1

Unit-1 INTRODUCTION TO Company

Legislative backdrop or history of companies’ act or companies’ law in India-
Company law is that branch of law which deals exclusively with various aspects relating
to companies, such as incorporation of companies, allotment of shares and share capital,
membership of companies, management & administration of companies, winding up of
companies, etc. in short, it is that branch of law which governs companies. The company
law in India owes its origin to the English company law. The various companies act passed
in India, from time to time, were based on the English companies’ acts, of course, with
some modifications to suit the conditions in India.

Companies act 1956, is applies to all types of companies, whether registered, under this
act or an earlier act, but does not apply to universities, co-operative societies, scientific &
other societies.

The companies’ act, 1850- it is the first companies act passed in India. It provides for
registration of the companies and transferability of shares. The amending act of 1857
conferred the right of registration with or without limited liability. Subsequently this right
was granted to banking & insurance companies by an act of 1860 following the similar
principle in Britain. The companies’ act of 1956 repealed all the previous act.

The companies’ act, 1956- It was enacted with a view to consolidate and amend the earlier
laws relating to companies & certain other associations. The act came into force on 1 st
April, 1956. This companies act was based largely on the recommendations of the
company law committee (Bhabha Committee) which submitted its report in March, 1952.
This act was the longest piece of legislation ever passed by our parliament. Amendments
(changes) have been made in this act periodically.

The companies act, 1956 consisted of 658 sections and 15 schedules.

The companies act, 1956 had undergone changes by amendments in 1960, 1962-67, 1969,
1971, 1977, 1985, 1988, 1996, 1999, 2000, 2002 (I amendment), 2002 (II amendment), and
2006.

NAGASUDHA R.
Head, Dept. of Commerce and Management
Seshadripuram Evening College
 2

Meaning and Definitions of a Company-

The word ‘Company’ is an amalgamation of the Latin word ‘Company’ means
“With/Together” and ‘Pains’ means “Bread”, originally, it referred to a group of persons
who took their meals together .

In simple language the term company means “A company is an association of many

persons who contributes money/money’s worth to a common stock and employs it in
some trade/business, and who share the profit & loss arising there from”.

Section 3 of the companies’ act, 1956 defines the word ‘Company’ as a company formed
& registered under the act or an existing company formed & registered under any of the
previous company laws”.

Company is a voluntary association of persons formed for the purpose of doing business,
having a distinct name & limited liability.

Objectives of companies’ act, 1956-

1. To protect the interest of investors by furnishing fair & accurate information in the
prospectus of the company.
2. To protect the interest of creditors by preventing reduction of capital, meeting of
creditors etc.,
3. To enforce proper performance of duties by persons responsible of the management of
companies.
4. To prevent misconduct & malpractices on the part of company management.
5. To promote the healthy growth of companies by ensuring integrity in conduct & by
management of the company.
6. To ensure the activities of companies with furtherance of economic & social policy of
the country.
7. To empower the government to interfere & investigate into the affairs of the company.

NAGASUDHA R.
Head, Dept. of Commerce and Management
Seshadripuram Evening College
 3

Characteristics of a Company-
A company as an entity has several distinct features which together make it a unique
organization. The following are the defining characteristics of a company.

1. Separate Legal Entity: On incorporation under the law, a company becomes a

separate legal entity as compared to its members. The company is different & distinct
from its members in law. It has its own name, seal, its assets & liabilities are separate
& distinct from those of its members. It is capable of owning property, incurring debt,
and borrowing money, having a bank account, employing people, entering into
contracts etc.,
2. Limited Liability: The liability of the members of the company is limited to
contribution to the assets of the company up to the face value of shares held by him.
On the other hand, partners of a partnership firm have unlimited liability, i.e., if the
assets of the firm are not adequate to pay the liabilities of the firm, the creditors can
force the partners to make good the deficit from their personal assets. This cannot be
done in case of a company once the members have paid all their dues towards the
shares held by them in the company.
3. Perpetual Succession: A company does not die or 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 the life of the company. Death or insolvency of member does not affect the
existence of the company.
4. Separate Property: A company is a distinct legal entity. The company’s property is
its own. A member cannot claim to be owner of the company’s property during the
existence of the company.
5. Transferability of Shares: Shares in a company are freely transferable, subject to
certain conditions, such that no shareholder is permanently or necessarily wedded to
a company. When a member transfers his shares to another person, the transferee steps
into the shares of the transferor and acquires all the rights of the transferor in respect
of those shares.

