This document discusses different forms of business organization including sole proprietorship, partnership, and joint stock companies. It provides details on their key characteristics, features, advantages, and disadvantages. The forms of business organization covered are based on ownership, liability, public interest, and controlling interest. The document also describes the process of incorporating a joint stock company including obtaining certificates of incorporation and commencement of business.
Background of Company Law in England,
Background of Company Law in India,
Definition of Company,
Nature & Characteristics,
Features of Company,
Lifting the corporate veil,
Types of Companies,
Formation of a Company,
Memorandum & Article of Association,
Prospectus,
Share & Share Capita,
Company Management & Director,
Meetings,
Borrowing Powers,
Debentures & Charges,
Accounts & Auditors,
Prevention of oppression & Mismanagement,
Winding up,
Definition , Features , Advantages , Disadvantages , Classification , Details of it's classification , Economic Importance of Joint Stock
Company in Bangladesh
Economic Importance of Joint Stock
Company in Bangladesh
Economic importance of joint stock company in Bangladesh , Method of formation , Modes of winding up .
Background of Company Law in England,
Background of Company Law in India,
Definition of Company,
Nature & Characteristics,
Features of Company,
Lifting the corporate veil,
Types of Companies,
Formation of a Company,
Memorandum & Article of Association,
Prospectus,
Share & Share Capita,
Company Management & Director,
Meetings,
Borrowing Powers,
Debentures & Charges,
Accounts & Auditors,
Prevention of oppression & Mismanagement,
Winding up,
Definition , Features , Advantages , Disadvantages , Classification , Details of it's classification , Economic Importance of Joint Stock
Company in Bangladesh
Economic Importance of Joint Stock
Company in Bangladesh
Economic importance of joint stock company in Bangladesh , Method of formation , Modes of winding up .
BY ZALEHA ZAIN AND PARTNER.
COMPANIES
CONTENTS
Types of Companies
Differences between Companies and Partnerships
Advantages of Companies over Partnerships
TYPES OF COMPANIES
Companies in Malaysia are classified according to:
(i) liability or
(ii) private or public status
BY LIABILITY
S.14 (2) Companies Act 1965 (CA) – a company may be:
A company limited by shares;
A company limited by guarantee;
A company limited by shares and guarantee;
An unlimited (liability) company.
FOREIGN COMPANY
S.4(1): ‘Where the company, or corporation, society, association or other body incorporated outside Malaysia, but which carries on business in Malaysia..‘
It is wholly or majority owned (measured in % of shares held) by non-Malaysians.
Such company has to lodge certain documents as laid down in S.332(1) CA 1965 and pay the appropriate fees before commencing the business in Malaysia.
A foreign company registered under the “Companies Act” 1965 has the power to hold immovable property in Malaysia.
Types of companies - Legal Environment of Business - Business Law - Commercia...manumelwin
Chartered companies are those which are incorporated by a Royal Charter. Some of the biggest companies like the East India Company were formed by the Royal Charter in England.
Company Definition, Meaning, Features, Types and StructureThejas Perayil
Company Definition, Meaning, Features of Companies, Companies Act 1956, Types of Companies, Structure of Companies, Hierarchical Structure of a company
Formation of company
Lifting the corporate veil
Company’s management: duties and liabilities of company directors and other officers
White collar crime
Corporate scandal
Whistle blowing
This material is a part of our PGPSE programe. Our programme is available for any student after class 12th / graduation. AFTERSCHO☺OL conducts PGPSE, which is available free to all online students. There are no charges. It is designed to give a comprehensive training in social entrepreneurship / spiritual entrepreneurship. This programme is aimed at those persons, who want to ultimately set up their own business enterprises which can benefit society substantially. PGPSE is a unique programme, as it combines industry consultancy, business solutions and case studies in addition to spirituality and social concerns. You can read the details at www.afterschoool.tk or at www.afterschool.tk
BY ZALEHA ZAIN AND PARTNER.
