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AL-MUNAWAR COMMERCE ACADEMY
COMPANYAL-MUNAWAR COMMERCE
ACADEMY
B.COM PART- ll
MORNING SECTION
(GIRLS)
DEFINITION :
An association which is created or affected by law.
Or The business which is registered under the
co. ordinance 1984 .
First Company Of The World: (was established in 13th century in Italy)
First Company In England: (was established during 17th or 18th century)
First Company Of Asia: (was established in 1600)
Act of company
Today the corporate sector of pakistan is governed by companies ordiance 1984.
1984
14th august 1947
Act of 1913 Passed by British India
1947 – 1959 At the end of 1959
1960 Publish
1984 Accept
1985 Practice
KINDS OF COMPANY
1) CLASSIFICATION BY INCORPORATION
2) CLASSIFICATION BY SHARES
3) CLASSIFICATION BY FINANCIAL LIABILITY
4) CLASSIFICATION BY OWNERSHIP
1) CLASSIFICATION BY INCORPORATION
ACCORDING TO INCORPORATE COMPANY CAN BE CLASSIFIED AS :
1) CHARTERED COMPANY
2) STATUTORY COMPANY
3) REGISTERED COMPANY
2) CLASSIFICATION BY SHARES
ACCORDING TO SHARES COMPANY CAN BE CLASSIFIED AS:
1)PUBLIC COMPANY
2)PRIVATE COMPANY
3) CLASSIFICATION BY LIABILITY
ACCORDING TO LIABILITY COMPANY CAN BE CLASSIFIED AS:
1) LIMITED BY
SHARES
2) LIMITED BY
GUARANTEE
4) CLASSIFICATION BY OWNERSHIP ACCORDING TO OWNERSHIP
COMPANY CAN BE CLASSIFIED AS :
1) GOVERNMENT COMPANY
2) SEMI GOVERNMENT COMPANY
3) HOLDING COMPANY
4) SUBSIDIARY COMPANY
ABOUT COMPANY
BOARD OF DIRECTORS :- Directors are the person which are elected by ordinary shareholders in AGM to promote/direct the affairs of corporation.
AUTHORIZED CAPITAL :-This is maximum numbers of shares that a firm can legally issue.
RETAINED EARNING :-This is the term which is used in corporate business. This account is also used for distribution of dividend & appropriation of reserves
SHARES :-The share is a certificate of ownership in a company . A person who has this certificate is called shareholder.
According to sec 89 company act 19841) Ordinary share 2) Preferred share 3)
Underwriters 4) Share premium 5) Share discount 6) Market value
DIVIDEND :- Company paid to its shareholder in shape of profit. This profit in the term of accounting is known as DIVIDEND.
CASH DIVIDEND :-When company paid out profit in shape of cash or check.
STOCK DIVIDEND :-When company paid out profit in shape of additional shares and stock.
DIVIDEND
CASH
DIVIDEND
STOCK
DIVIDEND
PRELIMINARY EXPENSE :-Initially expense or cost to use establishment of corporation. This cost is not considered as expense but capitalized.
DEBENTURES/BONDS :-They are the financial certificate and any other securities other then shares of a company. They include in long term liability and redeemed after a long period of time .
FORMATION OF COMPANY
INCORPORATION OF A COMPANY IS COMPLICATED PROCEDURE.
IT REQUIRES THE FOLLOWING STEPS :
1) GETTING PROMOTORS TOGETHER
2) APPOINTMENT OF ADVISOR AND PREPRATION OF COMPANY DOCUMENT.
3) SUBMISION OF APPLICATION
4) PAYMENT OF REGISTRATION FEE
5) PRINTING SHARE CERTIFICATE
6) ISSUANCE OF REGISTRATION CERTIFICATE
7) PUBLICATION OF PROSPECTUS
DOCUMENTS OF COMPANY
1) MEMORANDUM OF ASSOCIATION (MOA)
2) ARTICLES OF ASSOCIATION (AOA)
3) PROSPECTUS
DOCUMENTSDOCUMENTS
PROSPECTUS
IT IS AN INVITATION, ADVERTISEMENT OR CIRCULAR OF A COMPANY
ONLY PUBLIC LIMITED COMPANY CAN ISSUE PROSPECTUS
CONTENTS OF PROSPECTUS
PROSPECTUS INCLUDE THE FOLLOWING MATTERS :
1) SHARE CAPITAL
2) BRIEF HISTORY
3) FINANCIAL INFORMATION
4) BOARD OF DIRECTORS
5) INTREST OF DIRECTORS
6) GENERAL INFORMATION
7) MISCELLANEOUS
8) APPLICATION AND ALLOTMENT
MEMORANDUM OF ASSOCIATION
IT IS PREPARED AT THE TIME OF REGISTRATION .