NAGASUDHA R.
Head, Dept. of Commerce and Management
Seshadripuram Evening College
 4

6. Common Seal: A company is an artificial person and does not have a physical
presence. Therefore, it acts through its Board of Director’s (BOD’s) 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.
7. Separate Management: A company is administered and managed by its managerial
personnel, i.e., BOD’s. The shareholders are simply the holder of the shares in the
company, and need not be necessarily the managers of the company.
8. 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.

Differences Between Company and a Partnership Firm

Sl. no Company Sl. no Partnership Firm
1. A company is association of 1. A partnership firm is sum total of persons who
persons who have come have come together to share profits.
together for a specific purpose
with separate legal entity.
2. The liabilities of shareholders 2. Liabilities of partners are unlimited.
are limited.
3. The property belongs to the 3. Property of firm belongs to partners.
company & not to members.
4. In case of company the shares 4. A partner cannot transfer his shares in the
may transferred without partnership firm without consent of all other
permission of other members. partners.
5. A public company may have as 5. Members must not exceed 20 in case of baking
many as members as desires business and 10 in other partnership businesses.
subject to minimum of 7
members, where a private
company cannot have more
than 50 members.

NAGASUDHA R.
Head, Dept. of Commerce and Management
Seshadripuram Evening College
 5

6. In case of a company, decision of 6. In partnership firm, 100% consensus of all

majority prevails. partners is required for any decision.
7. Registration is compulsory. 7. Registration is optional.
8. The companies act, 2013 8. The Indian partnership act, 1932 governs it.
governs it.
9. Audit is compulsory 9. Audit is not compulsory.
10. Minimum paid up capital is Rs. 1 10. Not applicable.
Lakh for private company & Rs. 5
Lakhs for public company.

Joint Stock Company

In the words of Haney, “A Joint Stock company is an incorporated association, which is an
artificial person created by law, having a separate entity, with a perpetual succession and
a common seal.”
According to Marshall, A Joint Stock Company as a “Person, Artificial, Invisible, Intangible
and Existing only in contemplation of law.”

Characteristics of Joint Stock Company:

1. Voluntary Association: A JSC is a voluntary association or organisation of persons. No

person can be compelled to become a member of a company, or to give up the
membership.
2. Incorporated Association: Incorporation or registration under the companies act is
absolutely necessary for an AOP or company to become JSC. On incorporation, a
company becomes a body corporate or corporation and becomes a separate person
distinct from the individuals constituting it.
3. Specific objects: A JSC is formed for specific objects only, which are expressly, stated
in the constitution i.e., memorandum of association. A company can undertake only
those activities which are intended to achieve the specified objectives.
4. Artificial Person Created by Law: A JSC has no body and soul. In other words, it has
no physical or natural existence. But it exists in the eyes of law. (i.e. it is considered as
an entity in the eyes of law).

NAGASUDHA R.
Head, Dept. of Commerce and Management
Seshadripuram Evening College
 6

