Juraz -Enhance Your Commerce Skills With Us 3. Number of members 5. A company has common seal.

The maximum number of members allowed in private company is 6. It is an artificial person created by law.
Corporate Ragulations (B.Com / BBA) 200.
7. It is managed by the board of directors.
Module I 4. Financial year
8. The shares of company are freely transferable.
The financial year in relation to company means the period ending Kinds of Companies
Introduction to Companies Act, 2013 on 31st day of march every year and it has been incorporated on or
On the basis of On the basis On the basis On the basis On the basis On the basis Other types of
after 1st day of January. incorporation of liabilities of number of of ownership of control of nationality companies
Objectives of Indian Companies Act, 2013 members
5. Class Action Suit
1. To protect interest of the investors. Chartered Companies Private Government Holding National Small company
companies limited by Company companies companies companies
This act introduced class action suit with a view of making
2. To put strict restrictions on insider trading. shares
shareholders and other stakeholders more informed knowledgeable Statutory Companies Public Non- Subsidiary Foreign Defunct
3. Provide merger, amalgamation and take over. and conscious of their right. companies limited by company government companies companies company
guarantee companies
4. To facilitate ease of doing business. 6. Composition of Board Registered Unlimited One person Dormant
companies companies company company
5. To promote transparency and high standard of corporate Compulsory appointment of a woman director. At least one director
governance. should be a person who has stayed in India for a period less than 182
6. To promote CSR activities. days in previous year. A. On the basis of incorporation
7. To improve corporate law standard of our country. 7. Cross border mergers. 1. Chartered companies
8. To introduce new concepts such as one person company, small 8. Prohibition of insider trading. Chartered companies is a type of company formed by the crown. It is
company and dormant company. 9. Strict rule for auditors. regulated by charter incorporating, not by companies act.

10. National company law tribunal introduced. 2. Statutory company

Salient Features of Indian Companies Act, 2013 Company A company formed by a special statute or act passed by the
parliament is known as statutory company.
1. One person company (OPC) A company is an association of a person united for common object.
3. Registered company
This act provides formation of one person company. It may have one Characteristics of a company
director and one shareholder. The companies formed and registered under the companies act 2013
1. Voluntary association of a person. is known as registered company.
2. Corporate Social Responsibility 9CSR)
2. A company has perpetual succession.
This act provides certain class of companies to spend certain amount
3. A company has separate legal entity.
of money every year on corporate social responsibility
4. The liability of a members of a company is limited.

B. On the basis of liability Transferability of shares is Shares are freely transferable 2. Subsidiary company
1. Companies limited by shares restricted. A company owned or controlled by another company is known as
Number of directors required is There should be at least three subsidiary company.
It means a company having liability of its members limited by the
memorandum to the amount. two. directors. F. On the basis on nationality
2. Companies limited by guarantee There is no public invitation. Public invitation is allowed. 1. National company
A company having liability of its members limited by the Private company is not required Public company issue A company formed under a specific company act of nation is known
memorandum to such amount as the members may respectively to issue prospectus. prospectus. as national company.
undertaken by memorandum to contribute the assets of the No restriction on remuneration Legal restriction on 2. Foreign company
company in the event of winding up. of directors. remuneration directors.
A company incorporated outside India is known as foreign company.
3. Unlimited company Private company enjoys some There is no such privileges for
G. Other forms of companies
An unlimited company is a type of private company. It has some special privileges. public company.
features of limited company. 1. Small companies
3. One Person Company (OPC)
C. On the basis of number of members A small company is a company in which paid up share capital does
A company which has only one person as member is called one
not exceed fifty lakhs rupees.
1. Private Company person company.
2. Defunct companies
A company which is formed with a minimum number of 2 persons is D. On the basis of ownership
known as private company. A defunct company is a company which have failed to commence its
1. Government companies
business of its incorporation.
2. Public company A public enterprise incorporated under the Indian Companies Act,
3. Dormant company
It is not a private company and has a minimum paid up share capital 2013 is called government company.
of Five lakh rupees or such higher paid up capital. A company which is not active is known as dormant company.
2. Non-government companies
Difference between private company and public company Listed companies
The list of non-government companies includes those companies
Private Company Public Company which are registered under the companies act but not as government A company its securities is listed on any recognised stock exchange is
companies. known as listed companies.
Minimum number of members is Minimum number of members is
two. seven. E. On the basis of control Associate company

Maximum number of members There is no maximum limit. 1. Holding company An associate company means a company which has a significant
is two hundred. influence in another company, but which is not subsidiary company
A company it has control over other that companies known as
of that company.
holding company.