COMPANIES
CONTENTS
Types of Companies
Differences between Companies and Partnerships
Advantages of Companies over Partnerships
TYPES OF COMPANIES
Companies in Malaysia are classified according to:
(i) liability or
(ii) private or public status
BY LIABILITY
S.14 (2) Companies Act 1965 (CA) – a company may be:
A company limited by shares;
A company limited by guarantee;
A company limited by shares and guarantee;
An unlimited (liability) company.
FOREIGN COMPANY
S.4(1): ‘Where the company, or corporation, society, association or other body incorporated outside Malaysia, but which carries on business in Malaysia..‘
It is wholly or majority owned (measured in % of shares held) by non-Malaysians.
Such company has to lodge certain documents as laid down in S.332(1) CA 1965 and pay the appropriate fees before commencing the business in Malaysia.
A foreign company registered under the “Companies Act” 1965 has the power to hold immovable property in Malaysia.
Types of companies - Legal Environment of Business - Business Law - Commercia...manumelwin
Chartered companies are those which are incorporated by a Royal Charter. Some of the biggest companies like the East India Company were formed by the Royal Charter in England.
Company Definition, Meaning, Features, Types and StructureThejas Perayil
Company Definition, Meaning, Features of Companies, Companies Act 1956, Types of Companies, Structure of Companies, Hierarchical Structure of a company
Formation of company
Lifting the corporate veil
Company’s management: duties and liabilities of company directors and other officers
White collar crime
Corporate scandal
Whistle blowing
This material is a part of our PGPSE programe. Our programme is available for any student after class 12th / graduation. AFTERSCHO☺OL conducts PGPSE, which is available free to all online students. There are no charges. It is designed to give a comprehensive training in social entrepreneurship / spiritual entrepreneurship. This programme is aimed at those persons, who want to ultimately set up their own business enterprises which can benefit society substantially. PGPSE is a unique programme, as it combines industry consultancy, business solutions and case studies in addition to spirituality and social concerns. You can read the details at www.afterschoool.tk or at www.afterschool.tk
Market trend analysis of national stock exchange of india Divya Jyoti Arya
DECLARATION
I, Divya Jyoti Arya, Student of BBA III year(Finance) Batch 2008-2011 at G.H RAISONI COLLEGE OF COMMERCE & SCIENCE TECHNOLOGY, Nagpur, declare that the project work entitled “Market Trend Analysis of National Stock Exchange of India” was carried by me in the partial fulfillment of BBA program under the University of Nagpur.
This project was undertaken as a part of academic curriculum according to the university rules and norms and it has not commercial interest and motive. It is my original work. It is not submitted to any other organization for any other purpose.
Industrial Management, the new subject intorduced in the field of engineering. By looking this pptx. one can gain the overall idea of basics of management and its industrial approach.
This presentation makes an attempt to help a lay man understand briefly the various forms of business organisations prevalent in the Indian Business world.
Post your response to the following focus questionsDescribe a sol.pdffootsmart1
Post your response to the following focus questions:
Describe a sole proprietorship and discuss its advantages and disadvantages.
Describe a partnership and discuss its advantages and disadvantages.
Describe a corporation and discuss its advantages and disadvantages.
Describe an S corporation and discuss its advantages and disadvantages.
Solution
Broadly speaking for conducting any type of Business activity we require to have a Business
entity. If the Business entity is owned and operated and managed by a single paerson then such
Business entity is called a sole Proprietorship. It is most simple and subjected to least terms &
conditions governing the business activities. The main disadvantages includes personal liability
of the owner/ propreitor, which is unlimited. A single person being at the helm of affairs poses
limitations on the development and growth of the business. Propreitorship has its death with the
death of the owner.
A Partnership as the word suggest is that form of Business entity which is owned by two or more
persons and formed under an agreement signed by all owners for some common purpose/ goal
and or objectives. A partnership firm is more complicated than the sole propreitorships, two or
more persons as owners may give advatages of sharing resources, knowledge, skills which are
essential for setting up of businesses of sizes unmanageable by a single person. Pooling diversity
of partners helps in the development and growth of the Business entity. Like sole propreitorship,
the partners under partnerships may be subjected to unlimited liabilities under or arising out of
the business activities of the Partnership firm. There are additional set of rules & regulations
under the law of the land governing the partnership firms.