IT IS KNOWN AS CHARTER OF A COMPANY
IT DETERMINES THE RIGHTS, POWER
& OBJECT OF A COMPANY.
CLAUSES OF ( MOA )
THE MOA HAS FOLLOWING SIX CLAUSES
1) NAME CLAUSE
2) DOMICILE CLAUSE
3) OBJECT CLAUSE
4) CAPITAL CLAUSE
5) LIABILITY CLAUSE
6) ASSOCIATION CLAUSE
ARTICLES OF ASSOCIATION
IT IS INTERNAL DOCUMENT OF A COMPANY
IT EXPLAIN RULES AND REGULATION OF COMPANY
CONTENTS OF ( AOA )
IT INCLUDE RULES AND REGULATION ABOUT FOLLOWING :
1) SHARE CAPITAL AND ITS DIVISION
2) METHOD OF TRANSFER SHARES
3) CONVERSION OF SHARES
4) METHOD TO CALL THE MEETING OF THE COMPANY
5) VOTING POWER OF MEMBERS
6) APPOINTMENT OF DIRECTORS
7) POWER AND DUTIES OF DIRECTORS
8) ACCOUNTS AND THEIR AUDIT
9) NOTICE TO BE ISSUED BY COMPANY
10)WINDING UP A COMPANY
MEETINGS OF COMPANY
DIFFERENT TYPES OF MEETINGS
1) Share Holders Meeting:
a)Statutory Meeting:
First meeting of the companyLegally enforced by lawTime periodNotice of meetingobjectives
b)Annual General Meeting (AGM): General meeting of company members
every yearFirst AGMNotice of meetingPlace of meetingobjectives
c)Extra ordinary meeting:
All general meetings except statutory
and AGM Irregular TimeEmergency G.M
Meeting of elected directors of company
a)Board Meeting
b)Committee Meeting
2) Director’s Meeting:
Meeting Of ShareholdersIrregular timeHolder of the meeting
a)Class Meeting
b)Creditor’s Meeting
3) Special Meetings:
BUSINESS COMBINATIONS
1) CLASSIFICATION BY AGREEMENTS
2) CLASSIFICATION BY OWNERSHIP
3) CLASSIFICATION BY STRUCTURE
1) COMBINATION ACCORDING TO AGREEMENTS
ACCORDING TO AGREEMENT COMBINATIONS ARE AS FOLLOW :
• CARTEL• JOINT VENTURE• POOL• TRUST
2) COMBINATION ACCORDING TO OWNERSHIP
ACCORDING TO OWNERSHIP COMBINATIONS ARE AS FOLLOW :
MERGER
A+a+b=A* AMALGAMATION
A+B+C=D
3) COMBINATIONS ACCORDING TO STRUCTURE
ACCORDING TO STRUCTURE COMBINATIONS ARE AS FOLLOW :
VERTICAL
COMBINATION HORIZONTAL
COMBINATION
VERTICAL COMBINATION
DEFINITION :
Vertical integration is the combination of firms in successive stage of same industry.
FLOUR MILL
(raw material)
BAKERY (manufacturing)
BISCUIT FACTORY
(wholesaler)
MARKET
(retailer)
HORIZONTAL COMBINATION
BUSINESS UNITS DEALING IN THE PRODUCTION OF SIMILAR PRODUCT COMBINE UNDER A SINGLE MANAGEMENT.
DEFINITION :
A
TOOTHPASTE
FACTORY
B
TOOTHPASTE
FACTORY
C
TOOTHPASTE
FACTORY
MANAGEMENT
MARKET
MERITS OF COMPANY
ACCUMULATION OF LARGE RESOURCES LIMITED LIABILITY CONTINUITY IN EXISTENCE EFFICIENT MANAGEMENT ECONOMIES OF LARGE SCALE
PRODUCTION TRANSFERABILITY OF SHARES DIFFUSED RISK DEMOCRATIC SET – UP SOCIAL BENEFITS
DEMERITS OF COMPANY
Difficulty in formation Double taxation Difference in opinion Lack of freedom LACK OF SECRECY
WINDING UP OF COMPANY
DEFINITION :-
WINDING UP OF A COMPANY IS THE PROCESS OF PUTTING AN END TO ITS LIFE. AT THE END OF THE WINDING UP , THE COMPANY WILL BE DESTROYED OR DISSOLVED AND WILL HAVE NO ASSETS AND LIABILITIES.
