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A Presentation On Company Law

Company Law Companies law (or the law of business associations) is the field of law concerning companies and other business organizations. This includes corporations, partnerships and other associations which usually carry on some form of economic or charitable activity.

Private Company Public Company Types of Company Private Company Public Company

Private Company  A Private Company is a company which by its articles of association restricts the right of transfer of the share, limits the number of members to fifty and prohibits invitation to the public to subscribe to the shares or debentures of the company. “A Private Company can be formed any two or more persons.”

Public Company means a company incorporated under this Act or under any law at any time in force before commencement of this Act and which is not a private company. “A Public Company can be formed by at least seven persons as members and the membership are open to the public.”

Government Company Government Company is a company which either registered as a Private Company or as a Public company with the Registrar of Companies under the Companies Act, 1956, & the Government has taken over or purchased 51% or more capital of the company. The remaining capital may be taken over by the public.

Features of Government Companies Formation: Government Company is formed & registered under Indian Companies Act, 1956, either as a Private company or Public company. Ownership: It may be partly or wholly owned by Government. State Government or Central Government or both may own the Government Company. If it is partly owned by Government then at least 51% of the capital must be taken over by the government.

Features of Government Companies Management: Management of Government Company is vested in the hands of Board of Directors. The Directors may be nominated by government or even the shareholders can appoint the Board of Directors. Capital Collection: A government company requires huge capital for its business operations. The company is free to collect capital through its own sources & it can even borrow the money depending upon its requirements.

  Promoter Promotion of a company is concerned with taking the steps necessary for incorporation. A promoter is one who starts off a venture-any venture-not solely for himself, but for others, but of whom, he may be one.

Function of the Promoter The promoter decides the company name and asserts that it will be accepted by the registrar of companies. He decides the details of the company memorandum and an article, the nomination of director’s solicitors, auditors, bankers and the registered office of the company. He makes arrangement for printing the memorandum and Articles, the registration of a company and the issue of prospectus. He is responsible to bring the company into existence.

Memorandum of Association The Memorandum of Association is a document which contains the fundamental rules regarding the constitution and activities of a company. It is a basic document which lays down how the company is to be constituted and what work it shall undertake.

Articles of Association The Articles of Association is a document which contains rules, regulation and bye laws regarding the internal management of the company. It lays down the regulations for achievement of the object of the company as per its memorandum as to carry out those objects.

Registration of memorandum and articles The memorandum and articles if any shall be field with the Registrar who if satisfied that the requirements of this Act have been complied with shall retain and register them within thirty days from the date of their receipt and in the event of refusal he shall communicate the grounds within ten days after that period to the company.

  Share Share means a share in the capital of the company and includes stock except when a distinction between stock and share is expressed or implied. “A Share is the interest of a shareholder in the company measured by a sum of money for the purpose, of liability in the place, and of interest in the second, but also consisting of a series of covenants entered into by all the Shareholders inter set.”

Winding Up Winding up is a legal process by which the life of a company is put to an end. In the course of winding up the assets of the company are realized by converting them into money, and the same is then applied for the satisfaction of debts, the balance being returned to the share - holders. The share - holders do not get anything until the creditors are fully paid.

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