5. Separate Legal Entity: A JSC has a legal entity distinct from and independent of its
members. It is regarded as an entity separate from its shareholders or members. Hence,
a shareholder can sue the company and be sued by it. The property of the company
must be used for the benefit of the company and not for its members or shareholders or
individuals.
6. Separate Property: A company has a right to own and transfer property in its own
name since it is a legal entity. A shareholder has no proprietary right in the property of
the company but merely to their shares. Therefore, the claims of the company’s
creditors will be against the company’s property and not that of the shareholders.
7. Perpetual Succession or Continuous Existence: A JSC has a perpetual succession. In
other words, it has continuous existence or life. ‘Men may come and men may go, but
I go on for ever’ applies to a JSC very well. i.e., members may come and members may
go, but the company goes on until it is wound up according to law. It other words, the
life of the company is not affected by the death, insanity or insolvency of its members.
8. Transferability of Shares: Section 82 of the companies act, 1956, provides that “The
share or other interest of any member shall be a moveable property, transferable in a
manner provided for in the articles of the company”. A member may:
(i) Sell his shares in the open market, or
(ii) Transfer his shares to anybody he likes in a public limited company.
9. Large Membership: Generally, a JSC is an association of persons. That means, it has
a large no. of members. In fact, any number of persons can become the members of a
public company, as there is no limit to the maximum no. of members. However, in the
case of a private company, the maximum no. of members is fifty.
10. Separation of Ownership from Management: In a company, shareholders are the
owners but the management is entrusted to a BOD’s who are separate from the body
of the shareholders. Further, a shareholder is not an agent of the company or the other
shareholders and he cannot bind them by his act. In the company form of organisation
management is divorced from the ownership.
11. A company is not a Citizen: A company on incorporation assumes a legal personality
distinct from its members, but it cannot claim to be citizen of a country under the
constitution of Indian or Citizenship act, 1955.

NAGASUDHA R.
Head, Dept. of Commerce and Management
Seshadripuram Evening College
 Kinds of companies 7

On the basis On the basis On the basis On the basis

of Other Types
of Liability of Ownership of Control
Incorporation

Registered Company Limited Government Holding Associate

Company by Shares Company Company Company

Statutory Company Limited Non- Subsidiary Global Company

Company by Guarantee Government Company
Company
Listed Company
Chartered Chartered
Company Company Foreign Company

Body Corporate

Public Private
Company Company

Small One Person Other Private

Company Company Company
(OPC)

I. On the Basis of Incorporation:

1. Registered Companies: A company brought into existence by registration with
registrar of companies under the companies’ act of 1956 is called a registered
company. These companies are defined u/s 2 of companies act, 2013 or any other
earlier companies act.
2. Statutory Companies: They are companies created by a special statute of the
legislature/parliament, e.g., Reserve Bank of India (RBI) incorporated as per RBI
Act; LIC is incorporated as per LIC Act. The provisions of the act, apply to them if
they are not inconsistent with the provisions of the special act under which they
were formed.
3. Chartered Companies: These are companies are incorporated with the permission
of king/queen/prince. In India, we don’t have any chartered companies at present.
NAGASUDHA R.
Head, Dept. of Commerce and Management
Seshadripuram Evening College
 8

Earlier, East India Company was a charterer company which was incorporated with
the permission granted by queen Elizabeth of Britain.

II. On the Basis of Liability:

1. Company Limited by Liability: In case of the company limited by shares the liability
of the members is limited to the nominal value of the shares held by them. According
to section 2 (22) of companies act 2013, ‘Company limited by shares’ means a
company having the liability of its members limited by the memorandum to the
amount, if any, unpaid on the shares respectively held by them.
2. Company Limited by Guarantee: In this company the liability of the members is
limited to such amount as the members as the members may decide to contribute to
the assets of the company in the event of its being wound up. Example: Clubs,
Societies, Trade associations etc., as regards the funds, a guarantee company without
share capital obtains working capital from other sources as fees, grants, charges,
subscriptions. etc.,

III. On the Basis of Ownership:

1. Government Company: A company in which not less than 51% of the share capital
is held by the Central Government and/or by any State Government or Government
is called a Government Company. It also includes a company which is a subsidiary
of a government company. Example- Hindustan Machine Tools (HMT), Bharat
Electronics Limited (BEL), Indian Telephone Industries (ITI), and Hindustan
Aeronautics Limited (HAL).
According to section 2(45) “Government Company” means any company which not
less than 51% of the paid-up share capital is held by the central government, or by
any state government or governments, or partly by the central government and partly
by one or more state governments, and includes a company which is subsidiary
company of such a government company.”
2. Non-Government Company: It is a company whose capital is subscribed by the
promoters and investing public. In this case the shareholders appoint or re-appoint
the auditors in the general meeting. The audit and annual reports are placed before
the shareholders for discussion and there is no need to submit them to parliament.
NAGASUDHA R.
Head, Dept. of Commerce and Management
Seshadripuram Evening College
 9

