3. Assignment-1
Q.1 Write Short Notes:
1. Public Company
2. Private Company
3. Foreign Company
4. Government Company
Q.2 Conversion of Private
Company into Public
Company
• Incorporation/Registration
• Basic Information
• Pros & Cons
5. CHARTERED
COMPANIES
In the 17th and 18th centuries, chartered companies could be
established under a special Royal charter issued by the king.
These are incorporated under a special charter by a monarch.
Example: The East India Company and
The Bank of England of chartered companies
incorporated in England. The charter defined their powers and
area of operation.
6. REGISTERED
COMPANIES
The Company formed/incorporated under the Company’s Act 1956
or any other Company’s Act passed earlier is called a Registered
Company.
Such co. came into existence only when they are registered under
the Act and a certificate of incorporation has been issued by the
registrar.
Every co. registered under the Act has to prepare a memorandum.
Registered co. may further divided into 4 sub category.
7. liability of members
Companies limited by shares
Companies limited by guarantee
not requiring large-scale capital
non-trading companies are formed with a guarantee capital
These types of companies are formed for the promotion of art,
science, culture and sports etc
Company’s purpose
Such companies may be registered with or without a share
capital.
Unlimited liability companies
8. number of members
1. Private Companies
As per Section 3 of the Act. “ Private Company ” means a Company which,
by its articles…
Restricts the right of transfer of its share,
Limits the number of its members between 2 to 50 and
Prohibits any invitation to the public to subscribe for
any shares or debentures of the company.
9. 2. Public Company:
A “ Public Company ” means a company , which is not
a Private company.
The shares of company’s members are fully transferable.
The minimum number of members required in public company is
seven (Maximum, no limit) .
Company can invite the general public for the subscription of its
shares and debentures
10. Control
Government company
Either central or state government held 51 % or more than 51 % share of any
company, it is known as a Government Company. A company subsidiary of a
government company is also a government company.
Holding company & Subsidiary company
13. Stipulates that the Articles of a private company shall provide for
four restrictions:-
Restrictions on transfer of shares;
Restrictions on invitation to public to subscribe to the shares or
debentures of the company;
Restrictions on the maximum number of members which should not
exceed 50 excluding members who are employees or ex-employees
of the company; and
Prohibition on any invitation or acceptance of deposits from
persons other than its members, directors or their relatives.
14. It shall pass a sp. Resolution. To alter its articles so as to eliminate the
provisions relating to a pvt. Co.
Within 30 days, prospectus or a statement in lieu of a prospectus
together with a copy of special resolution and a copy of special
resolution and a copy of altered articles should be filed with the
registrar.
It shall increase the no. of members to at least 7 if it is less than 7. and
also increase the no. of directors to 3.
The co. shall have to increase its paid-up capital to at least rs 5 lakh.
It shall delete the word “PRIVATE” from its name.
The company shall cease to be a private company from the date of the
alteration.
15. There are 4 circumstances mentioned, which would force a pvt
co. to become a public co.
1. Where 25% more its paid-up share capital is held by 1 or
more bodies corporate or public co.
2. Where the average annual turnover is more than 25 crores for
3 consecutive financial years.
3. Where a pvt. Co. holds out more than 25% of the paid- up
share capital of a public co.
4. Where the pvt. Co. accepts by invitation or renew deposits
from the public, other than from its members or directors and
their relatives, than the pvt. Co. will become a public co., the
day it accepts the deposits.
17. Begins with potential business idea.
Certain feasibility test/studies are conducted to
determine the idea can be profitably exploited.
In case the test results in favorable results, promoters
may decide to form the co.
The person who conceive the business idea, decide to
form a co. take necessary steps for the same, and
assume associated risks, are called promoters.
18. Minimum paid-up capital
Number of members
Every directors of a company is required to obtain a unique
identification number called DIN from Ministry of Corporate
affairs.
19. Submission of application for name availability.
Online form submission i.e form no. 1A to RoC to ascertain
the availability of the name along with filing fee of 500.
The application should mention at least 4 names up to 6.
Once the promoter gets name approved from the RoC, it
will remain valid for the period of 6o days, however they
can apply for the revalidation of name for further 30 days
on payment of rs. 250 as filling fee.
20. Drafting of MoA and AoA of the co.
Stamping and dating of MoA & AoA.
The MoA and AoA should be stamped as per indian stamp act and at the
notified rate as per provisions of stamp duty rates of that state.
The MoA and AoA should be subscibed by at least 2 persons in case of pvt. Ltd.
Co. and 3 in case of public ltd co.
Each subcriber should take atleast 1 share and will wite opposite to his name
the number of shares he takes.
All the personal details should be given with his sign. But in the presence of 1
witness.
21. Form – 1 for declaration of compliance the act.
Form -18 for situation of the registered office of the
company
Form – 32 for particulars of directors
22. The RoC shall verify the documents and suggest modifications
wherever required.
If any then it will be e-filed again.
Thereafter, Registrar on being satisfied that all the requirements for
the registration of the co. as laid down under the act and have been
duly complied.
Then he will certify under his hand that Company is incorporated
and issue a certificate of incorporation to the Company.