The third and the most prefered form of business entity is an incorporated firm called corporation
and or company. A corporation/ company is different from its owners. This form of business
entity draws difference between the owner and management of the business entity. Unlike the
earlier set ups of Sole Propreitor and Partnership, the business activies are conducted neither by
sole owner nor by partners but managers who are considered to be having different identity than
the business entity which is also considered as a legal person. A corporation can be sued and it
can also sue others in the court of law.A corporation comes into existence with its incorporation
documents such as Memorandum of Understanding, Articles of Associations, Delegation of
Powers etc. These documents required for giving birth to the corporation varies from state to
state, nation to nation, lews of the land under whose jurisdiction it falls. The main advantage of a
corporation is to give limited liability to its owners who are called share holders and its business
activities are conducted by the professionals having required qualifications and skills. Just like its
birth, its death is not related to that of its share holders (owners).
Types of various business Organizations, includes Sole Proprietor, Partnership, Societies, Joint Stock Companies, Hindu Undivided Family Business in India
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Improving profitability for small businessBen Wann
In this comprehensive presentation, we will explore strategies and practical tips for enhancing profitability in small businesses. Tailored to meet the unique challenges faced by small enterprises, this session covers various aspects that directly impact the bottom line. Attendees will learn how to optimize operational efficiency, manage expenses, and increase revenue through innovative marketing and customer engagement techniques.
Attending a job Interview for B1 and B2 Englsih learnersErika906060
It is a sample of an interview for a business english class for pre-intermediate and intermediate english students with emphasis on the speking ability.
Falcon stands out as a top-tier P2P Invoice Discounting platform in India, bridging esteemed blue-chip companies and eager investors. Our goal is to transform the investment landscape in India by establishing a comprehensive destination for borrowers and investors with diverse profiles and needs, all while minimizing risk. What sets Falcon apart is the elimination of intermediaries such as commercial banks and depository institutions, allowing investors to enjoy higher yields.
The world of search engine optimization (SEO) is buzzing with discussions after Google confirmed that around 2,500 leaked internal documents related to its Search feature are indeed authentic. The revelation has sparked significant concerns within the SEO community. The leaked documents were initially reported by SEO experts Rand Fishkin and Mike King, igniting widespread analysis and discourse. For More Info:- https://news.arihantwebtech.com/search-disrupted-googles-leaked-documents-rock-the-seo-world/
As a business owner in Delaware, staying on top of your tax obligations is paramount, especially with the annual deadline for Delaware Franchise Tax looming on March 1. One such obligation is the annual Delaware Franchise Tax, which serves as a crucial requirement for maintaining your company’s legal standing within the state. While the prospect of handling tax matters may seem daunting, rest assured that the process can be straightforward with the right guidance. In this comprehensive guide, we’ll walk you through the steps of filing your Delaware Franchise Tax and provide insights to help you navigate the process effectively.
Putting the SPARK into Virtual Training.pptxCynthia Clay
This 60-minute webinar, sponsored by Adobe, was delivered for the Training Mag Network. It explored the five elements of SPARK: Storytelling, Purpose, Action, Relationships, and Kudos. Knowing how to tell a well-structured story is key to building long-term memory. Stating a clear purpose that doesn't take away from the discovery learning process is critical. Ensuring that people move from theory to practical application is imperative. Creating strong social learning is the key to commitment and engagement. Validating and affirming participants' comments is the way to create a positive learning environment.
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[Note: This is a partial preview. To download this presentation, visit:
https://www.oeconsulting.com.sg/training-presentations]
Sustainability has become an increasingly critical topic as the world recognizes the need to protect our planet and its resources for future generations. Sustainability means meeting our current needs without compromising the ability of future generations to meet theirs. It involves long-term planning and consideration of the consequences of our actions. The goal is to create strategies that ensure the long-term viability of People, Planet, and Profit.
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2. Explore the sustainability implementation model, focusing on effective measures and reporting strategies to track and communicate sustainability efforts.
3. Identify and define best practices and critical success factors essential for achieving sustainability goals within organizations.
