Company means- An association of persons united for a common object. A Company formed and registered under Companies Act or an existing Company.

COMPANIES ACT 1956

Company means-An association of persons united for a

common object.

A Company formed and registered under Companies Act or an existing Company.

Characteristics• Incorporated Association• Separate Legal Entity• Limited Liability• Separate Property• Perpetual Succession• Transferability of shares• Common Seal• Capacity to sue and be sued

Companies

Incorporated

Chartered

Statutory

Registered

Companies Limiter By

shares

Public Private

Companies limited by Guarantee

Public Private

Unlimited Companies

Public Private

Unincorporated

Public Company Private Company

Min. Members 7 2

Max. Members No limit 50

Restriction on Name Limited Pvt Limited

Commencement of Business

After certificate of commencement of Business

After Incorporation

Invitation to Public Yes No

Transferability of Shares

Free Not Free

Issue of Share Warrants

Yes No

No of Directors Min 3 Min 2

Statutory Meetings Must No Compulsion

Quorum 5 2

FORMATION OF COMPANY Promotion Incorporation

Availability of Name Minimum paid up Capital Documents to be filed with registrar Certification of Incorporation

Floatation or Raising of Capital Commencement of Business

Memorandum of Association Is the foundation on which the structure of the

company is based.

It contains the fundamental conditions upon which alone the company is allowed to be incorporated

Its five clauses provide the basic features of the company’s constitution.

A company cannot depart from the provisions contained in its Memorandum, however great the necessity maybe.

PurposeIntending shareholder can find out from the

memorandum the field in, or the purpose for which the money is going to be used by the company and what risk is he taking in making the investment.

Any one dealing with the company shall know whether the contractual relation into which he is entering with the company is one relating to a matter within its corporate objects.

ClausesName Clause

Registered office Clause

Object Clause

Liability Clause

Capital Clause

DOCTORINE OF ULTRA VIRES‘Ultra’ means beyond, ‘Vires’ means

power.

Any activity not authorised by the memorandum is ultra vires the memorandum.

Consequences of Ultra ViresInjuction

Breach of warranty of authority

Personal Liability of Directors

Ultra Vires Contracts

Articles of AssociationThe articles of association are the rules and

regulations of a company framed for the purpose of management of its internal affairs.

It defines the powers of its officers.

The Articles usually contain following mattersNumber and value of sharesAllotment of sharesCalls on sharesForfeiture of sharesBorrowing powersDirectors, their appointment etc.MeetingsVoting Rights etc