8/4/2019 Companies Act by Rajat Jhingan
1/23
Company Law1
Companies Act
Term I I I
P G D M F T
( 2 0 0 8 2 0 1 0 )
8/4/2019 Companies Act by Rajat Jhingan
2/23
Company Law 2
G r o u p
I s t
N a m e
R a j a t J h i n g a n
8/4/2019 Companies Act by Rajat Jhingan
3/23
A g e n d a :
W h a t i s a C o m p a n y ?
Type s of C ompani e s.
T h e P r o m o t e r s .
D i re ct ors i n a C ompany.
T he Share hold i ng Pat t e rn.
Company Law 3
Companies Act
8/4/2019 Companies Act by Rajat Jhingan
4/23
Definition of a Company: It mean an association of individuals formed for
some common purpose.
It is an artificial person created by law , with a fixedcapital, divided into transferable shares, with
perpetual succession and common seal.
Company Law 4
8/4/2019 Companies Act by Rajat Jhingan
5/23
As defined in Companies Act 1956, Section 3
(1) (i) and (ii): A company formed and registered
under this Act or an existing company. An existing
company means a company formed and registered
under any of the former Companies Act
A voluntary incorporated association which is anartificial person, created by law with limited liability
having common seal and perpetual succession
Company Law 5
8/4/2019 Companies Act by Rajat Jhingan
6/23
Company Law 6
Company : Characteristics
Separate Legal Entity.
Limited Liability.
Perpetual Succession.
Common Seal.
Transferability of Shares.
Capacity to Sue.
8/4/2019 Companies Act by Rajat Jhingan
7/23Company Law 7
Classification ofCompanies
On the basisof
Incorporation
On the basisof Liability
On the basisof number of
Members.
On the basisof Control.
On the basisof Ownership.
Classification of Companies.
8/4/2019 Companies Act by Rajat Jhingan
8/23Company Law 8
Classification (Contd.)
On the Basis of INCORPORATION.
1. Statutory Companies.
2. Registered Companies.
On the basis of LIABILITY.
1. Limited by Share.
2. Limited by Guarantee.
3. Unlimited Liability.
8/4/2019 Companies Act by Rajat Jhingan
9/23Company Law 9
Classification (Contd.)
On the Basis of MEMBERS:
1. Private Companies.
2. Public Companies.
On the basis of CONTROL
1. Holding Company.
2. Subsidiary Company.
8/4/2019 Companies Act by Rajat Jhingan
10/23Company Law 10
Classification (Contd.)
On the Basis of OWNERSHIP:
1. Government
2. Non Government.
8/4/2019 Companies Act by Rajat Jhingan
11/23
Promoters.
1. Promotion
2. Legal position of promoters.3. Promoters Liability.
4. Promoters remuneration.
5. Pre-incorporation contract.
Company Law 11
8/4/2019 Companies Act by Rajat Jhingan
12/23
D i r e c t o r s : D e f i n i t i o n
Sec. 2 (13) defines director as any person occupying the
position of authority to act on behalf of the company
The directors of a company are collectively known as board ofdirectors'. On the analogy of the representative form of
government, they are elected representatives of shareholders.
Company Law 12
8/4/2019 Companies Act by Rajat Jhingan
13/23
Appointmentof Directors
First Directors
Appointment by the company.
Appointment by the directors
Appointment by third parties.
By proportional representation.
By the central government.
Company Law 13
8/4/2019 Companies Act by Rajat Jhingan
14/23
As agents
As employees.
As officers
As trustees.
Positionof
directors:
Company Law 14
8/4/2019 Companies Act by Rajat Jhingan
15/23
Disqualifications of Directors.
Unsound Mind.
Undischarged Insolvent Applied to be adjudicated.
Convicted by Court.
Calls in respect of shares, been in arrear . Sec. 203 : Fraud or misfeasance.
All ready a director of a public company.
Company Law 15
8/4/2019 Companies Act by Rajat Jhingan
16/23
S H A R E S Definition: A share is an interest of a shareholder in a company. The
capital of a company is divided into certain indivisibleunits of a fixed amount called shares.
an interest having a money value & made up of diverse
rights specified under Articles of Association
It includes stock except where a distinction between astock & a share is expressed or implied. [ Sec.2 (46)]
Company Law 16
8/4/2019 Companies Act by Rajat Jhingan
17/23
SHARES
A share is evidenced by a share certificate.
[Sec. 84] Each share is distinguished by appropriate
number. [Sec. 83]
A bundle of rights and obligations.
Company Law 17
8/4/2019 Companies Act by Rajat Jhingan
18/23
Shares StocksHave a nominal Value Have no nominal Value
May not be so. Always full paid up.
Equal denomination. Can be of Unequal Denomination.
Directly issued to the public. Cannot be issued directly.
Transferable in whole numbers. Transferable is small fractions
Always bear a distinctive number. Fractions does not bear distinctivenumber.
Company Law 18
8/4/2019 Companies Act by Rajat Jhingan
19/23
Equity Shares[Sec 85 (2) ]
With reference to any company limited
by shares.Sweat Equity Shares.
Preference Shares
[ sec 85 (1)]Have Preferential right to be paiddividend during the life time of a
company.
Preferential right to the return ofcapital when the company goes into
liquidation.
Company Law 19
8/4/2019 Companies Act by Rajat Jhingan
20/23
Preference Shares (Types)
Cumulative Prefrence Shares
Non-Cumulative prefrence shares.
Participating prefrence shares.
Non participating prefrence shares.
Convertible prefrence shares. Non-Convertivle prefrence shares.
Redeemable prefrence shares. [Sec. 80]
Company Law 20
8/4/2019 Companies Act by Rajat Jhingan
21/23
Application & Allotment of Shares
1. Minimum subscription [Sec. 69 (1) ].2. Application Money [ Sec 69 (3) to (6) ].
3. Effect of irregular allotment [ Sec. 7].
4. Opening up of subscription list [ Sec. 72].
5. Shares and debentures to be listed on stock exchange [Sec 73].
6. Return as to allotments [Sec 75].
Company Law 21
8/4/2019 Companies Act by Rajat Jhingan
22/23
Buy-back of shares.
[Sec. 77-A]
Company is allowed to purchase its own shares from:
Its free reserves.
Securities premium account.
Proceeds of earlier issue.
Conditions for buy back.
Authorized by its Articles. Resolution passed in its general meeting.
Must not exceed 25 % of reserves.
Must be listed on stock exchange and regulated by SEBI.
Company Law 22
8/4/2019 Companies Act by Rajat Jhingan
23/23
Company Law 23
Top Related