a) Public Company: The Company which can invite the public to subscribe to its
shares is called a public company. In other words it is a company which is not a
private company. Minimum number of shareholders is seven and there is no
restriction on the maximum number of shareholders. Transfer of shares and
acceptance of public deposits.
b) Private Company: A company which requires minimum number of 2 persons for
registration and limits the number of members to 50, restricts the transfer of shares
from one holder to another and prohibits an invitation to the public to subscribe to
its shares and debentures is called a private company.
Differences Between Private Company and Public Company-
Sl. no Private Company Sl. no Public Company
1. Requires minimum paid-up capital 1. Requires minimum paid-up capital of Rs. 5
of Rs. 1 Lakh. Lakh.
2. Requires minimum 2 members, and 2. Requires minimum 7 members and no
maximum limit up to 50 (200 as per maximum limit for membership.
New companies act, 2013)
3. At least 2 directors are required. 3. At least 3 directors are required.
4. Formation is not difficult. 4. Formation is difficult. Certificate of
Certificate of incorporation is incorporation and business commencement
sufficient for formation. certificate must be obtained for formation.
5. It must have the word ‘PRIVATE 5. It must have the word ‘LIMITED’ in its
LIMITED’ in its name. name.
6. Filing prospectus and statement of 6. Filing prospectus and statement of prospectus
prospectus is not compulsory. is compulsory.
7. There are no legal restrictions on 7. There are a number of legal restrictions on
allotment of shares. allotment of shares.
8. Shares are not freely transferable 8. Shares are freely transferable from one person
from one person to another. They to another. They can be quoted on the stock
cannot be quoted on the stock exchange.
exchange.
9. It need not hold statutory meeting 9. It must hold a statutory meeting and file a
nor file a statutory report with the statutory report with the registrar within 6
registrar.

NAGASUDHA R.
Head, Dept. of Commerce and Management
Seshadripuram Evening College
 10

months from the date of obtaining the

commencement certificate.
10. There are no legal restrictions on the 10. There are legal restrictions on the
remuneration of the directors. remuneration of the directors.
11. Directors can borrow the loan from 11. No loan to the directors can be granted
the company without the approval without the approval of central government.
of central government.

i) Small Company: Section 2(85) a “Small Company” means a company other than a
public company-
• Whose paid-up capital does not exceed Rs.50 lakhs
• Whose turnover as per the latest accounts does not exceed Rs. 2 crores

Salient Features, Privileges/Exemptions of a Small Company:

✓ Only a private company can be classified as a small company.

✓ Holding company, subsidiary company, charitable company and company governed
by special act cannot be classified as a small company.
✓ For a small company, either the paid-up capital should not exceed Rs. 50 lakhs
turnover as per latest statement of P/L should not exceed 2 crores.
✓ The financial statement, with respect to small company may not include cash flow
statement.
✓ The annual returns shall be signed by the company secretary, or where there is no
company secretary, by the director of the company.
✓ Need not to prepare a report on Annual General Meeting (AGM).
✓ Small company need not have more than 2 directors in its board.
✓ A proportion of directors need not retire every year.

ii) One Person Company (OPC)/ One Man Company: As the name suggests, under this
category, one man holds practically the entire share capital of the company, but in order
to meet the statutory requirements of minimum number of members, some dummy
members, mostly his relatives or obliging friends, hols one or two shares each. Thus,

NAGASUDHA R.
Head, Dept. of Commerce and Management
Seshadripuram Evening College
 11

one man controls the entire company with limited liability. OPC is a hybrid of sole-
proprietor and company form of business.

Terms & Restrictions of OPC:

a. A person shall not be eligible to incorporate more than a one person company or
become nominee in more than one such company.
b. Minor cannot become member or nominee of the OPC.
c. An OPC cannot be incorporated or converted into a company u/s 8 of the act.
d. An OPC cannot convert voluntarily into any kind of company unless 2 years have
expired from the date of incorporation of OPC.

