A brief primer on Company Law

1. Companies Act, 1956
A Quick Glance

2. Methods of doing Business
• Create organization – either ‘for profit’ or for
‘non-profit’ purpose/s
• Organizations may be
a) For-Profit or Commercial organization, or
b) For Non-Profit, i.e. Charitable organization

3. Non-Profit Organization
• Through TRUST (Indian Trust Act)
• Through SOCIETY (Indian Societies Act)

4. For-Profit Organization
• Proprietorship
• Partnership
• Corporatization

5. Corporatization
• Nature of Corporate status – Advantage
Characteristics
• Nature of Corporate status – Disadvantage
‘Lifting of the corporate veil’

6. Formation of a Company
• Registration & Incorporation
* Procedure of Registration
* Certificate of Incorporation
* Pre-incorporation contracts
* Commencement of Business

7. Memorandum of Association
• Main Object
• Other Object
• Name
• Registered Office
• Doctrine of Ultra Vires
• Form & Content in tables B, C, D, & E in
schedule I of the Act

8. Article of Association
• Bye Laws
• Capital
• Classes of shares
• Rights of each class of shareholders
• Allotment, transfer, lien of shares
• Debentures
• Meetings, Directors, Accounts & Audit
• Binding on Members

9. Prospectus
• General Information
• Capital Structure of the Company
• Terms of the present issue
• Particulars of the issue
• Company Management and Project
• Outstanding Litigations
• Management Perception of Risk Factors

10. Classes of Shares
• Preference Share
Participating and Non-Participating
Cumulative and Non- Cumulative
Redeemable and Irredeemable
* Equity Share

11. Other Sources of Capital
• Bonus Shares
• Rights Share
• Debentures: PCD, NCD, FCD

12. Other Important Provisions
• Directors
• Meetings
• Accounts and Audit
• Winding up of Company