CONTENTS
1. Introduction and Key Concepts of Sustainability
2. Principles and Practices of Sustainability
3. Measures and Reporting in Sustainability
4. Sustainability Implementation & Best Practices
To download the complete presentation, visit: https://www.oeconsulting.com.sg/training-presentations
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RMD24 | Debunking the non-endemic revenue myth Marvin Vacquier Droop | First ...BBPMedia1
Marvin neemt je in deze presentatie mee in de voordelen van non-endemic advertising op retail media netwerken. Hij brengt ook de uitdagingen in beeld die de markt op dit moment heeft op het gebied van retail media voor niet-leveranciers.
Retail media wordt gezien als het nieuwe advertising-medium en ook mediabureaus richten massaal retail media-afdelingen op. Merken die niet in de betreffende winkel liggen staan ook nog niet in de rij om op de retail media netwerken te adverteren. Marvin belicht de uitdagingen die er zijn om echt aansluiting te vinden op die markt van non-endemic advertising.
Personal Brand Statement:
As an Army veteran dedicated to lifelong learning, I bring a disciplined, strategic mindset to my pursuits. I am constantly expanding my knowledge to innovate and lead effectively. My journey is driven by a commitment to excellence, and to make a meaningful impact in the world.
1. • Characteristics features of business
• Features and evaluation of Sole Proprietorship
• Partnership
• Joint-Stock Companies
• Public Enterprises and their types
•Changing Business Environment in Post-Liberalization scenario
3. FORMS OF BUSINESS ORGANIZATION
The following are the forms of business organization
based on ownership:
(a) Sole trader or Proprietorship
(b) Partnership
(c) Joint Stock Company
(d) Co-operative society
4. (a) Sole Trader or Proprietorship
The sole trader is the simplest, oldest and natural form
of business organization.
It is also called sole proprietorship.
‘Sole’ means one; ‘Proprietor’ means owner
‘Sole Trader or Proprietor’ implies that there is only
one trader who is the owner of the business
5. Features of Sole Trader or Proprietor
It is easy to start a business under this form and also easy to
close.
He introduces his own capital.
He enjoys all the profits and in case of loss, he alone suffers.
He has unlimited liability which implies that his liability
extends to his personal properties in case of loss.
Little legal hassles to be observed by a sole trader. Except in
such business where licenses are required for ex: Medical
shops, Hotels and etc.
6. Continued..
All is he and he is all in all.
Business secrets can be guarded well.
Total operational freedom. He is owner, manager and
controller.
He can take decisions very fast and implement them
promptly.
High degree of flexibility to shift from one business to the
other.
7. Sole Trader (or) Proprietorship Advantages and Disadvantages
ADVANTAGES
1. Easy to start & easy to close
2. Personal contact with customers
directly
3. Prompt decision making
4. High degree of flexibility
5. Secrecy
6. Low rate of taxation
7. Direct motivation
8. Minimum interference from
government
9. Total control
DISADVANTAGES
1. Unlimited Liability
2. Limited amount of Capital
3. No Division of Labor
4. Uncertainty
5. Inadequate for growth and expansion
6. Lack of specialization
7. More Competition
8. Low Bargaining Power
8. PARTNERSHIP
When there are like-minded persons with resources, they
can come together to do the business and share the
profits/losses of the business in an agreed ratio.
Persons who have entered into such an agreement are
individually called ‘partners’ and collectively called ‘firm’
The relationship among partners is called ‘partnership’.
Indian Partnership Act, 1932 defines partnership as the
relationship between two or more persons who agree to
share the profits of the business carried on by all or any
one of them acting for all.
9. Features of Partnership
Relationship: Relationship among person based on
agreement.
Two or more person: There should be two or more persons.
There should be a business: Business should be conducted.
Agreement: Persons should agree to share the profits/losses
of the business.
Carried on by all or any one of them acting for all: Business
can be carried on by one person who is called the agent for
all the other person and the partnership is called
‘partnership’
10. Other Features
Unlimited Liability: The liability of the partners is unlimited. The partnership
and partner, in the eye of law are not different but one and same. Hence, the
partners have to bring their personal assets to clear the losses of the firm.
Number of Partners: According to the Indian Partnership Act, minimum 2
partners in both banking and non banking business and maximum 10 partners
in banking and 20 partners in non-banking business.