Nidhis
Module II 3. Assembling various factors of production.
Nidhi means a company which has been incorporated with the object 4. Preparing preliminary documents.
of cultivating the habit of thrift and savings among its members. Promotion of a Company 5. Entering preliminary documents.
Corporate Veil
6. Naming the companies.
It is a legal decision to treat the rights and duties of a corporation as 7. Appointment of bankers, brokers etc.
Promotion
a right or liabilities of its shareholders.
Promotion is the process of organising and planning the finance of a Duties of a promoter
Lifting or piercing of corporate veil
business under the corporate firm. 1. Duty to disclose the secret profit.
It refers to a circumstance in which court set aside limited liability
Promoter 2. Duty to disclose all the material facts
and hold company’s investors or directors personally liable for the
organisation’s activities or debts. A promoter is a firm or person who does the preliminary work 3. Duty to disclose private arrangements
related to the formation of a company.
Cases of lifting the corporate veil 4. Duty of promoter against future allottees.
Types of Promoters
A. Under judicial interpretation Liabilities of promoter
1. Professional promoters
1. Protection of revenue 1. Liability to account in profit.
These promoters take the promotion as their profession. Their
2. Prevention of fraud 2. Liability in the misstatement in the property.
interest is promotion of business, not running of the business.
3. Determination of enemy character of a company. 3. The promoter is personally liable for all contracts made by him on
2. Occasional promoters
4. Where the company is a sham. behalf of the company.
These promoters take interest in floating some companies. They are
5.company avoiding legal obligations. not engaging in promotion work on a regular basis. 4. Liability at the time of winding up of the company.

6. Avoidance of welfare legislation. 3. Entrepreneur promoters Documents of companies

7. Protecting public policy. They are both promoters and entrepreneurs. 1. Memorandum of association

B. Under statutory provision 4. Financial promoters 2. Articles of association

1. Punishment for incorporation of company by furnishing false A promoter who provides and offer the financial services also is 3. Prospectus
information. known as financial promoters. Memorandum of Association
2. Fraudulent application for removal of name. Function of a promoter It is a legal document contains fundamental conditions of a company
3. Liability for fraudulent conduct of business. 1. Discovery of business idea is allowed to be incorporated.
2. Detailed investigation of the project.
Contents of memorandum 6. Association clause Difference between memorandum and articles
1. Name clause This clause is also known as subscription clause. This clause states Memorandum Articles
that the purpose of the subscribers to incorporate the company,
2. Situation clause It is the main document of the It is the subsidiary document of
agreeing to take the shares in the company based on the number
3. Object clause company the company.
written in the memorandum
4. Liability clause Memorandum governed by Articles governed by
company’s act only. memorandum and companies
5. Capital clause
Articles of the Association act.
6. Association clause Memorandum cannot be altered Articles can be altered very
Articles of association is a document that defines the purpose of a
1. Name clause company and specifies the regulation for its operations. very easily. easily.
The first clause of a memorandum is the name of the proposed Contents of articles of association Memorandum contains lesser Articles contain more clause.
company. Name of the company with the last word ‘limited’ in the clause.
1. The execution of preliminary contracts.
case of public company or the last words ‘private limited’ in the case
Memorandum defines object Articles mention ways and
of a private limited company. 2. Share capital and its division.
and power of the company. means of achieving objects in
2. Situation clause 3. Payment of underrating commission. the memorandum.
This clause mention name of the state in which the registered office 4. Transfer of shares. Memorandum regulates the Article regulates the relationship
of the company is to be situated. It is also called registered office 5 Forfeiture of shares. relationship between company between company and
clause. and general public. members.
6. Buyback of shares
3. Object clause
7. Alteration of capital.
This is the most important clause in memorandum. This states object Prospectus
of the company. It means the type of the activities which the 8. General meetings
Prospectus is a formal document. It is an invitation to offer to
company carry on. 9. Capitalisation of profits.
subscribe for shares or debentures in the company.
4. Liability clause 10. Calls on shares
Red herring Prospectus
This clause states that nature of liability that the member incur. The 11. Transfer of shares.
It is a prospectus which does not have complete information on the
liability of the company whether limited or unlimited and also states
12. Voting right of shares. price and quantum of securities offered.
company limited by shares and company limited by guarantee.
13. Adjournment of meetings. Abridged prospectus
5. Capital clause
14. Seal of the company. It means a memorandum containing salient features of a prospectus
This clause states that the capital of the company with which the
15. Winding up of the company. as may be specified by the SEBI by making regulations in this behalf.
company is registered and division of share capital.

