Corporate laws... help
This query is : Resolved
30 August 2010
Dear respected sir,
My name is yusuf & I want want to know about pvt.companies & public companies laws.. in full detail so that i can work on it..
Hoping for your kind information..
thanks..
My name is yusuf & I want want to know about pvt.companies & public companies laws.. in full detail so that i can work on it..
Hoping for your kind information..
thanks..
30 August 2010
You are requested to check the article at the link below:
https://www.caclubindia.com/articles/basic-understanding-about-companies--2889.asp
Also share the exact purpose for this query for a specific answer.
Regards
https://www.caclubindia.com/articles/basic-understanding-about-companies--2889.asp
Also share the exact purpose for this query for a specific answer.
Regards
30 August 2010
Types of Companies
1.
"Private company" is defined in section 3(1)(iii) of the Act and it means a company which has a minimum paid-up capital of one lakh rupees or such higher paid-up capital as may be prescribed, and by its articles,
(a) restricts the right to transfer its shares, if any;
(b) limits the number of its members to fifty (50) not including —
(i) persons who are in the employment of the company; and
(ii) 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; and
(c) prohibits any invitation to the public to subscribe for any shares in, or debentures of, the company: and
(d) prohibits any invitation or acceptance of deposits from persons other than its members, directors or their relatives:
Provided that where two or more persons hold one or more shares in a company jointly, they shall, for the purposes of this definition, be treated as a single member;
2.
"Public company" is defined in section 3(1)(iv) of the Act and it means a company which —
(a) is not a private company;
(b) has a minimum paid-up capital of five lakh rupees or such higher paid-up capital, as may be prescribed;
(c) is a private company which is a subsidiary of a company which is not a private company.
3.
"Government company" is defined in section 617 of the Act and it means any company in which not less than fifty-one per cent 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 as thus defined.
As provided by section 620 of the Act, the Central Government may, by notification in the Official Gazette, exempt Government companies from certain provisions or certain provisions of the Act shall apply to them with exceptions, modifications and adaptations.
4.
"Foreign company" is defined in section 591 of the Act and it means a company which
(a) is incorporated outside India and
(b) has established a place of business within India.
Within 30 days of establishment of such place of business within India, the Foreign Company is required to submit documents/details under section 592. Alterations and changes in these documents/details are required to be notified within 30 days.
The provisions of sections 118 (right to obtain copies of trust deed), 124 to 145 (registration of charges), 159 (annual returns to be made by company), 209 (Books of account to be kept by company), 209A (inspection of books of account of company), 233A (power of Central Government to direct special audits in certain cases), 233B (audit of cost accounts in certain cases), 234 to 246 (power of Registrar to call for information etc.) apply to such foreign company.
5.
"Company limited by guarantee" is defined in section 12(2)(b) of the Act and it means a company having the liability of its members limited by the memorandum to such amount as the members may respectively undertake by the memorandum to contribute to the assets of the company in the event of its being wound up. Such company could be a "company limited by guarantee and not having share capital" or a "company limited by guarantee and having a share capital".
The Memorandum and Articles of Association of such companies are as per Tables C and D of Schedule I of the Act, respectively.
6.
"Unlimited Company" is defined in section 12(2)(c) of the Act and it means a company not having any limit on the liability of its members. The liability of a member extends to the whole amount of company’s debts and liabilities but the member will be entitled to claim contribution from other members. The Memorandum and Articles of such company is as per Table E of Schedule I of the Act.
7.
"Producer Company" is defined in section 581A of the Act and it means a body corporate having objects or activities specified in section 581B and registered as Producer Company under this Act.
Section 581B
(1) The objects of the producer company shall relate to all or any of the following matters, namely–
(a) production, harvesting, procurement, grading, pooling, handling, marketing, selling, export of primary produce of the Members or import of goods or services for their benefit.
Provided that Producer Company may carry on any of the activities specified in this clause either by itself or through other institution.
(b) processing including preserving, drying, distilling, brewing, vinting, canning and packaging of produce of its members.
(c) manufacture, sale or supply of machinery, equipment or consumables mainly to its members.
(d) providing education on the mutual assistance principles to its members and others;
(e) rendering technical services, consultancy services, training, research and development and all other activities for the promotion of the interest of its members;
(f) generation, transmission and distribution of power, revitalisation of land and water resources, their use, conservation and communications relatable to primary produce;
(g) insurance of producers or their primary produce;
(h) promoting techniques of mutuality and mutual assistance;
(i) welfare measures or facilities for the benefit of members as may be decided by the Board;
(j) any other activity, ancillary or incidental to any of the activities referred to in clauses (a) to (i) or other activities which may promote the principles of mutuality and mutual assistance amongst the members in any other manner;
(k) financing of procurement, processing, marketing or other activities specified in clauses (a) to (j) which include extending of credit facilities or any other financial services to its members.
