COMPANY

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COMPANY:

COMPANY Company is an voluntary association of persons with capital divided into numerous transferable shares formed to carry out a particular purpose in common. Invisible and intangible person Distinct from the persons who have formed it and its members.

Definition:

Definition A company is defined as a voluntary incorporated association which is artificial person, created by law with limited liability having a common seal and perpetual succession.

Characteristics of company:

Characteristics of company Company is registered under the companies Act, 1956 Artificial person created by law Law creates it and law only dissolve it Company is a legal entity distinct from its members Artificial legal person is capable of owing, enjoying and disposing of the property in its own name.

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Perpetual succession, i.e., the members keep on changing from time to time but this not affect the company’s continuity. Members may come and go but the company would go on for ever. Shares are freely transferable Limited liability to the extent of the face value held by the shareholders Separate body can sue and it can be sued in its own name.

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Artificial person, invisible, intangible and existing only in the contemplation of law. It can hold, purchase or sell the properties, incur and pay debts, open a bank account in its own name and sue and can be sued like an individual. Company is an artificial person but it acts through human beings called directors Separate between ownership and management.

On the basis of incorporation:

On the basis of incorporation

On the basis of Liability:

On the basis of Liability

On the basis of public investment:

On the basis of public investment

DISTINCTION BETWEEN PARTNERSHIP AND COMPANY:

DISTINCTION BETWEEN PARTNERSHIP AND COMPANY Registration: Under the companies Act 1956 Registration is not compulsory Legal Status: Registered by law as a single person Collection of individuals Minimum no. of persons: Public company is seven, Private company is two Partnership is two

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Maximum No. of persons Public company is no limitation, private company is fifty In a trading concern partnership is 20 In a banking business partnership is 10 Transferability: Transfer his shares without the consent of other members Cannot transfer his shares without the consent of other members

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Liability of members: Liability of members is limited Liability of partners is unlimited Contractual capacity: Shareholders can enter into contract with the company Partners can contract with other partners and not with the firm Length of existence: Death or retirement of partner dissolves the partnership company having legal existence

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Statutory obligations: Company comply with various statutory obligations Partnership has no statutory obligations Authority of members: Authority vests with few directors in a company Authority vests with all partners Distribution of profits: Profit is distributed among all the partners equally Profit is distributed according to the provisions of the articles Audit: Company audit is compulsory Partnership firm is not compulsory

Private vs. Public Companies:

Private vs. Public Companies Difference Private Company Public Company Members Minimum 2 Maximum 50 Minimum 7 Maximum Unlimited Transfer of shares Strict and regulated by its articles Freely transferable Invitation Cannot invite public to subscribe to its share capital Can invite Name It has to use words “Private Limited” “Limited” Number of directors 2 3 Legal control Less legal controls Regulations are more Strict Minimum paid up capital 1 lakh rupees Five lakhs rupees 10/11/08 Quadir Mohiuddin 14

STATUTORY BOOKS AND STATISTICAL BOOKS:

STATUTORY BOOKS AND STATISTICAL BOOKS Limited Company is to maintain statutory books under legal obligations at its registered office for maintaining a record of its activities. These books are maintained to disclose the Receipt and expenditure All sales and purchases and All assets and liabilities

STATUTORY BOOKS:

STATUTORY BOOKS Register of investments of the company Register of fixed deposits Register of members Register of debenture holders Foreign register of members Minutes books containing minutes of proceedings of general meetings Register of contracts Registers of directors, managing directors, manager and secretary Register of loans and guarantees Register of renewed and duplicate certificates

STATISTICAL BOOKS:

STATISTICAL BOOKS Share application and allotment books Shares call book Share certificate book Debenture applications and allotment book Debenture calls book Register of share transfers Shareholders dividend book Debenture interest book

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Register of documents sealed Register of share warrants Agenda book Register of power of attorney Register of lost shares certificate Debenture transfer register Register of directors attendance

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