25-02-2013, 03:38 PM
INTRODUCTION TO COMPANIES ACT 1956
COMPANIES.ppt (Size: 187.5 KB / Downloads: 43)
CHARACTERSTICS OF A COMPNAY
Incorporated association
Separate legal entity
Limited liability
Perpetual succession
Common seal
Transferability of shares
Separate property
Capacity to sue be sued
Classification on the basis of control
Holding company
A company is known as the holding company of another company if it has control over that other company.
Subsidiary company
the company so controlled is termed as subsidiary company.
Classification on the basis of ownership
Government company
A Government Company means any company in which not less than 51% of the paid-up share capital is held by
The central government or
Any state government or governments or
Partly by the central government and partly by one or more state governments.
E.g.: State Trading Corporation of India Limited
Minerals and Metals Trading Corporation of India limited
Non-government company
Foreign companies
Formation of company
A company is a creature of law. It is incorporated in accordance with the provisions of companies act.
This whole process of formation of a company may be divided into the following four stages:
Promotion stage
Registration or incorporation stage
Capital subscription stage
Commencement of business stage
Promotion of a company
The term promotion is used in the companies act but it has not been defined in the act.
In fact, it is not a term of law but of business.
It includes all those activities by which a company is brought into existence.
Commencement of business
A private company or a company without share capital can commence its business immediately after obtaining certificate of incorporation of business. But a public company having share capital cannot commence any business until it has obtained the certificate of commencement of business.