(2) Every Producer Company shall deal primarily with the produce of its active Members for carrying out any of its objects specified in this section.
8.
Companies with licence under section 25
(1) Where it is proved to the satisfaction of the Central Government that an association—
(a) is about to be formed as a limited company for promoting commerce, art, science, religion, charity or any other useful object, and
(b) intends to apply its profits, if any, or other income in promoting its objects, and to prohibit the payment of any dividend to its members,
the Central Government may, by licence, direct that the association may be registered as a company with limited liability, without the addition to its name of the word "Limited" or the word "Private Limited".
(2) The association may thereupon be registered accordingly and on registration shall enjoy all the privileges and (subject to the provisions of this section) be subject to all the obligations, of limited companies.
Such companies are generally associations, clubs or chambers of commerce.
The Central Government has conferred powers under section 25(6) to exempt or modify certain provisions of the Act in relations to such companies.
9.
Holding & Subsidiary Company
According to Sec. 2(19) "holding company" means a holding company within the meaning of section 4 of the Act;
According to Sec. 2(47) "subsidiary company" or "subsidiary" means a subsidiary company within the meaning of Section 4 of the Act.
Sec. 4. of the Act states,
(1) For the purposes of this Act, a company shall, subject to the provisions of sub-section (3), be deemed to be a subsidiary of another if, but only if —
(a) that other controls the composition of its Board of directors; or
(b) that other —
(i) where the first-mentioned company is an existing company in respect of which the holders of preference shares issued before the commencement of this Act have the same voting rights in all respects as the holders of equity shares, exercises or controls more than half of the total voting power of such company;
(ii) where the first-mentioned company is any other company, holds more than half in nominal value of its equity share capital; or
(c) the first-mentioned company is a subsidiary of any company which is that other’s subsidiary.
1.
"Private company" is defined in section 3(1)(iii) of the Act and it means a company which has a minimum paid-up capital of one lakh rupees or such higher paid-up capital as may be prescribed, and by its articles,
(a) restricts the right to transfer its shares, if any;
(b) limits the number of its members to fifty (50) not including —
(i) persons who are in the employment of the company; and
(ii) 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; and
(c) prohibits any invitation to the public to subscribe for any shares in, or debentures of, the company: and
(d) prohibits any invitation or acceptance of deposits from persons other than its members, directors or their relatives:
Provided that where two or more persons hold one or more shares in a company jointly, they shall, for the purposes of this definition, be treated as a single member;
2.
"Public company" is defined in section 3(1)(iv) of the Act and it means a company which —
(a) is not a private company;
(b) has a minimum paid-up capital of five lakh rupees or such higher paid-up capital, as may be prescribed;
(c) is a private company which is a subsidiary of a company which is not a private company.
3.
"Government company" is defined in section 617 of the Act and it means any company in which not less than fifty-one per cent 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 as thus defined.
As provided by section 620 of the Act, the Central Government may, by notification in the Official Gazette, exempt Government companies from certain provisions or certain provisions of the Act shall apply to them with exceptions, modifications and adaptations.
4.
"Foreign company" is defined in section 591 of the Act and it means a company which
(a) is incorporated outside India and
(b) has established a place of business within India.
Within 30 days of establishment of such place of business within India, the Foreign Company is required to submit documents/details under section 592. Alterations and changes in these documents/details are required to be notified within 30 days.
The provisions of sections 118 (right to obtain copies of trust deed), 124 to 145 (registration of charges), 159 (annual returns to be made by company), 209 (Books of account to be kept by company), 209A (inspection of books of account of company), 233A (power of Central Government to direct special audits in certain cases), 233B (audit of cost accounts in certain cases), 234 to 246 (power of Registrar to call for information etc.) apply to such foreign company.
5.
"Company limited by guarantee" is defined in section 12(2)(b) of the Act and it means a company having the liability of its members limited by the memorandum to such amount as the members may respectively undertake by the memorandum to contribute to the assets of the company in the event of its being wound up. Such company could be a "company limited by guarantee and not having share capital" or a "company limited by guarantee and having a share capital".
The Memorandum and Articles of Association of such companies are as per Tables C and D of Schedule I of the Act, respectively.