IV. On the Basis of Control:

1. Holding Company: As per section (4) of companies’ act 1956, a holding company is a
company which controls a subsidiary company. Were-
(a) Which holds more than 50% of nominal value of share capital of another company.
(b) Which controls the composition of Board of Directors of another company.
2. Subsidiary Company: As per section (4) of companies’ act 1956, a subsidiary company
is a company which controlled by a holding company. Were-
(a) Company whose 50% of nominal value of equity share capital is held by other
company.
(b) Other company controls the composition of Board of Directors.

V. Other Types of Companies:

A) Association not for profit or Non-profit companies or charitable association
(Section 8):When a person or an association of persons proposes to be registered as a
limited company and it-
Has in its own objects the promotion of commerce, arts, culture, sports, education,
research, social welfare, religion, charity, and protection of environment or such
other object.
Intends to apply its profit or other income in promoting its object.
Intends to prohibit the payment of any dividend to its members.

NAGASUDHA R.
Head, Dept. of Commerce and Management
Seshadripuram Evening College
 12

B) Associate Company: An Associate Company or associate in accounting and business

valuation is a company in which another company owns a significant portion of voting
rights, usually 20%-50%. In this case, an owner does not consolidate the associate’s
financial statements.

C) Global Company: Global corporations operate in two or more countries and face many
challenges in their quest to capture value in the global market.

D) Listed Company/Quoted Company: It is a company whose shares are traded on an

official stock exchange. It must adhere to the listing requirements of that exchange,
which may include how many shares are listed and a minimum earnings level.

Company whose shares are listed (Quoted) on a stock exchange for public trading are
also called as quoted company.

Listing means admission of securities to dealings on recognized stock exchange. The

securities may be of any public limited company, Central or State Government, Quasi-
Governmental and other financial institutions/corporations, municipalities, etc.

E) Foreign Company: A foreign company is that company which is incorporated in a

foreign country but which has established a place of business in India. Although
foreign companies are not registered or incorporated in India. Some of the provisions
of the companies act are applicable to them.
According to section 2(42) of companies act 2013 “Foreign Company” means any
company or body corporate incorporated outside India which
(a) Has a place of business in India whether by itself or through an agent, physically
or through electronic mode; and
(b) Conducts any business activity in India in any other manner.”

F) Body Corporate: It is also called as Corporation or Corporation Aggregate. Body

corporate broadly means a corporate entity which has a legal existence.
According to Section 2(11)-Body corporate includes the following -

NAGASUDHA R.
Head, Dept. of Commerce and Management
Seshadripuram Evening College
 13

❖ A Private Company
❖ A Public Company
❖ One Person Company (OPC)
❖ Limited Liability Partnership
❖ Small Company
❖ Foreign Company or a Company Incorporated Outside India.
However the body corporate does not include-
a. A co-operative society registered under any law relating to co-operative societies; and
b. Any other body corporate (not being a company defined in the companies act, 2013),
which the central government may, by notification, specify in this behalf.

Dormant Company: Where a company is formed and registered under this act for a future
project or to hold an asset or intellectual property and has no significant accounting
transaction for the last 2 years. Such a company or an inactive company** can make an
application to Registrar of Company (ROC) for obtaining the status of a dormant
company.

**Inactive Company means a company which has not been carrying on any business or
operation or has not made any significant accounting transactions during the last two
financial years or has not files financial statements and annual returns during the last two
financial years.

New Companies Act 2013:

The promulgation of the new law is a step towards globalization and is a successful attempt
to meet the changing environment and is progressive and futuristic duly envisaging the
technological and legal developments.
Increase in number of companies from approximately 30,000 in the year 1956 to
11, 00,000 in the year 2013.
Some of the definitions introduced in this act are already in usage. Now, defining more
clarity is given. Auditing Standards, Associate Company, Authorized Capital, Books of
Accounts, Chartered Accountant, Chief Executive Officer (CEO), Chief Financial Officer
(CFO), Global Depository receipt (GDR), Cost Accountant, Key Managerial Personnel
(KMP), voting Rights, Whole Time Director etc.