Division of labour: Because there are more than two persons, the work can be
divided among the partners based on their aptitude.
Personal Contact with customers: The partners can continuously be in
touch with the customers to monitor their requirements.
Flexibility: All the partners are likeminded persons and hence they can take
any decision relating to business.
11. Other Features (Continued)…
Joint and Several Liability: All the partners are equally
responsible
Implied Authority: The act of every partner is deemed to be
an act of the firm. Hence he has to take the consent of other
partners before taking any decision.
Transferability of share/interest: The partners cannot
transfer their share/interest in partnership in the firm to
others without the consent of the other partners.
Dissolution: the closure of partnership is called ‘dissolution’.
When any of the partners die, becomes insolvent or
insane, the partnership is said to be dissolved. This means
that the duration of the partnership is not certain. The
remaining partners can, if they are interested, restart their
business with a new name.
12. What is a Partnership Deed?
The written agreement among the partners is called ‘the partnership deed’. It
contains the terms & conditions governing the working of partnership.
It contains :
1. Names & Addresses of the firm and partners
2. Nature of business proposed.
3. Amount of capital of the partnership and the ratio for contribution by each of the
partners
4. Duration of business
5. Their profit sharing ratio (used for sharing losses also)
6. Procedure for dissolution of firm
7. The amount of salary or commission payable to any partner
8. special rights, obligations and liabilities of partner(s) if any.
13. Kinds of Partners
Active Partner: Actively takes part in the affairs of the
partnership.
Sleeping Partner: Contributes capital but doesn’t take part
in the affairs of the partnership.
Nominal Partner: Nominal partner is partner just for
namesake. He neither contributes to capital nor takes part
in the affairs of business. People with good business
connections and well placed people in the society are
chosen.
14. Kinds of Partners (Continued)…
Partner by Estoppel: Partner by Estoppel gives an impression to
outsiders that he is the partner in the firm. In fact he neither contributes
to capital, nor takes any role in the affairs of the partnership. Because he
has misled the outsiders, partner by estoppel is held liable for the
claims, if any, of the outsiders.
Partner by Holding out: If partners declare a particular person (having
social status) as partner and this person does not contradict even after
he comes to know such declaration, he is called a partner by holding out
and he is liable for the claims of third parties.
Minor Partner: Minor has a special status in the partnership. A minor
can be admitted for the benefits of the benefits of the firm. A minor is
entitled to his share of profits of the firm. The liability of a minor
partner is limited to the extent of this contribution of the capital of the
firm.
15. (c) Joint Stock Companies
A joint stock company is described as a voluntary association
of persons recognized by law, having a distinct name, a
common seal, formed to carry on business for profit, with
capital divisible into transferable shares, limited
liability, corporate body and perpetual succession.
In brief, it is like an artificial person created by law with
perpetual succession and common seal.
Section 3 (1) of the Companies Act, 1956 defines a company as
“COMPANY FORMED AND REGISTERED UNDER THE ACT”
16. Features of Joint-Stock Companies:
Artificial Person: The company has no form or shape. It is
an artificial person created by law. It is intangible, invisible
and existing only in the eyes of law.
Separate legal existence: It has an independent existence.
It is separate from its members. It can acquire the assets. It
can sue others if they are in default in payment of
dues, breach of contract with it, if any. Similarly, it can be
sued by outsiders for any claim. A Shareholder is not liable
for the acts of the company.
Voluntary Association of persons: The company is an
association of voluntary association of person who want to
carry on business for profit. To carry on business, the y need
capital. So they invest in the share capital of the company.
17. Features of Joint-Stock Company (Continued)…
Limited Liability: The Shareholders have limited liability
i.e., liability limited to the face value of the shares held by
him.
Capital is divided into shares: The total capital of the
company is divided into units. Each unit is called a share.
The price of each share is priced so low that every investor
would like to invest in the company.
Transferability of shares: In the company f0rm of
organization, the shares can be transferred from one
person to another. A share holder of a public compnay can
sell his holdings of shares. However, a share holder of a
privat company can not sell his holdings of shares.
