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Company
Features of Company
• Separate legal entity• Limited liability• Perpetual succession• Common seal• Transferability• Separate property• Capacity to sue
Kinds of Company
• Statutory companies• Registered companies• Limited companies• Limited by guarantee• Unlimited companies• Private limited• Public limited• Holding company
Kinds of Company
• Subsidiary company• Government• Foreign company
Formation of Company
Steps for incorporation Memorandum of association Articles of associationThe agreement if any proposing an individual
as Managing directorA list of directors who agreed to be the first
directorsDeclaration
Formation of Company
Steps for commencement of businessProspectus or a statement in lieu of
prospectus Minimum subscriptionDirectors have paid application and allotment
moneySituation of registered officeFinal declaration
Advantages of Company
Limited liability Capital Public confidencePerpetual existenceEconomies of large scaleDemocratic principlesEnsures liquidityBenefits to the society
Memorandum of Association
Name clauseRegistered clauseObject clauseCapital clauseLiability clause
Articles of Association
Share capitalLien on sharesCall on sharesTransfer of sharesTransmission of sharesForfeiture of sharesConversion of shares into stockShare warrants
Articles of Association
Alteration of capitalGeneral meetingsVoting rightsDirectors Dividends and reservesBorrowing powersCapitalization of profitsWinding up
Prospectus
Contents- Part I of Schedule IIGeneral information – Name & address, Stock
exchanges for listing, punishment for fictitious application, Min subscription, refund, opening & closing dates, auditors & lead managers, trustees, CRISIL rating, underwriting
Capital structure
Prospectus
Terms of the issue Particulars of the issueCompany ManagementRisk factorsPart II of Schedule IIGeneral information – Consent of directors,
experts opinion, change of directors, resolution for issue, names & address of key personnel
ProspectusFinancial informationReport by Chartered AccountantStatutory information, issue expenses, issue
other than for cash, revaluation of assets if any
Reasonable time and place for inspection of key documents
Statement by expertsDisclosure by SEBI
Winding of CompanyModes of winding up CompulsoryVoluntary winding up – Members, CreditorsSubject to supervision of court
Winding of CompanyCompulsory Special resolutionDefault in delivering the statutory report or
holding the SMFailure to commence or suspends businessReduction in membershipInability to pay its debts – demand for
payment, Decreed debt unsatisfied, Commercial insolvency
Winding of CompanyCompulsory Just & equitable – Substratum of company is
gone, object of the company failedBusiness can be carried on only for lossesAssets are insufficient to meet its existing
liabilitiesOppression of minority interestDead lock in managementPublic interest prejudiced Illegal business
Petition for Winding of CompanyBy companyBy creditorsBy contributorsBy all the parties togetherBy registrarBy central govt
Consequences of Winding up orderIntimation to RegistrarCopy of the order to be filed to the registrarSuits stayedPowers of the courtEffect of winding up order
Voluntary Winding upBy ordinary resolutionBy special resolution
Member’s Voluntary Winding upDeclaration of solvencyAppointment of liquidatorBoard powers to cease on appointment of
liquidatorPower to fill vacancyNotice of appointment of liquidator to registrarCall creditors meeting in case of insolvencyCall general meeting at the end of each yearFinal meeting and dissolution
Creditor’s Voluntary Winding upMeeting of creditorsNotice of the resolutionAppointment of liquidatorCommittee of inspectionLiquidator’s remunerationBoard power ceases on appointmentPower to fill vacancy Call for meetingFinal meeting and dissolution
Consequences of Winding upShare holdersCreditors – secured and unsecured,
preferential paymentsOfficers and employeesProceedings against the companyConsequences as to costs