Shelf prospectus
Module III 6. Reserve capital
It is the amount of the capital which is not called by the company
It is a type of prospectus issued by companies making multiple issues
except in the event of winding up.
of bonds for raising fund. SHARES AND SHARE CAPITAL Kinds of share capital
Statement in lieu of prospectus 1. Equity Share capital
Share 2. Preference Share capital
It is a document filed with registrar of the companies when the The capital of a company is divided into small units. Those units Equity Share Capital
company has not issued prospectus to the public for inviting them to are called share. Shares which are not preference shares are called equity shares.
subscribe shares. Stock These are ordinary shares.
A set of shares put together in a bundle is called stock. Merits of equity shares
Content of the prospectus Difference between Shares and Stock 1. It is a permanent capital. There is no liability for payments.
1. Name and address of the registered office of the company, 2. It improve creditworthiness of the company.
company secretary, auditor, banker, underwriter, etc. SHARES STOCK 3. There is no capital obligation for payment of dividend.
It has nominal value It has no nominal value 4. Company can strengthen financial base by issuing equity shares.
2. Date of opening and closing of issue.
It has distinctive numbers It has no such number 5. Equity shareholders enjoy ownership.
3. Declaration about the issue of allotment letters. It is partly or fully paid up It is always fully paid up 6. Reward from equity shares is high.
It can be issued directly It cannot be issued directly Preference shares
4. Details about underwriting of the issue.
It transferred in multiple of one It transferred in fractions Preference shares are those shares which carries preferential right
5. Capital structure of the company. with respect to payment of dividend and repayment of capital.
6. Procedure and time schedule for allotment and issue of securities. Types of share capital Merits of preference shares
1. Registered Capital 1. It ensure creditworthiness of the company.
Doctrine of ultra vires The capital with which a company is registered is called registered 2. Shareholders earn a stable dividend rate.
It is a fundamental rule of company law. A company has power to do capital. It is also known as nominal or authorised capital. 3. No voting right. So existing share holders will not loss controlling
all acts authorised by companies act memorandum and article. So 2. Issued Capital power of the company.
any activity done contrary to or in excess of these will be ultra vires. It is a part of authorised capital which is issued to the public for 4. Preference dividend is a fixed obligation.
subscription. 5. Issue of preference shares enjoy financial flexibility.
Doctrine of indoor management 3. Subscribed Capital 6. No legal obligation for dividend payment.
Doctrine of indoor management means protect the outsiders against It is a part of issued capital which is subscribed by the public. 7. Improved borrowing capacity.
the action done by the company. Any person who enters into a 4. Called up Capital Demerits of preference shares
It is a part of subscribed capital which the directors have called from 1. Preference dividend should be paid in arrears. It will affect the
contract with the company shall ensure that the transaction is
the shareholders. financial flexibility of the company.
authorised by the articles and memorandum of the company.
5. Paid up capital 2. Preference shares lack of liquidity in market.
It is a part of called up capital which is actually paid up by the 3. The rate of dividend to equity shares is more than preference.
shareholders. 4. Skipping dividend disregard market image.
5. Costly source of finance.