6.
"Unlimited Company" is defined in section 12(2)(c) of the Act and it means a company not having any limit on the liability of its members. The liability of a member extends to the whole amount of company’s debts and liabilities but the member will be entitled to claim contribution from other members. The Memorandum and Articles of such company is as per Table E of Schedule I of the Act.
7.
"Producer Company" is defined in section 581A of the Act and it means a body corporate having objects or activities specified in section 581B and registered as Producer Company under this Act.
Section 581B
(1) The objects of the producer company shall relate to all or any of the following matters, namely–
(a) production, harvesting, procurement, grading, pooling, handling, marketing, selling, export of primary produce of the Members or import of goods or services for their benefit.
Provided that Producer Company may carry on any of the activities specified in this clause either by itself or through other institution.
(b) processing including preserving, drying, distilling, brewing, vinting, canning and packaging of produce of its members.
(c) manufacture, sale or supply of machinery, equipment or consumables mainly to its members.
(d) providing education on the mutual assistance principles to its members and others;
(e) rendering technical services, consultancy services, training, research and development and all other activities for the promotion of the interest of its members;
(f) generation, transmission and distribution of power, revitalisation of land and water resources, their use, conservation and communications relatable to primary produce;
(g) insurance of producers or their primary produce;
(h) promoting techniques of mutuality and mutual assistance;
(i) welfare measures or facilities for the benefit of members as may be decided by the Board;
(j) any other activity, ancillary or incidental to any of the activities referred to in clauses (a) to (i) or other activities which may promote the principles of mutuality and mutual assistance amongst the members in any other manner;
(k) financing of procurement, processing, marketing or other activities specified in clauses (a) to (j) which include extending of credit facilities or any other financial services to its members.
(2) Every Producer Company shall deal primarily with the produce of its active Members for carrying out any of its objects specified in this section.
8.
Companies with licence under section 25
(1) Where it is proved to the satisfaction of the Central Government that an association—
(a) is about to be formed as a limited company for promoting commerce, art, science, religion, charity or any other useful object, and
(b) intends to apply its profits, if any, or other income in promoting its objects, and to prohibit the payment of any dividend to its members,
the Central Government may, by licence, direct that the association may be registered as a company with limited liability, without the addition to its name of the word "Limited" or the word "Private Limited".
(2) The association may thereupon be registered accordingly and on registration shall enjoy all the privileges and (subject to the provisions of this section) be subject to all the obligations, of limited companies.
Such companies are generally associations, clubs or chambers of commerce.
The Central Government has conferred powers under section 25(6) to exempt or modify certain provisions of the Act in relations to such companies.
9.
Holding & Subsidiary Company
According to Sec. 2(19) "holding company" means a holding company within the meaning of section 4 of the Act;
According to Sec. 2(47) "subsidiary company" or "subsidiary" means a subsidiary company within the meaning of Section 4 of the Act.
Sec. 4. of the Act states,
(1) For the purposes of this Act, a company shall, subject to the provisions of sub-section (3), be deemed to be a subsidiary of another if, but only if —
(a) that other controls the composition of its Board of directors; or
(b) that other —
(i) where the first-mentioned company is an existing company in respect of which the holders of preference shares issued before the commencement of this Act have the same voting rights in all respects as the holders of equity shares, exercises or controls more than half of the total voting power of such company;
(ii) where the first-mentioned company is any other company, holds more than half in nominal value of its equity share capital; or
(c) the first-mentioned company is a subsidiary of any company which is that other’s subsidiary.
30 August 2010
Distinction Between A Public Company And a Private Company – Following are the main points of difference between a Public Company and a Private Company :-
1. Minimum Paid-up Capital : A company to be Incorporated as a Private Company must have a minimum paid-up capital of Rs. 1,00,000, whereas a Public Company must have a minimum paid-up capital of Rs. 5,00,000.
2. Minimum number of members : Minimum number of members required to form a private company is 2, whereas a Public Company requires atleast 7 members.
3. Maximum number of members : Maximum number of members in a Private Company is restricted to 50, there is no restriction of maximum number of members in a Public Company.
4. Transerferability of shares : There is complete restriction on the transferability of the shares of a Private Company through its Articles of Association , whereas there is no restriction on the transferability of the shares of a Public company
5 .Issue of Prospectus : A Private Company is prohibited from inviting the public for subscription of its shares, i.e. a Private Company cannot issue Prospectus, whereas a Public Company is free to invite public for subscription i.e., a Public Company can issue a Prospectus.