REASONS FOR WINDING UP
1) MAIN OBJECT OF THE COMPANY FOR WHICH ITS WAS ESTABLISHED HAS BEEN ACCOMPLISHED.
2) IT HAS BECOME IMPOSSIOBLE TO CARRY OUT THE MAIN OBJECTS OF THE COMPANY.
3) THE COMPANY IS NOT IN A POSITION TO PAY ITS DEBTS IN FULL.
WINDING UP OF THE COMPANY
COMPANY MAY BE WOUND UP UNDER TWO CONDITIONS
1) WINDING UP BY THE LAW OF COURT
2) VOLUNTARY WINDUP
1) WINDUP BY COURT LAW
• Failure in holding statutory meetings. • Failure to show statutory report• Reduction of membership below minimum • Inability to pay debts • Default in filing balance sheets, profit and loss account or annual returns
APPLICATION OF WINDING UP
THE FOLLOWING CAN SEND APPLICATION FOR WINDING UP OF COMPANY
1) COMPANY ITSELF
2) CONTRIBUTRIES
3) CREDITORS
4) ALL OR ANY OF THE ABOVE PARTIES JOINTLY OR SEPARATELY
5) REGISTRAR
2) VOLUNTARY WINDUP
THERE ARE TWO KINDS OF VOLUNTRY WINDUP
A) AT THE WILL OF MEMBER
B) AT THE WILL OF CREDITORS
OBJECT OF VOLUNTARY WIND UP
THE OBJECT OF VOLUNTARY WINDING UP IS THAT THE COMPANY AS WELL AS THE CREDITORS IS LEFT FREE TO SETTLE THEIR AFFAIRS WITHOUT GOING TO COURT.
CIRCUMTANCES IN WHICH COMPANY WIND UP VOLUNTARILY
BY PASSING AN ORDINARY RESOLUTION
BY PASSING SPECIAL RESOLUTION
1) BY PASSING AN ORDINARY RESOLUTION
WHN THE PERIOD FOR THE DURATION OF THE COMPANY BY THE ARTICLE HAS EXPIRED, THE COMPANY IIN GENERAL MEETING MAY PASS AN ORDINARY RESOLUTION FOR ITS VOLUNTARY WINDING UP.
2) BY PASSING SPECIAL RESOLUTION
A COMPANY MAY AT ANY TIME PASS A SPECIAL RESOLUTION FOR WINDING UP
FINANCIAL STATEMENT
COMPONENTS OF FINANCIAL STATEMENTS
Statement of financial position
Statement of comprehensive income
Statement of changes in equity
Statement of cash flows Notes.
X.Y.Z. CO STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED DEC 31, 2014
SALES
COST OF SALES
GROSS PROFIT
SELLING EXPENSE
ADMINISTRATION EXPENSE
NET INCOME
OTHER OPERATING INCOME
OTHER OPERATING EXPENSES
NET INCOME FROM OPERATION
FINANCIAL EXPENSES
PROFIT BEFORE TAXATION
TAXATION
PROFIT FOR THE YEAR
OTHER COMPREHNSIVE INCOME
TOTAL COMPREHNSIVE INCOME
DEC 31, 2014 DEC 31,2013
XXX XXX
(XXX) (XXX)
XXX XXX
(XXX) (XXX)
(XXX) (XXX)
XXX XXX
XXXX XXXX
(XXXX) (XXXX)
XXX XXX
(XXX) (XXX)
XXX XXX
(XXX) (XXX)
XXX XXX
XXX XXX
XXX XXX
X.Y.Z. COBALANCE SHEET
FOR THE YEAR ENDED DEC 31,2014
DEC 31, 2014 DEC 31, 2013
EQUITY :
SHARES CAPITAL & RESERVES XXX XXX
NON-CURRENT LIABILITIES XXX XXX
CURRENT LIABILITIES XXX XXX
TOTAL EQUITY XXXXXXXXX XXXXXXXX
ASSETS :NON-CURRENT ASSETS XXX XXX
CURRENT ASSETS XXX XXX
TOTAL ASSETS XXXXXXXX XXXXXXX
QUESTION TIME
THANK YOUSIR MUNAWAR
SIR IRFAN , SIR FARHAN & SIR WASEEM
THANK YOU
PRESENTED BY : SYEDA NIDA HABIBA SAKINA BISMA ARIBA BINISH SAMIYA SAIMA MAHAM RIDA SUMAIYA DARAKSHAN UROOSA MARINA
PREPARED BY :
Ram