NAGASUDHA R.
Head, Dept. of Commerce and Management
Seshadripuram Evening College
 14

The new companies act, 2013 is applicable to-

A. Companies registered under companies act, 2013 or any earlier companies act.
B. Insurance companies (Except in so far as the said provisions are not inconsistent with
IRDA Act, 1999).
C. Banking Companies (Except in so far as the said provisions are not inconsistent with
Banking Regulation Act, 1949).
D. Electricity Companies (Except in so far as the said provisions are not inconsistent with
Electricity Act, 2003).
E. Companies governed by Special Act (Except in so far as the said provisions are not
inconsistent with such special act).

Structure

Companies Companies
Act, 1956 Act, 2013

13 Parts 29 Chapters

658 Sections 470 Clauses

15 Schedules 07 Schedules

Highlights on New Indian Companies Act, 2013:

1. Immediate Changes in letterhead: Bills or other official communications, as if full

name, address of its registered office, Corporate Identity Number (21 digit number
allotted by Government), Telephone number, fax number, E-Mail id, website address
if any.
2. One Person Company (OPC): It's a Private Company having only one Member and
at least One Director. No compulsion to hold AGM. Conversion of existing private

NAGASUDHA R.
Head, Dept. of Commerce and Management
Seshadripuram Evening College
 15

Companies with paid-up capital up to Rs 50 Lakhs and turnover up to Rs 2 Crores into

OPC is permitted.
3. Woman Director: Every Listed Company /Public Company with paid up capital of
Rs 100 Crores or more / Public Company with turnover of Rs 300 Crores or more shall
have at least one Woman Director.
4. Resident Director: Every Company must have a director who stayedin India for a t
otal period of 182 days or more in previous calendar year.
5. Accounting Year:
Every company shall follow uniform accounting year i.e. 1 st April -31st March.
6. Loans to director: The Company cannot advance any kind of
Loan/Guarantee/Security to any director, Director of holding company, his partner,
his relative, Firm in which he or his relative is partner, private limited in which he is
director or member or any bodies corporate whose 25% or more of total voting power
or board of Directors is controlled by him.
7. Articles of Association: In the next General Meeting, it is desirable to adopt Table
F as standard set of Articles of Association of the Company with relevant changes to
suite the requirements of the company. Further, every copy of Memorandum and
Articles issued to members should contain a copy of all resolutions / agreements that
are required to be filed with the Registrar.
8. Disqualification of Director: All existing directors must have Directors
Identification Number (DIN) allotted by central government. Directors who already
have DIN need not take any action. Directors not having DIN should initiate the
process of getting DIN allotted to him and inform companies. The Company, in turn,
has to inform registrar.
9. Financial Year: Under the new Act, all companies have to follow a uniform Financial
Year i.e. from 1st April to 31st March. Those companies which follow a different
financial year have to align their accounting year to 1st April to 31st March within 2
years. It is desirable to do the same as early as possible since most the compliances are
on financial year basis under the new Companies Act.
10. Appointment of Statutory Auditors: Every Listed Company can appoint an
individual auditor for 5 years and a firm of auditors for 10 years. This period of 5/10
years commences from the date of their appointment. Therefore, those companies have

NAGASUDHA R.
Head, Dept. of Commerce and Management
Seshadripuram Evening College
 16

reappointed their statutory auditors for more than 5/10 years; have to appoint another
auditor in Annual General Meeting for year 2014.
11. Types of Companies: Maximum number of members in a private company
increased from 50 to 200. Limit of members in an association or partnership (without
incorporation) to be increased up to 100.
12. Share Capital: For defined infrastructural projects, preference shares can be issued
for a period exceeding 20 years. Provisions relating to further issue of capital made
applicable to all companies. The terms for offer of securities, from and manner of
‘Private placement’ to be prescribed.
13. Corporate Social Responsibility (CSR): 2% of average net profits of last 3 years
to be mandatorily spent on CSR by companies having net worth of 5 billion or more
or turnover of 10 billion or more or net profit of 50 million or more.
14. National Company Law Tribunal (NCLT): 2013 act replaces the high court with a
Tribunal to be known as NCLT, which will consists of Judicial & Technical members,
as central government may deem necessary, to exercise and discharge the powers and
functions conferred including approval of merger, corporate reorganization, capital
reduction, extension of financial year etc.
15. Compromises, Arrangement and Amalgamation:
The act allows cross border mergers
Separate provision for merger between two small companies or holding and
wholly owned subsidiary
Any valuation of shares/assets etc. required to be performed by a registered valuer.