18. Features of Joint-Stock Company (Continued)…
Common seal: As the company is an artificial person
created by law has no physical for, it cannot sign its
name on a paper. So, it has a common seal on which its
name is engraved. Every document or contract should
be affixed by the common seal, otherwise the company
is not bound by such a document or contract.
Perpetual Succession: Members may come and
members may go, but the company continues for ever
and ever.
19. Features of Joint-Stock Company (Continued)…
Ownership and Management separated: The
shareholders are spread over the length and breadth of the
country, and sometimes, they are from different parts of
the world. To facilitate administration, the shareholders
elect some among themselves or the promoters of the
company as directors to a board, which looks after the
management of the business.
Winding Up: Winding up refers to the putting an end to
the company. Because law creates it, only law can put an
end to it in special circumstances such as representation
from creditors or financial institutions. The company is not
affected by the death or insolvency of any of its members.
20. Kinds of Companies:
I. Kinds of companies based on incorporation:
1. Chartered Company
2. Statutory Corporation
3. Registered Company
II. Kinds of companies based on public interest:
1. Private Limited Company
2. Public Company
III. Kinds of companies based on liability:
1. Unlimited Company
2. Limited Company
3. Companies limited by guarantee
IV. Kinds of companies based on interest:
1. Holding Company
2. Subsidiary Company
V. Kinds of Companies based on nationality:
1. Foreign Company
2. Indian Company
21. Kinds of companies based on incorporation:
Chartered Company: Created by the Royal Charter of the
state. Charter contains the rights, privileges, powers etc..
Example: British East India Company formed in England in
1600 to trade with India and East.
Statutory Corporation: Created by an Act of the state
legislature or parliament. The
objective, scope, powers, responsibilities are clearly defined
by the act. Example: Industrial Development Bank of India
(IDBI), Food Corporation of India (FCI), APSRTC.
Registered Company: A registered company is one that is
registered under Indian Companies Act, 1956. A Registered
Company may be public limited company, private limited
company, government company, company limited by
guarantee or unlimited company.
22. Kinds of Companies based on public interest:
Private Limited Company: According to sec. 3 of
Indian Companies Act, a private company means a
company that has a minimum paid up capital of one
lakh rupees or such higher paid up capital as may be
prescribed, and by its articles
(a) Restricts the right of transfer its shares, if any
(b) Limits the number of its members to fifty
(c) Prohibits any invitation to the public to subscribe
any shares in or debentures of, the company
(d) The name of a private company should necessarily
end with the words ‘private limited’ (Pvt. Ltd.).
23. Kinds of Companies based on Public interest:
Public Company: This means a company that
(a) Is not a private company
(b) has a minimum paid up capital of five lakh rupees or
such higher paid up capital, as may be prescribed.
(c) Can have any number of members but
minimum, there should be seven members
(d) Can issue the prospectus to raise the capital
(e) The name of the public company ends with the word
‘limited (Ltd.)
24. Distinction between Public company and Private company:
Points of difference Public Company Private Company
1. Minimum and
Maximum number of
members
Minimum 7
Maximum: Unlimited
Minimum 2
Maximum: 50
2. Transfer of Shares No restrictions Restricted
3. Issue of Prospectus Prospectus can be issued Prohibited from issue of
Prospectus
4. Acceptance of deposits Can Accept Prohibited from accepting
deposits from public.
However, it can accept
deposits from its
members, directors or
their relatives
5. Minimum Paid up
Capital
Rs. 5 lakh or higher, as
prescribed
Rs. 1 lakh or higher, as
prescribed
25. Kinds of companies based on public interest:
Government Company: Section 617 of Indian
Companies Act, 1956 defines a government company as
“any company in which not less than 51 percent of paid-
up share capital is held by central government, or by
any state government.
Example: National Thermal Power Corporation (NTPC)
Bharat Heavy Electricals (BHEL)
Hindustan Machine Tools (HMT)
Steel Authority of India (SAIL)
26. Kinds of Companies based on Liability:
Unlimited Company: An unlimited company is a
company in which the liability of every member is
unlimited. This implies that the personal property of every
member is also liable for the debts of the company.
