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Introduction
Definition of company
Characteristics of company
Types of company
Formation of company
Memorandum of association
Article of association
Prospectus
Public deposits
Share & Share capital
Allotment of Shares
Members
Meetings
Winding up
Companies Act, 2013
Introduction:
The Companies Act 2013 is an Act of the Parliament of
India which regulates incorporation of a company,
responsibilities of a company, directors, dissolution of a
company.
The 2013 Act is divided into 29 chapters containing
470 sections and 7 schedules.
The Act has replaced The Companies Act, 1956 (in a
partial manner) after receiving the assent of
the President of India on and with only 98 provisions 29
August 2013.
The Act came into force on 12 September 2013 with
few changes like earlier private companies maximum
number of member was 50 and now it will be 200. A
new term of "one person company" is included in this
act that will be a private company of the Act notified.
Another 184 sections came into force from 1 April 2014
Companies act, 2013
Definition:
A company is an artificial
person created by law. It
has separate legal entity,
perpetual succession, and
common seal.
Companies act, 2013
Characteristics of company:
1. Artificial person : the company becomes artificial person after
registration, it means that company hold property, enter into
contracts , borrow or lend money on its own name.
2. Separate legal entity : the company has a separate legal entity, it
means it is independent from its members.
3. Perpetual existence : it means the company is not affected by
death, lunacy or insolvency of its member.
4. Limited liability : Since the company has separate legal entity, its
shareholders only liable for their liabilities not the liable for debts of
the company.
5. Separate property : a company, being a legal person, is capable
of owing, using & disposing of property in its own name.
6. Common seal : the company have its own common seal. The
symbol of seal is the signature of director of company, because
company is an artificial person
On the On the basis On the basis
basis of On the basis On the basis of
of number of of
liability of control ownership
members incorporation
Formation of company:
In this promoter gives the idea of
forming a company.
Memorandum of association:
Section
2(28)
Contents of MoA:
The Name clause: it consists of companys name.
The Registered office clause: it consists of name of
state in which the registered office of company
situated.
The Object clause: it consists of objective of
company.
The Liability clause : it consists of liability of
members.
The Capital clause: it consist of amount of share
capital of company.
The Association or Subscription clause: The names,
addresses, descriptions, occupations of the
subscribers, and the number of shares each
subscriber has taken and his signature attested by
a witness.
Companies act,2013
Article of association:
Itcontains rules relating to the
management of its internal affairs.
They define the duties, rights, powers and
authority of the shareholders and the
directors in their respective capacities of
the company, and the mode and form in
which the business of the company is to
be carried out.
Companies act,2013
Contents of AoA:
The business of the company;
The amount of capital issued and the classes of
shares the increase and reduction of share
capital;
The rights of each class of shareholders and the
procedure for variation of their rights;
The execution or adoption of a preliminary
agreement, if any; the allotment of shares; calls
and forfeiture of shares for non-payment of calls;
The allotment of shares; calls and forfeiture of
shares for non-payment of calls;
Transfer and transmission of shares;
Companies act,2013
Contd.
Companys lien on shares;
Exercise of borrowing powers including issue of
debentures;
General meetings, notices, quorum, proxy, poll, voting
resolution, minutes;
Number, appointment and powers of directors;
Dividends interim and final and general reserves;
Accounts and audit;
Keeping of books-both statutory and others.
Companies act,2013
Prospectus :
Essential elements of
Prospectus:
Contents of Prospectus:
Companys name & address of its registered office,
Objects of company.
The number and classes of shares, if any, and the nature
and extent of the interest of the holders in the property
and profits of company.
The details about redeemable preference shares intended
to be issued, if any, i.e., the date & mode of redemption,
etc.
Qualification shares of directors.
Any provision in the articles as the remuneration of the
directors, managing directors.
The names, addresses and occupation of the directors,
managing directors or managers.
Companies act,2013
Contd
The minimum subscription i.e., the minimum
amount which, in the opinion of directors, must be
raised by issue of shares.
The date and time of opening and closing of the
subscription list.
The amount payable on application and
allotment of each class of share.
Rights, privileges and restrictions attached to each
class of shares.
A reasonable time and place at which copied of
audited balance sheets and profit & loss A/c of
the company may be inspected.
Companies act, 2013
Public deposits:
Shares:
Preference shares:
A preference share is one which carries the
following two rights over holders of equity
shares:
A preferential right in respect of dividends
at a fixed amount or at a fixed rate;
A preferential right in regard to
repayment of capital on winding up.
Companies act, 2013
Participating& Non-participating.
Redeemable & Irredeemable.
Convertible & Non-convertible.
Cumulative & Non-cumulative.
Companies act,2013
Equity shares:
Share capital:
Allotment of Shares:
Members of company:
Every person:
Whose name is written in register of
members;
Who holding equity shares of company;
Who is beneficial holder.
Companies act, 2013
Rights of members:
Duties of members:
Every member who has been allotted
shares is liable to pay the company the
total nominal value of shares held by him.
If member faces problem to pay any call or
installments, he is serve with notice to pay
call money which he is unpaid, he is liable
to pay interest which may have occurred.
Companies act , 2013
Termination of members:
Transfer of share: if any member is not able to
pay his debt, he will transfer the share.
Forfeiture of shares: it means taken back of
shares from member due to his inability to pay
calls.
Surrender of shares.
Insolvency of shares.
Winding up of company.
Court order.
Companies act, 2013
Meetings:
Meetings can be defined as lawful
association and assembly of two or more
persons by previous notice.
Contd.
Statutory report: The Board of directors shall, at
least 21 days before the day on which the
meeting is to be held, forward a report, called
the statutory report, to every member of the
company.
Procedure at the meeting: (a) List of members.
(b) Discussion of matters relating to formational
aspect. (c) Adjournment.
Companies act, 2013
Contd
Contd
This meeting is for discussion about
dividend payable to shareholders and
retention money for future plans.
In this meeting all stakeholders are gather
for decision.
Companies act, 2013
Class meeting:
Under the Companies Act, class meetings of
various kinds of shareholders and creditors are
required to be held under different
circumstances. Under Sec. 106, class meetings of
the holders of different classes of shares are to
be held if the rights attaching to these shares are
to be varied
Companies act,2013
Winding up:
Winding up is the process of selling all the
assests of a business, paying of creditors,
distributing any remaining assets to the
partners or shareholders an then dissolving
the business.
Simply, it means liquidation and closing
down of company.
Winding up
Winding-up Voluntary under
by court winding -up supervision
of court
Member Creditor
voluntary voluntary
winding up winding up
Companies act, 2013
Contd..
The order passed by court due to following
reason:
Resolution for winding-up was obtained by
fraud.
The rules relating to winding-up order are not
being observed.
The liquidator is prejudicial or is negligent in
collecting the assests.
So the court takes all the power as in case of
compulsory winding-up and appoints additional
liquidators.
Thank
you
Presented by:
Yamini
Kahaliya
BBA(Honors)