Types of preference share capital b) Offer for sales 3. Issue of shares at discount
1. Cumulative preference share. In this method shares are offered to public through the When shares are issued at a price lower than face value is called
2. Non-cumulative preference shares. intermediaries. issue of shares at discount.
3. Participating preference shares. Procedure for issuing new shares Underwriting
4. Non-participating preference shares. 1. Approval and filing of prospectus. Underwriting is an act of guarantee by an organisation for the sale of
5. Convertible preference shares. 2. Issue of prospectus. certain minimum amount of shares and debentures issued by a
6. Non-convertible preference shares. 3. Receiving of application. public limited company.
7. Redeemable preference shares. 4. Scrutiny of application. Underwriting commission
8. Irredeemable preference shares. 5. Sorting of application. It is a compensation that an underwriter receives for placing a new
Difference between equity shares and preference shares 6. Closure of application list. issue with investors.
Equity Shares Preference Shares 7. Record of application. Listing of Securities
It is an ownership security. It is a hybrid security. Employees’ Stock Option Plan (ESOP) It means enrolment of name of the company in the official list
Dividend rate is not fixed. Dividend rate is fixed. It is a scheme under which the company gives option to the whole maintained in the stock exchange.
Nominal value is lower. Nominal value is higher. time directors, officers or employees to purchase or subscribe equity Objectives of Listing
Expenses on issue are lower. Expenses on issue are higher. shares at a future data at a predetermined price. 1. To ensure supervision and control of trading.
Dividend is paid last. Dividend is before paying equity Different types of ESOPs 2. To mobilise savings for economic development.
dividend. 1. Employees Stock Option Scheme (ESOS) 3. To protect interest of investors.
Raising of capital/ Issue of shares Under this scheme, the company grands an option to the employees 4. To create ready marketability and liquidity.
1. Private placement to acquire shares at a future date with predetermined price. Advantages of listing
2. Right issue 2. Employees Stock Purchase Plan (ESPP) 1. High liquidity
3. Public offer Employees are given the right to acquire shares of the company 2. Facilitate buying and selling
Private placement immediately, not a future date. 3. Tax advantages
Private placement is the issue of securities of a company direct to Book Building 4. Fair price
one investor or small group of investors. It is an international practice which refers to collecting orders from 5. Helps to raise finance
2. Right issue investment bankers as large investors based on an inductive price 6. Protects investors
It is an issue of shares to the existing shareholders in proportion to range. 7. Good collateral securities
their existing shareholding. Issue price of shares 8. Get regular information
3. Public issue 1. Issue of shares at par Limitations of listing
Public issue means selling of shares or securities to public by issue of When shares are issued equal to their face value is called issue of 1. Speculation
prospectus. shares at par. 2. No regular price quoting
Types of public issue 2. Issue of shares at premium 3. Large amount of listing fees
a) Initial public offer (IPO) When shares are issued at a price higher than face value is called 4. Information to competitors
This is a method of raising securities in which a company sells shares issue of shares at premium. Sweat equity shares
or stocks to general public for first time. Sweat equity shares are those shares issued by the company to its
directors and employees at a discount or for consideration other
than cash for providing know how or making available rights in the 2. No stamp duty on transfer of securities. Role of directors
nature of intellectual property rights or value additions. 3. Elimination of bad deliveries. 1. Directors as agents
Forfeiture of shares 4. Elimination of loss or theft of shares. A director is an agent of the company for the conduct of the business
It means cancellation of shares due to non-payment of allotment 5. It enable share transfer without involve much paperwork. of the company. Directors of a company have fiduciary relationship
money within a specified period. 6. Faster and smoother settlement. with the company as well as shareholders when act as an agent.
Share Certificate Disadvantages of Demat system 2. Directors as trustees
It is a document issued by the company evidencing that a person 1. Dishonest stockbrokers. Directors as trustee of the company's money and properties. They
named in such certificate is the owner of the shares of the company. 2. Trading in stock maybe uncontrollable in case of dematerialisation. safeguard them for and on behalf of the company.
Contents of a share certificate Depository Participant (DP) 3. Directors as employees
1. Name and address of registered office. It is described as an agent or the registered stock broker of a Where any director, besides being a director is also in the service or
2. Serial number of share certificate depository. employment of the company such as secretary, managing or
3. Date of issue of share certificate. otherwise he will be treated as an employee.
4. Name and address of holder.
5. Number and class of shares.
Module IV 4. Directors as managing partners
Directors are elected representatives of the shareholders and they
6. Signature. are in a position as managing directors.
Share warrant Management of Companies Powers of directors
It is a document issued under the common seal of the company 1. To call on shareholders in respect of money unpaid on shares.
stating that the bearer is entitled to the specified number of shares. Director 2. To authorize buy back of shares.
Transmission of shares A director means a director appointed to the board of a company. It 3. To borrow monies.
It is the passing of title or property in shares from one person to means the person who appointed for the management of the 4. To grant loans.
another by the operations of law such as death, insolvency etc… company. 5. To issue securities.
Difference between Transfer and Transmission of shares Qualification of director 6. To diversify the business of the company.
In Companies act, 2013 does not laid down any particular 7. To approve amalgamation and merger.
Transfer of shares Transmission of shares
qualification for a director, not even qualification of shares. Directors 8. To invest fund of the company.
It is voluntary. It is involuntary.
must held qualification shares. Nominal value of qualification shares Duties and Responsibilities of directors
Transfer of shares take place at It is take only at the time of
of a director is fixed by the articles of the company. Statutory duties
any time. death, insolvency, insanity.
Disqualification of Directors 1. To verify truthiness of prospectus.
Valid consideration exist. There is no consideration.
1. If he is unsound mind. 2. To determine amount of minimum subscription.
Bonus shares
2. If he is undischarged insolvent. 3. To keep register of members.
Bonus shares are those shares which are issued by a company free of
3. He has been convicted by a court of any offence. 4. To convene annual general meeting.
cost to the existing shareholders of a company.
4. If he has not paid any call in respect of shares of the company. 5. To convene extra ordinary general meeting.
Dematerialisation
5. If he has not allotted the direct identification number. 6. To send to the registrar the copies of resolution.
It is a process of converting physical shares into digital or electronic
6. If he has not filled the annual accounts for continuous three 7. To keep register of mortgages and charges.
form.
financial year. 8. To submit statement of affairs at the time of winding up.
Advantages of Demat system
7. If he has not filed annual returns for continuous three financial
1. Immediate transfer of shares.
year.