Unlimited Companies are rarely found in practice even
though as per Indian Companies Act, Unlimited
Companies can be incorporated.
Limited Company: A company is said to be limited
liability company where the liability of its member is
limited by the unpaid amount on the shares respectively
held by them.
Companies Limited by Guarantee: A Company is said
to be limited by guarantee where the liability of the
members is limited to such an amount as they agreed upon
to contribute to the assets of the company in event of being
wound up.
27. Kinds of companies based on controlling
interest:
Holding Company: A Holding company is a company
that controls the composition of the board of directors
of another company or holds more than half of the
nominal value of the equity share capital of another
company.
Subsidiary Company: A Subsidiary company is that
company that is controlled by the holding company.
28. Formation of a joint stock company (or) Procedure for
incorporation of company:
There are two stages in the formation of a joint stock
company. They are:
(A) To obtain Certificate of Incorporation
(B) To obtain Certificate of Commencement of
business
- The Certificate of Incorporation is just like a ‘date of
birth’ certificate. It certifies that a company with such
a name is born on a particular date
- Where as, Certificate of Commencement of Business
authorizes a public company to start its commercial
operations officially.
29. (Continued)…
A private company can start it’s commercial operations
immediately after obtaining a Certificate of
Incorporations.
However, A Public Company has to obtain a Certificate
of Commencement of Business to start commercial
operations
The persons who conceive the idea of starting a
company and who organize the necessary initial
resources are called Promoters. The vision of the
promoters form the backbone for the company.
30. Obtaining Certificate of
Incorporation:
The promoters have to file the following
documents, along with necessary fee, with the
Registrar of Joint Stock Companies to obtain
Certificate of Incorporation.
(a) Memorandum of Association
(b) Articles of Association
(c) Prospectus
31. (a) Memorandum of Association:
Also called the charter or constitution for the company.
It lays down in precise and clear terms the objectives of the
company, defines the scope of its operations and its relations
with the investors and outside world.
The contents of Memorandum of Association are classified
into six clauses. They are:
(i) Name Clause
(ii) Registered or Situation Clause
(iii) Objects Clause
(iv) Liability Clause
(v) Capital Clause
(vi) Subscription Clause
32. (b) Articles of Association:
Articles of Association contains the rules of procedure
for internal management and control of the affairs of
the company.
It is concerned with the procedural matters in
conducting the routine matters of the company.
It supplements the Memorandum of Association and
hence it cannot include that which is prohibited by
Memorandum
The Memorandum of Association – Relationship of
the company with outsiders Whereas, The Articles of
Association – Rules of procedure in the internal
management and control of he affairs of the company.
33. Contents of Articles of Association:
Amount of share capital and different types of capital
Methods of increase, reduce or alter capital
Different types of shares, their respective
rights, conversion of shares
Procedure in respect of transfer and transmission of
shares
Procedure in conducting board meetings and general
body meetings
Powers, rights and duties of directors in board
Procedure in appointment and removal of a director
Remuneration of directors
Procedure for winding up
34. (c) Prospectus
Prospectus is the first and basic document that
supports the structure of the company. An investor will
go through prospectus to assess the feasibility of his
investment in the company.
It is generally defined as a
‘notice, circular, advertisement that discloses full
information relating to the amount of shares
issued, the rights attached to each type of shares
issued etc..
35. Contents of Prospectus:
The following are the contents of the prospectus:
(a) The name of the company and addresses of its registered
office
(b) the nature and business of the company
(c) the main objectives of the company
(d) the number and types of shares and debentures issued in the
past
(e) the list of promoters with their names, addresses
(f) the list of directors with their names, addresses and
occupations
(g) Opening and closing date of public offer
(h) details of the brokers, underwriters, merchant bankers etc.
(i) Rights and restrictions as applicable to each class of shares.
