantee).
In a Limited Company, liability of its members is
It can own property in its own name. The
property is vested with the company, as it is a body

The income of the members is different from the
income of the company ( Income received by the
members as dividends cannot be same as that of the
Perpetual succession: Death of the members is not the
death of the company until it is wound up under relevant
As it is a legal entity or a juristic person or artificial
person it can sue and be sued in its own name.
The company enjoys rights and liabilities which are
separate from the members of the company

Features continued..
Limited Company ( Limited by share or by guarantee)
Unlimited company
Government Company
Foreign Company
Private Company
Public Company
Small Company
One Person Company
Company with Charitable Objects
Holding and Subsidiary Companies

Types of Companies
Limited by Shares- In such companies, the liability of
members is only the amount which remains unpaid on his
Limited by Guarantee not having share capital-In this
type of companies the Memorandum of Association
(MOA) limits the members liability. It will be based on the
undertaking that has been given in MOA for their
contribution in case of a winding up.
Limited by guarantee having share capital- In such
cases , the liability would be based on the MOA towards
the guaranteed amount and the remaining would be from
the unpaid sums of the shares held by the person

Limited Company
There is no limit on the liability of the
members. The liability in such cases would
extend to the whole amount of the companys
debts and liabilities.
Here the members cannot be directly sued by
the creditors.
When the company is wound up, the official
liquidator will call upon the members to discharge
the liability.
The details of the number of members with which
the company is registered and the amount of share
capital has to be stated in the Articles of
Association (AOA).
Unlimited Company
Government Company
In Govt. Company, 51% of the paid up share
capital is held by the government.
The shares can be held by the central
government or state government or Partly by
central and partly by two or more State
For government companies, some special
privileges are given.

Foreign Company
A company incorporated outside India, but having a
place of business in India.
If it does not have a place of business in India but only
has agents in India it cannot be considered to be
foreign company.
the place of business of a foreign company can be
found out from the website of Ministry of Corporate
Affairs (MCA)
A company which has a minimum of two
members and two directors.
The minimum paid up capital for a private
Company shall be Rs. 1 lakh or more as
prescribed by the Articles.
The maximum number of members to be fifty
( it does not include members who are employed
in the company, persons who were formerly
The rights to transfer the shares are restricted
in the Private companies
Private Company
Prohibits any invitation to the public to subscribe and
therefore it cannot issue a prospectus inviting the public to
subscribe for any shares in, or debentures of the company
It prohibits acceptance of deposits from persons other
than its members, directors or their relatives.
If two or more are holding one or more shares in a
company jointly, they shall for the purpose of this
definition, be treated as a single member.
As there is no public accountability like a public
company, there is no rigorous surveillance.
Public Company
A Public company means a company-
> Which is not a private company
> Minimum number of members is 7 & Directors is 3.
> Which has a minimum paid-up capital of Rs 5
lakh or such higher paid-up capital, as may be
> Closely held Company and Listed Company

Small Company
Small company has been defined as a company other than a
public company having a paid-up share capital of which
does not exceed fifty lakh rupees or such higher amount as
may be prescribed not exceeding Rs.5 crore.
turnover of which as per its last profit and loss account
does not exceed two crore rupees or such higher amount as
may be prescribed which shall not be more than twenty
crore rupees
The concept of Small Company has been introduced in
India by the Companies Act, 2013.

One Person Company
A company which has only one person as a member;
A private company with only sole member is one person
company. Its Memorandum of Association (MOA) shall
indicate the name of another person, with his consent, who
shall, in the event of the subscribers death or his
incapacity to contract become the member of the company
(Successor). The Draft Rules provide that only a natural
person may be a member or the successor. This will enable
the unorganized sector of proprietorship firms with
unlimited liability to transform into the organised version
of a private limited company with limited liability.
The concept of One person Company has been introduced
in India by the Companies Act, 2013.

Companies with Charitable Objects
It is formed as a limited company for promoting commerce, art, science, religion, charity
or any other useful object, and intends to apply its profits and income in promoting its
The payment of any dividend to its members is prohibited.

The Central Government may grant licence and allow the association to be registered as a
company with limited liability and without the addition to its name of the word
"Limited" or the words "Private Limited".

The association may thereupon be registered accordingly and on registration shall enjoy
all the privileges and be subject to all the obligations of limited companies.

A firm may be a member of this type of company.

This type of company shall not alter the provisions of its memorandum or articles except
with the previous approval of the Central Government.

Such companies are generally associations, clubs or chambers of commerce.