General duties Director Identification Number (DIN) Securities and Exchange Board of India Act 1992
1. To exercise independent judgment. It is an eight-digit unique identification number that has lifetime SEBI was set up in 1988 to regulate the functions of security market.
2. To exercise reasonable care, skill and diligence. validity. Through DIN details of directors are maintained in a SEBI promotes orderly and healthy development in stock market.
3. To avoid conflicts of interest. database. Functions of SEBI
4. Not to accept benefits from third party. Whole time Director 1. To protect the interest of investors.
5. To promote the success of the company for the benefits of its He is a director in the wholetime employment of the company. 2. To regulating the business of stock exchanges.
members as a whole. Managing Director 3. Promoting and regulating self regulatory organizations.
Rights of directors He is the key managerial personnel of the company. He is the head of 4. Prohibiting unfair trade practices in stock markets.
1. Right to access company’s document and financial records. the company and decision making. 5. Promoting investors education and training.
2. Right to get remuneration. Chief Executive Officer 6. Prohibiting insider trading.
3. Right to delegate duties. An officer of a company who has been designed as such by it. 7. Levying fees and other charges.
4. Right to receive notice of board meeting. Chief Financial Officer 8. Registering and regulating working of stock brokers, sub brokers,
5. Right to participate in board meeting. According to Section 219, A person appointed as chief financial offer Marchant bankers etc..
6. Right to vote at board meeting. of a company 9. Registering and Regulating working of depositories, participants
7. Right to hold any number of directorships. Corporate Governance etc.
8. Right to claim reimbursement of business expenses. Corporate governance refers to the set of systems, principles and 10. Registering and regulating the working of venture capital fund,
Liabilities of directors processes by which a company is governed. mutual funds etc.
Liabilities of the directors can be classified into three types: Need and Importance of corporate governance Powers of SEBI
1. Liability to outsiders. 1. Change in ownership structure. 1. Call for periodical returns from stock exchanges.
2. Liability to company 2. Growing number of scams. 2. To compel listing of shares to public companies.
3. Criminal liability. 3. Separation of ownership from management. 3. To grant recognition to stock exchanges.
Appointment of directors 4. Social responsibility. 4. To grant registration to intermediaries.
1. Appointment of first directors 5. Globalisation. 5. Withdrawal of recognition of stock exchanges.
a. By articles of the articles of the company. 6. SEBI rules made corporate governance compulsory. 6. Prohibit contract in certain cases.
b. By the subscribers to the memorandum of association. 7. Take over and mergers. 7. To give direction to stock exchanges.
2. Appointment of subsequent directors Principles of corporate governance 8. To suspend business of recognized stock exchanges.
a. By the company in general meeting. 1. Fairness Securities Appellate Tribunal (SAT)
b. By the board of directors. 2. Responsibility. It is a statutory board established under the provisions of Section
c. By third party. 3. Transparency. 15K of the SEBI Act,1992 to hear and dispose of appeals against
d. By tribunal. 4. Accountability. orders passed by the SEBI.
e. By the principle of proportional representation. Corporate Social responsibility (CSR) Powers of SAT
Removal of directors CSR is the contribution of a company to the communities 1. Enforce and summons attendance of any person.
1. Removal by the share. development by the implementation of social and environmental 2. Require the discovery and production of documents.
2. Removal by the tribunal. projects and the developmental programs of a country. 3. Receive evidence on affidavits.
3. Removal by central government.

