Companies
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The document provides a detailed overview of companies, differentiating between private and public companies based on legal definitions, member requirements, capital, and privileges. It outlines the stages involved in forming a company, including promotion, incorporation, and commencement of business. Additionally, the document highlights the unique privileges of private companies over public companies, such as member count and business commencement regulations.
Companies
- 1. BY - ZAID ALAM CLASS - XI-C ROLL - 38
- 2. DEFINATION PRIVATE COMPANY PUBLIC COMPANY DIFFERENCE B/W PUBLIC AND PRIVATE PRIVILAGE TO PRIVATE COMPANY STAGES INVOLVED IN FORMATION OF A COMPANY BIBLIOGRAPHY
- 3. DEFINATION A company is an Association or collection of Individuals, whether Natural persons, Legal persons, or a Mixture of both. Company members share a Common Purpose and Unite in order to Focus their various Talents and organize their Collectively available Skills or resources to Achieve specific or Declared goals. The Shareholders are the Owners of the Company while the Board of Directors is The Chief body Elected By the Shareholders. A Company can be defined as an "artificial person", Invisible, Intangible, Created by or Under law, with a Discrete legal Entity, Perpetual Succession and a Common seal. It is not affected by the Death, Insanity or Insolvency of an Individual member or members.
- 4. PRIVATE COMPANY According to Section 3(1)(iii) of the Companies Amendment Act, 2000, a Private Company means a company which : 1. Has a Minimum paid up Capital of One Lakh Rupees or such higher amount as may be Prescribed by the Government. 2. Has a Minimum of 2 and Maximum of Members of 50 Excluding employees. 3. Restricts the Right of Members to Transfer its shares, If so. 4. Prohibits any Invitation to the General Public to Subscribe for its Shares or Debentures. 5. Does not Invite the Public to Subscribe to its Deposits. For Ex - Industries Pvt. Ltd., Paras Pharmaceutical Pvt. Ltd. etc.
- 5. PUBLIC COMPANY According to Section 3(1)(iv) of the Companies Amendment Act, 2000, a Public Company means a company which: 1. Is not a Private Company; and 2. Has a Minimum Paid up Capital of Five Lakh Rupees or such Higher Amount as may be Prescribed by the Government. 3. Has a Minimum of 7 Members and Maximum numbers of Members is Unlimited. 4. Private Companies may be Called as Corporations, Limited Companies, Limited Liability Companies, Unlimited Companies or other names Depending on Where and How they are Organized and Structured. For Ex -Reliance Industries Ltd., Tata Iron & Steel Co. Ltd., D.C.M. Ltd., etc.
- 6. DIFFERENCE B/W PUBLIC & PRIVATE 1. Minimum Paid-up Capital : A Private Company must have a minimum paid-up capital of Rs. 1,00,000, whereas a Public Company must have a minimum paid-up capital of Rs. 5,00,000. 2. Minimum Number Of Members : Private limited company has minimum 2 members, while Public Company has 7. 3. Maximum Number Of Members : Private Ltd. Company has maximum of 50, whereas there is no restriction of maximum number of members in a Public Company. 4. Commencement Of Business : A Private Company can commence its business immediately after its incorporation, whereas a Private Company cannot start its business until a Certificate to commencement of business is issued to it.
- 7. 5. Number Of Directors : A Private Company may have 2 directors, whereas a Public Company must have at least 3 directors. 6. Transerferability Of Shares : There is complete restriction on the transferability of the shares of a Private Company through its Articles of Association , whereas there is no restriction on the transferability of the shares of a Public company. 7. Quorum Of Company : The quorum in the case of a Private Company is 2 members present personally, whereas in the case of a Public Company 5 members must be present personally to constitute quorum. However, the Articles of Association may provide and number of members more than the required under the Act.
- 8. PRIVILAGES TO A PRIVATE COMPANY Privileges to a private company over a Public Companies are as follows : 1. The Minimum Number of Members in a Private Company Can be Two only But it is Seven in a Public Company 2. A Private Company Need not File a Prospectus or a Statement in Lieu of Prospectus With the Registrar, While a Public Company Needs to File a Prospectus. 4. Private company Need not hold Statutory Meeting or file Statutory Report, while a Government Company needs to hold a meeting. 5. Minimum Number Of Directors is Only two in a Private Company, while in a Government Company there should be 3 Directors. 6. Private company can Commence Business Immediately on Incorporation.
- 9. FORMATION OF A COMPANY 1. Promotion Stage. 2. Incorporation Stage. 3.Commencement of Business Stage.
- 10. PROMOTION The stage of conceiving an idea and its working is termed as promotion of a company. The person involved in this task is termed as “Promoter”. There are certain important decisions which are taken before the formation of the company. Important matters are to be decided before the formation of the company regarding the product to be produced, the size of the company, the capital involved in the project, the sources of the capital and whether it shall be a Private Company or a Public Company and many others things like name approval , appointing professionals, Preparation of necessary documents etc. Feasibility studies is also considered while promotion of a company.
- 11. INCORPORATION Under Incorporation registration of company is made and necessary documents is submitted such as : 1. The Memorandum of Association. 2. The Articles of Association, if any which should be signed by the subscribers to the Memorandum of Association. 3. Any agreement signed with the individual persons who are proposed to be appointed as Managers, Directors or Managing Director of the company. 4. A statement of the nominal capital of the Company. 5. A notice of address of the registered office of the company. 6. A copy of declaration that all the requirements of the Companies Act have been complied with. 7. Approval of the name of the Company. 8. Submission of all the documents after the name of company is registered.
- 12. COMMENCEMENT OF BUSINESS Under this step the company applies to the registrar of company for issue of certificate of commencement of business. The Application is made along with the necessary documents like declaration of the meeting of the minimum subscription requirement, declaration of details in respect of allotment to the directors, a declaration of no money is payable to the applicants and a statutory declaration. If the registrar is satisfied after examining the documents then the certificate of commencement of business is issued . This certificate is conclusive evidence that company is entitled to do the business.
- 13. BIBLIOGRAPHY www.wikipedia.com/comapny?ksad www.slideshare.net/privatecomapnies www.wikienglish.com/corporationofacts Business Studies Textbook Class XI Tulsian’s Help Book Class XI