FEW ASPECTS FROM COMPANIES ACT

2013
 COMPANIES ACT 2013

ABOUT ACT
It extends to the whole of India
It replaces the old Companies Act, 1956 which was amended lots of time.
The new Act 2013 contains
470 sections
29 chapters
7schedules.
The Ministry of Corporate Affairs has already notified 426 sections and
enforced now.
The first amendment was done in the year 2015 and is called as
Companies (Amendment) Act, 2015
Companies Act, 2013
Classification

Chapters Sections
29 470

Definitions Schedules
95 7

3
 Coverage Areas
COMPANY FEATURES
TYPES OF COMPANIES
 COMPANY

Definition of Company

Indian Company law 2013 section 2(20)defines

the company as
Company is the organisation which is formed
and registered under this Act or any previous
law(companies Act 1956,1913 etc.,)

 COMPANY FEATURES
Separate legal entity
Capital
Limited Liability
Perpetual Succession
Common Seal
Transferability of Shares
Ownership and Management
One man and one vote
 . Separate legal entity :-
Under Incorporation law, a company becomes a
separate legal entity as compared to its members. The
company is distinct and different from its members in
law. It has its own seal and its own name, its assets and
liabilities are separate and distinct from those of its
members. It is capable of owning property, incurring
debt, and borrowing money, employing people, having
a bank account, entering into contracts and suing and
being sued separately.
 Transferability ofShares
Shares in a company are freely transferable,
subject to certain conditions, such that no share-
holder is permanently or necessarily wedded to a
company. When a member transfers his shares to
another person, the transferee steps into the
shoes of the transferor and acquires all the rights
of the transferor in respect of those shares.
CAPITAL
 Limited liability
The liability of the members of the company is limited to contribution to the assets
of the company upto the face value of shares held by him. A member is liable to
pay only the uncalled money due on shares held by him.
Perpetual Succession
A company does not cease to exist unless it is specifically wound up or the task for
which it was formed has been completed. Membership of a company may keep on
changing from time to time but that does not affect life of the company. Insolvency
or Death of member does not affect the existence of the company.
Separate Management:
A company is administered and managed by its managerial personnel i.e. the
Board of Directors. The shareholders are simply the holders of the shares in the
company and need not be necessarily the managers of the company.
 Common Seal
A company is an artificial person and does not have a physical presence. Thus, it
acts through its Board of Directors for carrying out its activities and entering into
various agreements. Such contracts must be under the seal of the company. The
common seal is the official signature of the company. The name of the company
must be engraved on the common seal. Any document not bearing the seal of the
company may not be accepted as authentic and may not have any legal force.
One Share-One Vote:
The principle of voting in a company is one share-one vote i.e. if a person has 10
shares, he has 10 votes in the company. This is in direct distinction to the voting
principle of a co-operative society where the "One Member - One Vote" principle
applies i.e. irrespective of the number of shares held, one member has only one
vote.
 TYPES OF COMPANIES
CLASSIFICATION ON THE BASIS OF
INCORPORATION
NUMBER OF MEMBERS
LIABILITY
CONTROL
OWNERSHIP
 ON THE BASIS OF INCORPORATION
CHARTER COMPANIES
STATUTORY COMPANIES
REGISTERED COMPANIES
Statutory Companies: These are constituted by a special Act of
Parliament or State Legislature.
Examples of these types of companies are Reserve Bank of India,
Life Insurance Corporation of India, etc.
Accounts are audited by comptroller of auditor general.

Registered Companies: The companies which are incorporated

under the Companies Act, 2013 or under any previous company law
 ON THE BASIS OF NUMBER OF MEMBERS
Private Companies and
Public Companies
Private Companies
A company which has a minimum paid-up capital of Rs
1,00,000
or such higher paid up capital as may be prescribed, and by
its articles
. Restricts the right to transfer its shares,
.Limits the number of its members to 200
Prohibits any invitation to the public to subscribe for any
shares in, or debentures of, the company,
 Contd
Private Company Divides Into One Person Company And Small Company.
One person company
One Person Company is a company with only one person as a member. That one
person will be the shareholder of the company. It avails all the benefits of a private
limited company such as separate legal entity, protecting personal assets from
business liability, and perpetual succession. One Person Company (OPC) is a
Company registered with ONLY ONE PERSON as its shareholder. An OPC is classified
as a private company under Companies Act.

Member is one
Directors are minimum one
Member should be resident of india
Cannot be converted into other forms of company within 2 years of incorporation.
Small company
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SMALL COMPANY PRIVILAGES

other than public

company

Paid up capital < 50 lacs

(prescribed <5 Crores)

Turn over < 2 crores (

prescribed < 20 crores)

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 Paid up capital is less than are equal to 50
lakhs.
Last year turnover is less than 2 crores.
Exceptions are given to holding and subsidary
companies,non profit organisations ,special
Act etc.,
 Public company
A public company means a company which-
(a)has a minimum paid-up capital of Rs. 5 lakh
or such higher paid-up capital, as may be
prescribed
Minimum mubers is 7 maximum is unlimited
No restructions on transfer of shares
 ON THE BASIS OF LIABILITY
a company limited by shares; or
a company limited by guarantee; or
an unlimited company.
LIMITED BY SHARES:
Where the liability of the members of a company is limited to the amount unpaid on the shares ,it
is known as company limited by shares. If the shares are fully paid, the liability of the members
holding such shares is nil. It may be a public or a private company. Where the liability of the
members
LIMITED BY GUARANTEE
A company that has the liability of its members limited to such amount as the members may
respectively undertake, by the memorandum, to contribute to the assets of the company in the
event of its being wound-up, is known as a company limited by guarantee
Companies with unlimited liability
In this type of company, the members are liable for the companys debts in proportion to their
respective interests in the company and their liability is unlimited
 on the basis of CONTROL
Holding companies
A company is known as the holding company of another
company if it has the control over that other company
if it holds more than 50% of total share capital ,
If it controls composition of board of directors of other
company.
Tata steel, TCS,Tata motors are subsidiary of TATA SONS LTD.
Subsidiary company
A company is known as a subsidiary of another company
when control is exercised by the holding company over the
former called a subsidiary company.
 Associate company
It is not a subsidary
At least 20% share capital or of business
decision.
 Associate Company

Not a SI means
subsidiary control of
Has significant 20% of total
influence Share capital

Business
Includes JV decisions under
agreement

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 On the basis of ownership
Government company
Foreign company
Government company
Government company
A government company means any company in which not less than 51%
of the paid-up share capital is held by-a) The central government, orb) Any
state government, or governments, orc) Partly by central government and
partly by one or more state government.
Auditors are appointed by comptroller of auditor general. (CAG)
Ex. NTPC,AIR INDIA.
.Foreign company
It means any company incorporated outside India which has an
established place of business in India.
COCO COLA,Mc Donalds.
 Dormant Company

Application to ROC Has no Significant

accounting transaction

Company inactive company

incorporated for
Future project
Hold asset or IP

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