Holding and Subsidiary Company
Holding company, in relation to one or more other companies, means a
company of which such companies are subsidiary companies.

subsidiary, in relation to any other company (that is to say the holding
company), means a company in which the holding company
(i) controls the composition of the Board of Directors; or
(ii) exercises or controls more than one-half of the total share capital
either at its own or together with one or more of its subsidiary

a company shall be deemed to be a subsidiary company of the holding
company even if the control is of another subsidiary company of the
holding company;

Incorporation of a Company
The persons who conceive an idea of a company
and do the necessary work for formation of a
company are called the promoters of the

They may have to enter into pre-incorporation
contracts for the formation of the company, which
can be validated after the incorporation of the
Approval of name
Preparation of the Documents i.e. MOA/AOA etc.
Stamping of the Documents and submission for vetting by
the concerned Registrar of Companies
Corrections in the documents as suggested by the ROC
Uploading of the pre-vetted documents and payment of
the necessary fees
Submission of the physical copies of the documents to the
Approval for Registration
Memorandum of Association
It is one of the most vital documents of the company
which contains the following :
Situation of its registered office
Objects of the company
Capital with which the company is registered
Liability Clause which states the extent of the liability of
its members

Provisions of Memorandum cannot be inconsistent with
the provisions of the Companies Act.
Articles of Association
The Articles of a company contains the regulations for
internal management of the company.

These are the bye-laws of the company.

It is the responsibility of the company to comply with the
provisions contained in the Articles.

The provisions of Articles cannot be inconsistent with the
provisions of Memorandum as well as Companies Act.

E-form 1A
Information required
1. About the Applicant Name, address, occupation and email Id
2. Names (Max 6) in the order of preference, of the proposed
3. Significance of names
4. Main objects of the Company
5. Names of the Promoters
6. Information of the proposed Directors
Name of Father/Husband
CIN, in case already a director of an existing company
Date of Birth
Permanent & Present Residential Address
7. Proposed Authorised Share Capital
Electronically file Form 1A with MCA and make the payment.
The name approval is valid only for 60 days.

E-form 1
Memorandum of Association
Articles of Association
E-Form 18 for situation of Registered Office
E-Form 32 for Appointment of the First Directors
Power of Attorney
To be executed by all the subscribers on Stamp
Paper of Rs 100/-
To contain power to make alterations and also to
collect Certificate of Incorporation.
MOA-Rs 200/- on the first page of MOA
AOA- 0.2% of the Authorised Share Capital
Power of Attorney- Rs 100/-
Form 1-Rs 100/-
Power of Attorney
Form 1
Form 18
Form 32
Make all corrections as advised by the ROC
Form 1
Scanned Copy of MOA
duly stamped and is
visible on it
Scanned Copy of AOA
duly stamped and is
visible on it
Scanned Copy of Form1
duly stamped showing
payment of duty
Form 1 with following attachments

The concerned ROC will issue the e-Certificate the
CIN on satisfactory completion of all the formalities
Finally the COI can be collected from the office of ROC
or will be sent directly to the Promoter.

Public Private Partnership (PPP)
Public Private Partnership (PPP) Project means a
project based on a contract or concession agreement,
between a Government or a statutory entity on the one
side and a Private Sector Company on the other-side,
for investing in construction and maintenance of
infrastructure asset and / or delivering an
infrastructure service.

Government Funding
The Scheme for Financial Support to Public Private Partnerships
(PPPs) in Infrastructure. (Viability Gap Funding Scheme) of the
Government of India provides financial support in the form of grants,
one time or deferred, to infrastructure projects undertaken through
public private partnerships with a view to make them commercially
viable. It is a Plan Scheme administered by the Ministry of Finance.
Suitable budgetary provisions are made in the Annual Plans on a year-
to- year basis for the scheme.

To address the financing needs of these projects, various steps have
been taken like setting up of India Infrastructure Finance Company
and launching of a Scheme to meet Viability Gap Funding (VGF) of
PPP projects. Setting up of infrastructure funds are also being
encouraged and multilateral agencies such as Asian Development Bank
have been permitted to raise Rupee bonds and carry out currency
swaps to provide long term debt to PPP projects.
What is a special purpose
vehicle (SPV)?
A special purpose vehicle (SPV), as
the name suggests, is formed for a
special purpose. Therefore, its
powers are limited to what might
be required to attain that purpose.

How does SPV function
An SPV is a firm, which embodies a financial
contract. SPVs are originally used to isolate
financial risk. A special purpose vehicle is being
set up to finance a large project without putting
the entire firm at risk.
It is a legal person, where every action of the firm
is defined by pre-specified contracts like
concession agreement etc..

There will be separate records for funds received
from equity, loan and expenditure.
The accounting books of the company are
maintained on accrual basis.
Maintaining books of accounts generally accepted
accounting principles, accounting standards
prescribed by ICAI and relevant provisions of
companies act are followed.