(j) Minimum number of shares to be applied and how much is to
paid per share on application
36. ADVANTAGES OF JOINT STOCK COMPANY:
Mobilization of larger resources
Separate legal entity
Limited Liability
Transferability of shares
Liquidity of investment
Inculcates the habit of savings and investments
Democracy in management
Economies of large scale production
Continued existence
Institutional Confidence
37. DISADVANTAGES OF JOINT – STOCK
COMPANIES:
Formation of company is long drawn procedure
High degree of government interference
Inordinate delays in decision making
Oligarchy in management
Lack of initiative
Lack of responsibility and commitment
Conflicting interests
Lobbying with government departments
Higher taxes
38. PUBLIC SECTOR ENTERPRISES
A Public sector enterprise or a public enterprise is one
which is owned, managed and controlled by the Central
Government or any State Government or any Local
Authority.
They are also called as “Public Undertakings” or “Public
Sector Undertakings”.
The forms of organizing enterprises are as follows:
(a) Department Undertaking
(b) Public Corporations
(c) Government Companies
39. Objectives of Public Enterprises:
To achieve rapid economic development through industrial
growth in accordance with the development plans.
To channelize resources in the best possible manner for
economic growth.
To ensure balanced regional development of industry and trade.
To prevent the growth of monopoly and monopolistic tendencies
in the private sector.
To control the prices of essential consumer goods in the market
to prevent public hardship.
To secure public welfare and to reduce inequalities in the
distribution of income and wealth.
40. Departmental Undertakings
Departmental Undertakings is a public enterprise which is
organized, controlled and financed by the government. For Ex: Post &
Telegraphs, Railways etc.
FEATURES OF DEPARTMENTAL UNDERTKINGS:
1. Formation: Created by government attached to a particular ministry
2. No Separate Legal Entity: Cannot sue & Cannot be sued without
government’s consent.
3. Management & Control: Managed & Controlled by the concerned
ministry of the government.
4. Finance: Financed by government
5. No Borrowing Power
6. No Authority to use revenue: Revenues are paid into the treasury.
41. Public Corporation:
Public corporation is an autonomous organization, which is established by a
Special Act of the Center or State Legislature. This Special Act defines its
powers, duties, functions. It is also known as Statutory Corporation. Ex:
LIC, Air India, SBI etc.
FEATURES OF PUBLIC CORPORATION:
Formation: Created by a special act of central or state legislature
Separate Legal Entity: Has a separate legal entity.
Management and Control: Managed by Board of Directors which is
constituted according to the provisions of the Special Act.
Finance: Financed by Government
Borrowing Powers: Has the power to borrow funds from govt
Authority to use Revenue: can use revenue to meet its expenditure
42. Government Company:
A Government company is a company in which at least 51 % of
the paid up share capital are held by:
(a) Central Government (b) State Government (c) Partly by central
and partly by one or more state governments
Government Company includes HMT, BHEL etc.
FEATURES OF GOVERNMENT COMPANY:
1 Formation: formed complying with the provisions of companies
Act of 1956
2. Separate Legal Entity: It has a separate legal entity
3. Management & Control: Managed by Board of Directors
elected by shareholders
4. Ownership: 51% Ownership by State, Central or both
5. Finance: Funded by government or public
6. Has borrowing Powers
7. Power to use Revenue
43. Forms of Public Enterprises: Features at a Glance
Features Departmental
Undertaking
Public
Corporation
Government Company
1. Formation Executive Order of
Govt
Statute of
Parliament or State
Legislature
Registered under
Companies Act, 1956
2. Legal Position An extension to a
govt department
Separate legal
entity
Separate legal entity
3. Finances Budget of the
concerned ministry
Government
Provides the initial
capital
Govt provides a minimum
of 51% of capital and the
balance is raised from
public
4. Degree of
Autonomy
Nil Fairly Good High
5. Power to
recruit staff
Manned by govt
employees and civil
servants
It can recruit its
own staff
It can recruit its own staff
44. Forms of Public
Enterprises
Features Departmental
Undertaking
Public
Corporation
Government
Company
6. Control
Mechanism
Controlled by the
officials of the
concerned
Ministry
Government
nominates the
directors
Government
appoints the
directors
7. Power to borrow It can borrow
subject to prior
approval of
government
It can borrow from
government and
also from public
It can borrow from
government and
also from public
8. Flexibility Nil. It has to
adhere to the rules
and regulations of
the ministry
More flexibility in
its internal
operations within
the framework of
the statute
Total flexibility. It
can frame its own
rules and
regulation