What Is a Company?

 A COMPANY, IS A LEGAL ENTITY MADE UP OF

AN ASSOCIATION OF PEOPLE, BE
THEY NATURAL, LEGAL, OR A MIXTURE OF BOTH, FOR
CARRYING ON
A COMMERCIAL OR INDUSTRIAL ENTERPRISE.
COMPANY MEMBERS SHARE A COMMON PURPOSE,
AND UNITE TO FOCUS THEIR VARIOUS TALENTS AND
ORGANIZE THEIR COLLECTIVELY
AVAILABLE SKILLS OR RESOURCES TO ACHIEVE
SPECIFIC, DECLARED GOALS.
 Types Of companies
 ROYAL CHARTERED COMPANIES
 ROYAL CHARTERED COMPANIES ARE COMPANIES CREATED BY THE ROYAL
CHARTER. THEY ARE GRANTED POWER OR A RIGHT BY THE MONARCH OR BY
SPECIAL ORDER OF A KING OR A QUEEN.
 REGISTERED OR INCORPORATED COMPANIES
 COMPANIES WHICH ARE INCORPORATED UNDER THE COMPANIES ACT PASSED
BY THE GOVERNMENT COMES UNDER THIS HEAD. GOOGLE INDIA PVT LTD IS AN
EXAMPLE OF INCORPORATED COMPANIES.
 PUBLIC LIMITED COMPANY
 A PUBLIC LIMITED COMPANY IS SEPARATE FROM ITS MEMBERS (SHAREHOLDERS)
AND THE LIABILITY OF ITS MEMBERS IS ALSO LIMITED. ITS EXISTENCE IS THUS NOT
AFFECTED BY THE RETIREMENT OR DEATH OF ITS SHAREHOLDERS.
 Private Limited Company
 Private Limited (Pvt Ltd) companies have more
than 2 and less than 50 members and their
liability is limited or unlimited depending on the
type of the company it is.

Limited By Shares
 The liability of the shareholders is limited to
the extent of the face value of shares held by
them. Most Pvt Ltd companies are of this type.
 Limited By Guarantee
 In these companies, in case of liquidation, the
shareholders promise to pay a certain fixed
amount to cover the liabilities of the company.
 Company Constitution
 A COMPANY CONSTITUTION IS A DOCUMENT THAT
GENERALLY SPECIFIES THE RULES GOVERNING THE
RELATIONSHIP BETWEEN, AND ACTIVITIES OF,
THE COMPANY AND ITS SHAREHOLDERS.
 Share capital
 Share capital refers to the funds that a company
raises in exchange for issuing an ownership
interest in the company in the form of shares.
 Company directors
 Company directors are responsible for the
management of their companies. They must act
honestly and promote the success of the business
and benefit its shareholders.
Memorandum of Association (MOA)
 A MEMORANDUM OF ASSOCIATION (MOA) IS A LEGAL
DOCUMENT PREPARED IN THE FORMATION AND
REGISTRATION PROCESS OF A LIMITED LIABILITY COMPANY TO
DEFINE ITS RELATIONSHIP WITH SHAREHOLDERS.
Legal Name of the Company

 The name clause requires you to state the legal and

recognized name of the company.
Address of the Registered Office
 The registered office clause requires you to show the
physical location of the registered office of the
company.
 Objectives of the Company
 THE OBJECTIVE CLAUSE REQUIRES YOU TO SUMMARIZE
THE MAIN OBJECTIVES FOR ESTABLISHING THE COMPANY
WITH REFERENCE TO THE REQUIREMENTS FOR
SHAREHOLDING AND USE OF FINANCIAL RESOURCES.
Liability of Shareholders
The liability clause requires you to state the extent to which
shareholders of the company are liable to the debt
obligations of the company in the event of the company
dissolving.
Authorized Share Capital
 The capital clause requires you to state the company’s
authorized share capital, the different categories of shares
and the nominal value (the minimum value per share) of the
shares.