4. Issue commissions for the examination of the documents or 1. Meeting of directors 7. Voting
witnesses.
The directors must hold their meetings as frequently as possible. This Each director has one board for each resolution put to vote at the
5. Dismiss an application for default or deciding it ex-parte.
meetings of the directors are known as board meetings. meeting. In case of an equality of votes, the chairperson shall have a
Composition of SAT
 Presiding Officer: Appointed by the central government in Important matters relating to directors meeting second or casting vote.
consultation with Chief justice of India or nominee. 2. Meeting of shareholders
1. Frequency of board meeting
 The two members shall be appointed by central government.
Shareholders meeting can be any of the following:
 First meeting should be held within thirty days from the date of
incorporation. 1. Annual general meeting
Module V  Minimum four meeting of BOD should be held every year. 2. Extra ordinary meeting
 One person company, small and dormant company at least one
3. Class meeting
Company Meetings and Winding Up meeting of the BOD has been half of the calendar year.
1. Annual general meeting
2. Notice of the meeting
Company meetings Annual general meeting is regarded as the most important of all
 A minimum seven days notice should be send to every directors
Company meeting means coming together of at least a quorum of company meetings. The purpose of the meeting is to give full
at his address by post or mail.
members in order to transact either ordinary or special business of information to members of the progress by the company during the
the company. 3. Agenda year.
Characteristics of company meeting The term agenda means things to be done. It is aa statement of the Secretary’s duties in connection with annual general meeting
business to be transacted at a meeting.
1. Two or more persons must present. Before the meeting
4. Quorum
2. Notice is essential. 1. Ensure the final accounts are ready.
The quorum for a meeting of BODs of a company shall be 1/3rd of its
3. Held at a particular place, date and time. 2. Final accounts will be submitted to the board meeting for
total strength or two directors whichever is higher.
approval.
4. Must be held as per companies Act
5. Chairperson
3. Secretary must issue notice to the shareholders, directors,
Kinds of company meetings Every meeting of the board must have chairperson to preside over it. auditors and stock exchange at least twenty one days before the
1. Meeting of directors date of the meeting.
6. Resolution
2. Meeting of shareholders 4. Make necessary arrangement for poll, preparation of voting
Decisions are taken by directors by passing resolutions.
3. Meeting of creditors papers etc.

