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