Salient Features of New Companies Act 2013:

1. Democracy of shareholders with a view to making shareholders and other
stakeholders, more informed and knowledgeable about their rights.
2. Strengthening women contributions through board room, so as to widen the talent
pool enabling big companies to benefit from diversified background with different
viewpoints.
3. The act stipulates certain class of companies to spend a certain amount of money every
year on activities reflecting Corporate Social Responsibility (CSR). Which would help
in improving the under privileged & backward sections of society.

NAGASUDHA R.
Head, Dept. of Commerce and Management
Seshadripuram Evening College
 17

4. The CA 2013 permits cross border mergers, both ways, a foreign company merging
with an Indian company and vice versa but with prior permission of RBI.
5. Prohibition on forward dealings and insider trading.
6. The act 2013 provides new form of private company i.e., one person company is
introduced that may have only one director and one shareholder.
7. The companies act 2013 proposed E-Governance for various company processes like
maintenance & inspection of documents in electronic form, option of keeping of books
of accounts in electronic form, financial statements to be placed on company’s
website, etc.
8. All listed companies should have at least 1/3 rd of board of independent directors. Such
other class or classes of public companies as may be prescribed by the central
government shall also require to appoint independent directors.
9. Companies’ act 2013 has now defined the duties of a director.
10. The act 2013 provides for rotation of auditors and audit firms in case of publicly traded
companies.
Section A
1. Define Company. (Nov/Dec-2013)
2. State Any Two Features of Global Company. (Nov/Dec-2013)
3. Define Private Company. (Nov/Dec-2014)
4. What are the Different Kinds of Company? (Nov/Dec-2009&2011)
5. Define a Joint Stock Company. (Nov/Dec-2009)
6. Define One Person Company.
7. Define Public Company.
8. What is Listed Company?
9. What is Subsidiary Company? (Nov/Dec-2011)
10. What is a Statutory Company? (Nov/Dec-2013)
11. State any two Features of Public Company. (Nov/Dec-2013)
12. What do you mean by Registered Company?
13. What do you mean by Public Company?
14. What do you mean by Foreign Company?
15. What do you mean by Holding/Subsidiary Company?
16. What do you mean by Company Limited by Guarantee Company?
17. State any four types of Companies.
18. What are the features of Companies Act, 2013?

NAGASUDHA R.
Head, Dept. of Commerce and Management
Seshadripuram Evening College
 18

19. State any 2 steps in the Formation of a Public OR Private Company.

20. Bring out two Differences Between Public Company & Private Company.
Section B and C
1. State the features of Joint Stock Company.
2. What are the Advantages of Private Company.
3. Give a brief note on the Legislative backdrop of JSC.
4. State any 5 Differences Between Private Company & Public Company.
5. State the features of-
A) Government Company
B) B) Domestic Company.
6. What is JSC? What are the Features of JSC?
7. Briefly explain the Highlights of Companies Act, 2013.
8. Explain the Various Types of Companies.
9. Bring out the Features of Indian Companies Act, 1956.
10. Briefly explain the Steps in the Formation of a JSC.
11. Briefly explain Multi National Companies.
12. What are the Objectives of Companies Act, 1956?
13. Discuss the Steps Involved in the Incorporation of a Company.
14. Explain Briefly the steps in Formation of a Joint Stock Company.
15. Explain the Different Types of Joint Stock Company.
16. Briefly Explain the Various Stages Involved in the Formation of a Public
Company.
17. Explain the Features of a Joint Stock Company.
18. Explain Salient Features of the Companies Act, 2013.
19. Explain the Kinds of Company in Detail.

“First of all comes the gift of food; next is the gift of learning,
and the highest of all is the gift of knowledge.”
-Swami Vivekananda

NAGASUDHA R.
Head, Dept. of Commerce and Management
Seshadripuram Evening College