6. Number of Directors : A Private Company may have 2 directors to manage the affairs of the company, whereas a Public Company must have atleast 3 directors.
7. Consent of the directors : There is no need to give the consent by the directors of a Private Company, whereas the Directors of a Public Company must have file with the Registrar a consent to act as Director of the company.
8. Qualification shares : The Directors of a Private Company need not sign an undertaking to acquire the qualification shares, whereas the Directors of a Public Company are required to sign an undertaking to acquire the qualification shares of the public Company .
9. Commencement of Business : A Private Company can commence its business immediately after its incorporation, whereas a Private Company cannot start its business until a Certificate to commencement of business is issued to it.
10. Shares Warrants : A Private Company cannot issue Share Warrants against its fully paid shares, Whereas a Private Company can issue Share Warrants against its fully paid up shares.
11. Further issue of shares : A Private Company need not offer the further issue of shares to its existing share – holders, whereas a Public Company has to offer the further issue of shares to its existing share – holders as right shares. Further issue of shares can only be offer to the general public with the approval of the existing share – holders in the general meeting of the share – holders only.
12. Statutory meeting : A Private Company has no obligation to call the Statutory Meeting of the member, whereas of Public Company must call its statutory Meeting and file Statutory Report with the Register of Companies.
13. Quorum : The quorum in the case of a Private Company is TWO members present personally, whereas in the case of a Public Company FIVE members must be present personally to constitute quorum. However, the Articles of Association may provide and number of members more than the required under the Act.
14. Managerial remuneration : Total managerial remuneration in the case of a Public Company cannot exceed 11% of the net profits, and in case of inadequate profits a maximum of Rs. 87,500 can be paid. Whereas these restrictions do not apply on a Private Company.
15. Special privileges : A Private Company enjoys some special privileges, which are not available to a Public Company.
1. Minimum Paid-up Capital : A company to be Incorporated as a Private Company must have a minimum paid-up capital of Rs. 1,00,000, whereas a Public Company must have a minimum paid-up capital of Rs. 5,00,000.
2. Minimum number of members : Minimum number of members required to form a private company is 2, whereas a Public Company requires atleast 7 members.
3. Maximum number of members : Maximum number of members in a Private Company is restricted to 50, there is no restriction of maximum number of members in a Public Company.
4. Transerferability of shares : There is complete restriction on the transferability of the shares of a Private Company through its Articles of Association , whereas there is no restriction on the transferability of the shares of a Public company
5 .Issue of Prospectus : A Private Company is prohibited from inviting the public for subscription of its shares, i.e. a Private Company cannot issue Prospectus, whereas a Public Company is free to invite public for subscription i.e., a Public Company can issue a Prospectus.
6. Number of Directors : A Private Company may have 2 directors to manage the affairs of the company, whereas a Public Company must have atleast 3 directors.
7. Consent of the directors : There is no need to give the consent by the directors of a Private Company, whereas the Directors of a Public Company must have file with the Registrar a consent to act as Director of the company.
8. Qualification shares : The Directors of a Private Company need not sign an undertaking to acquire the qualification shares, whereas the Directors of a Public Company are required to sign an undertaking to acquire the qualification shares of the public Company .
9. Commencement of Business : A Private Company can commence its business immediately after its incorporation, whereas a Private Company cannot start its business until a Certificate to commencement of business is issued to it.
10. Shares Warrants : A Private Company cannot issue Share Warrants against its fully paid shares, Whereas a Private Company can issue Share Warrants against its fully paid up shares.
11. Further issue of shares : A Private Company need not offer the further issue of shares to its existing share – holders, whereas a Public Company has to offer the further issue of shares to its existing share – holders as right shares. Further issue of shares can only be offer to the general public with the approval of the existing share – holders in the general meeting of the share – holders only.
12. Statutory meeting : A Private Company has no obligation to call the Statutory Meeting of the member, whereas of Public Company must call its statutory Meeting and file Statutory Report with the Register of Companies.
13. Quorum : The quorum in the case of a Private Company is TWO members present personally, whereas in the case of a Public Company FIVE members must be present personally to constitute quorum. However, the Articles of Association may provide and number of members more than the required under the Act.
14. Managerial remuneration : Total managerial remuneration in the case of a Public Company cannot exceed 11% of the net profits, and in case of inadequate profits a maximum of Rs. 87,500 can be paid. Whereas these restrictions do not apply on a Private Company.
15. Special privileges : A Private Company enjoys some special privileges, which are not available to a Public Company.
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