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Company

Company. Features of Company. Separate legal entity Limited liability Perpetual succession Common seal Transferability Separate property Capacity to sue. Kinds of Company. Statutory companies Registered companies Limited companies Limited by guarantee Unlimited companies

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Company

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  1. Company

  2. Features of Company • Separate legal entity • Limited liability • Perpetual succession • Common seal • Transferability • Separate property • Capacity to sue

  3. Kinds of Company • Statutory companies • Registered companies • Limited companies • Limited by guarantee • Unlimited companies • Private limited • Public limited • Holding company

  4. Kinds of Company • Subsidiary company • Government • Foreign company

  5. Formation of Company • Steps for incorporation • Memorandum of association • Articles of association • The agreement if any proposing an individual as Managing director • A list of directors who agreed to be the first directors • Declaration

  6. Formation of Company • Steps for commencement of business • Prospectus or a statement in lieu of prospectus • Minimum subscription • Directors have paid application and allotment money • Situation of registered office • Final declaration

  7. Advantages of Company • Limited liability • Capital • Public confidence • Perpetual existence • Economies of large scale • Democratic principles • Ensures liquidity • Benefits to the society

  8. Memorandum of Association • Name clause • Registered clause • Object clause • Capital clause • Liability clause

  9. Articles of Association • Share capital • Lien on shares • Call on shares • Transfer of shares • Transmission of shares • Forfeiture of shares • Conversion of shares into stock • Share warrants

  10. Articles of Association • Alteration of capital • General meetings • Voting rights • Directors • Dividends and reserves • Borrowing powers • Capitalization of profits • Winding up

  11. Prospectus • Contents • Part I of Schedule II • General information – Name & address, Stock exchanges for listing, punishment for fictitious application, Min subscription, refund, opening & closing dates, auditors & lead managers, trustees, CRISIL rating, underwriting • Capital structure

  12. Prospectus • Terms of the issue • Particulars of the issue • Company Management • Risk factors Part II of Schedule II • General information – Consent of directors, experts opinion, change of directors, resolution for issue, names & address of key personnel

  13. Prospectus • Financial information • Report by Chartered Accountant • Statutory information, issue expenses, issue other than for cash, revaluation of assets if any • Reasonable time and place for inspection of key documents • Statement by experts • Disclosure by SEBI

  14. Winding of Company Modes of winding up • Compulsory • Voluntary winding up – Members, Creditors • Subject to supervision of court

  15. Winding of Company Compulsory • Special resolution • Default in delivering the statutory report or holding the SM • Failure to commence or suspends business • Reduction in membership • Inability to pay its debts – demand for payment, Decreed debt unsatisfied, Commercial insolvency

  16. Winding of Company Compulsory • Just & equitable – Substratum of company is gone, object of the company failed • Business can be carried on only for losses • Assets are insufficient to meet its existing liabilities • Oppression of minority interest • Dead lock in management • Public interest prejudiced • Illegal business

  17. Petition for Winding of Company • By company • By creditors • By contributors • By all the parties together • By registrar • By central govt

  18. Consequences of Winding up order • Intimation to Registrar • Copy of the order to be filed to the registrar • Suits stayed • Powers of the court • Effect of winding up order

  19. Voluntary Winding up • By ordinary resolution • By special resolution

  20. Member’s Voluntary Winding up • Declaration of solvency • Appointment of liquidator • Board powers to cease on appointment of liquidator • Power to fill vacancy • Notice of appointment of liquidator to registrar • Call creditors meeting in case of insolvency • Call general meeting at the end of each year • Final meeting and dissolution

  21. Creditor’s Voluntary Winding up • Meeting of creditors • Notice of the resolution • Appointment of liquidator • Committee of inspection • Liquidator’s remuneration • Board power ceases on appointment • Power to fill vacancy • Call for meeting • Final meeting and dissolution

  22. Consequences of Winding up • Share holders • Creditors – secured and unsecured, preferential payments • Officers and employees • Proceedings against the company • Consequences as to costs

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