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Assignment 1 CA

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Lakshay Gera
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9 views12 pages

Assignment 1 CA

Uploaded by

Lakshay Gera
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as PPTX, PDF, TXT or read online on Scribd
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Corporate accounting

ASSIGNMENT -1

Topic-
Types of companies and shares
Made by –
Lakshay gera (2105150002)
What is company
• Company is a legal entity formed by individuals to engage in and operate
business in commercial form.
• Company raises its capital in form of shares and debentures .
• Company contributed by large number of persons are shareholders and the
company owners.
• It is neither possible nor desirable for all shareholders to manage company
so they elect board of directors as their representatives to manage affairs of
company.
• In india, lawful company is only incorporated under Companies Act 2013
and affairs ar governed by provisions of Companies Act 2013.
Types of companies
JOINT STOCK COMPANY

Company limited by
Unlimited company
guarantee

company limited by
shares

Private company public company

one person Section 8


company company
Unlimited company
• Section 2(92) Companies Act 2013 defines unlimited company
as
Company where there is no limit on liability of its members.

• Here, when company suffers loss and it does not have enough
property to pay of its debt ,
Then personal assets of its members are issued to pay its debt.
Company limited by guarantee
• section 2(21) Companies Act 2013 ,
States that
Company having liability of its members ,
In event of its winding up of company ,
Is limited to amount as members undertake to contribute
to assets of company .
Company limited by shares
• Section 2(22) Companies Act 2013 states that
company having liability of its members is limted to nominal value of
shares held by them .

• If members has partly paid shares, they can be forced to pay remaining
Amount during existence or winding up of company.
Company limited by guarantee
• Three types of company limited by share are –
1. private company
Section 2 (68) Companies Act 2013 , Private company is one which its article of
association –
I. Restricts rights to transfer of share
II. Limits number of shareholder to 200 .
III. Prohibits invitation to public to subscribe for securities of company.
IV. Name of the company ends with ‘pvt. ltd.’
Company limited by guarantee
2. Public company
Section 2(71) Companies Act 2013 , states public company is not private company.
I. public company has option to prepare article of association or not .
II. There is no limit on numbers of its members
III. There is no restriction on to transfer its shares.
IV. There is no prohibition for invitation to public to subscribe for securities of
company.
Company limited by guarantee
• Section 2(62) Companies Act 2013
States that OPC is private limited company with one person as its members
In this article of association permits-
I. Only one person who is Indian citizen and ordinary citizen can be member of
OPC.
II. Rule 3 (5) Companies Act 2013 states that OPC can be formed fro business
purpose only .
III. OPC can be converted to public or private company only after 2 years from
date of incorporation.
What is share ?
• A share represents a unit of equity ownership in a company.
• Shareholders are entitled to any profits that the company may earn in the form of
dividends.
• They are also the bearers of any losses that the company may face.
• a shareholder hold a percentage of ownership of the issuing company in
proportion to the shares he has bought.
Types of shares
• Equity Shares -
• These are ordinary shares and comprise the bulk of the
shares being issued by company.
• Equity shares are transferable and are traded actively by
investors in stock markets.
• equity shareholder is entitled to voting rights on company
issues and also have the right to receive dividends.
• These dividends, however, are not fixed.
• Equity shareholders also partake in any losses faced by the
company, limited to the amount they had invested.
Types of shares
• Preference Shares
• Preferential shareholders receive preference in receiving profits of
a company as compared to ordinary shareholders.
• Also, in the event of liquidation of a particular company, the
preferential shareholders are paid off before ordinary
shareholders.

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