Company

act 1956.

Presented by: Rakesh RoshanRoll :20069

COMPANIES ACT 1956

It was enacted by the Parliament of India on January 18, 1956 and started on April 1, 1956The Companies Act, 1956 is an Act in which rules and regulations for maintaining the books of accounts of a company are written. No company in India can violate the regulations of this Act.It contains special laws which a company has to follow while maintaining its books of accounts. Registration of all companies in India are undertaken by this Act. If any company does not follow these rules and regulations, it is prohibited to perform by law of India

CONTENTS :

Nature and kinds of compaines Formation of a company Company management Company meetings Winding up of a company

COMPANY

A company is a form of business organization.

It is a collection of individuals and physical assets with a common aim of gaining profits.

This collection exists in Law and therefore a

company is considered a "Legal Person".

A company is a form of business organization’

A company is a form of business organization.

It is a collection of individuals and physical assets with a common aim of gaining profits.

This collection exists in Law and therefore a

company is considered a "Legal Person".

A company is a form of business organization’

CLASSIFICATION OF COMPANY Classification on the basis of

incorporation Classification on the basis of liability Classification on the basis of No of

member Classification on the basis of control Classification on the basis of ownership

ON THE BASIS OF INCORPORATION

Statutory company

Registered company

STATUTORY COMPANIES

Those companies which are created by a special act of the legislature.(Act 1956).

Ex :-Reserve bank of India ,state bank of India, life insurance corporation,industerial finance corporation.

It is also concerned with public utilities. Ex :-railway,tramways, gas ,electricity

company.

REGISTERED COMPANIES

Those companies which are formed and registered under the company act 1956.

This company registered under any of the earlier companies Act .

COMPANIES WITH LIMITED LIABLITY

1.COMPANIES LIMITED BY SHARE :- Company in which the liability of each shareholder is

limited to the amount individually invested.Company limited by share are private company or

public company.

2.COMPANIES LIMITED BY GUARANTEE:- Where the liability of the member of a company is

limited to the fixed amount in which the member undertake to contribute to the assets of the company.

Company not formed for the purpose of profit but for the promotion of art, science,culture,sport,commerce………….

UNLIMITED COMPANIES

A company without a share capital or limited liablity.

Every member is liable for the debt of the company.

It may or may not have a share capital. if it has share capital it will private company or public company.

ON THE BASIS OF NO OF MEMBER

PRIVATE COMPANY:- A company which has minimum paid-up capital

of 100,000. Its dot invites the general public to subscribe

for the share ,debenture of the company. It hasn't right to transfer share and debenture. Private company become public company. conversion by default conversion by choice

PUBLIC COMPANY

A company which has minimum paid-up capital of 5 lakh.

Minimum no of person 7.

WHEN DOES A PRIVATE COMPANY BECOMES A PUBLIC COMPANY

Conversion by default : A private company makes a default in complying with the essential statutory requirements as laid down in Section 3(1')(iii)of the Actiie., if-its membership exceeds 50 and it does not restrict transfer of share by its members and gives invitation to public to buy its shares or to make deposits, the company cease to be entilted to be the privilege and exemptions conferred on private companies by or under this Act, under this circumstances , the act shall apply to the company as if it were a public not a private company.

CONVERSION OF A PRIVATE COMPANY INTO A PUBLIC COMPANY BY CHOICE:

a) if a private company alter its article in such a manner that the no longer include the provision due to which it is catogorised as a private company, the company shall cease to be a private company. It shall then, within a period of 30 days after the said date , file with the registrar either a prospectous or a statement in lieu of prospectous. b) A copy of special resolution in form 23 must be filled with R.O.C within 30 days thereof.c) If the members are less than 7 steps must be taken to increase this no. to Atleast seven d) If the No. of he director are less than 3 steps must be taken to increase this no. to Atleast 3e) If the paid up share capital is less than 500000, steps must be taken to increase.f) The name of the company must be changed by deleting the word “Pvt

CONVERSION OF A PUBLIC COMPANY INTO A PRIVATE COMPANY (SEC 31(1)(2A)

1) A general meeting must be held a special resolution must be passed for altering the Articles of association that means restrictions, limitations and prohibitions which are necessary according to sec 3(1)(iii) are included.2) An application must be made to the central government in the form 1B for necessary approval.3) A copy of a special resolution in form 23 must be filed with the registrar within 30 days thereof along with altered articles.4) A copy of order of central government must be filed with R.O.C within one month of receipt.5) Where the no. members are more than 50 steps must be taken to reduce to 50 or less.6) The name of the company must be changed by adding the word “Pvt” registrar under the new name of the company.7) A fresh certificate of incorporation must be obtained from the registrar under the new name of the company.

ON THE BASIS OF CONTROL

1.HOLDING COMPANY:-A holding company is a company or firm that owns other

companies' outstanding stock. It usually refers to a company which does not produce goods or services itself; rather, its only purpose is owning shares of other companiesa company which has which has control over that other company.

2.SUBSIDIARY COMPANY:-  A company is known as a subsidiary of another company

when control is exercised by the latter (called holding to company) over the former called a subsidiary company.

A company is deemed to be a subsidiary of another company in the following 3 cases:

(1)COMPANY CONTROLLING COMPOSITION OF BOARD OF DIRECTORS

Where a company (Company A) controls the composition of board of directors of another company (Company B), the latter (Company B) becomes the subsidiary of the former (Company A).

(2)HOLDING OF MAJORITY OF SHARES:

Where a company (Company A) holds more than half in nominal value of equity share capital of another company (Company B) the latter (Company B) becomes the subsidiary of the former (Company A).

(3)SUBSIDIARY OF ANOTHER SUBSIDIARY:

Where a company (Company B) is subsidiary of anther company (say Company A1) which is itself subsidiary of the controlling company (Company A), the former (Company B) becomes the subsidiary of the controlling company (Company A).

(V)ON THE BASIS OF OWNERSHIP

Government company, or Non-government company Government Company: A Government company means any company in

which not less than 51 per cent of the paid-up share capital is held by.The central government, orAny state government or governments, orPartly by the central Government and partly by one or more state Governments.

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