4. Meeting of debenture holders. At the meeting

1. To get the attendance register signed by the shareholders.
2. To help the chairman in ascertaining the quorum. Essentials of a valid meeting (Requisites) Objectives of use of minutes
3. To read the auditors report. 1. Proper authority to convene the meeting. a. It provide a clear and accurate record of business transactions at a
meeting.
4. To help the chairman in the conduct of meeting. The proper authority to convene a general meeting to the company
is the board of directors. If the directors fail to call the meeting, the b. It is a permanent record of the meeting.
5. To take notes for preparing meeting.
tribunal is the proper authority.
After the meeting c. It accepted in a court of law for evidence.
2. Notice of meeting
d. To provide a link between one meeting and previous meeting.
1. To prepare minutes.
The second requirement of a valid meeting is that a proper notice of 6. Voting
2. To get minutes of meeting approved by the chairman. meeting should be given to the members. In addition to the
3. To send intimation of the appointment to the directors and members, notice should be given to auditors, directors etc. Each director has one vote for each resolution put to vote at the
meeting. Voting may be of show of hands or voting by poll.
auditors. 3. Quorum
7. Proxy
2. Extra ordinary meeting Quorum means minimum number of members who must be present
All general meetings of a company other than annual general in the meeting for validity of the meeting. A proxy is an authorised agent of member for the purpose of voting.
meeting are called extra ordinary general meeting which is held 4. Chairman of the meeting 8. Resolution
between two annual general meeting. A resolution represents the collective decision of the meeting.
The chairman is a person who presides the meeting. A chairman is
3. Class meeting necessary to conduct a meeting. Types of resolution
Meeting of different classes of shareholders is known as class Duties of Chairman a. Ordinary resolution
meeting.
a. To set the agenda. It is one which require a single majority, that is the votes in favour
3. Meeting of Creditors
b. To lead the meeting. should exceed the votes against the resolution.
A company call the meeting of creditors, when the company b. Special resolution
proposes to make a scheme for arrangement with its creditors. c. to maintain order at the meeting.
d. To ensure the conventions of the meeting are been followed. It is a resolution which is passed by at least three fourth majority of
4. Meeting of debenture holders votes of members on show of hands or electronically.
e. To ensure members present at meeting.
The company may call the meeting of its debenture holders to get
Difference between ordinary resolution and special resolution
their approval for making any change in their terms and conditions. f. To exercise his casting votes for interest of the company.
Ordinary Resolution Special Resolution
5. Minutes of meeting
It is required for ordinary It is required for special matters.
Minutes is a clear and accurate record of the proceedings and the
matters.
decisions at a meeting.

It is passed by simple majority of It is passed by at least 3/4th 3. He has the right to claim his salary and other allowances. Conditions for voluntary winding up
votes. majority of members. 4. He has the right to issue proper guidelines to concerned officers. 1. Declaration of solvency
It is not required to mention in It is required to mention in the 5. During winding up he can claim his legal dues. A voluntary winding up takes place only when the company is
the notice of the meeting. notice of the meeting. solvent. Declaration must be made by the directors of the board.
Copy of ordinary resolution need Copy of special resolution must 2. Shareholder’s resolution
not be filled with registrar. be filled with registrar. Winding Up
Shareholders must meet and pass ordinary resolution or a special
Chairman can use his casting Chairman cannot do so. Meaning resolution for the winding up of the company.
vote. It is a process of realisation of assets, payment of liabilities and 3. Meeting of creditors
distribution of surplus among the members of the company. It is also
known as liquidation of company. The company should call a meeting of creditors and the majority
Company secretary should agrees for winding up.
Modes of winding up
Company secretary is a principal officer responsible for the Provisions applicable to voluntary winding up
secretarial and management of the company as per companies Act. a. Winding up by tribunal
1. Commencement of voluntary winding up
Duties of company secretary b. Voluntary winding up
2. Stopping the business.
1. Promotion, formation and incorporation of companies. a. Winding up by tribunal
3. Appointment of company liquidator.
2. Arranging board meeting. The company may required to wound up by the tribunal under the
following situations: 4. Powers to remove and fill vacancy of company liquidator.
3. Arranging general meeting.
1. In the case of company does not pay debts amounts exceeding 5. Notice of appointment of liquidator.
4. Preparation of minutes.
one lakh rupees. 6. Cessor of board’s power.
5. Maintaining the statutory register.
2. In the case of fails to submit annual returns and financial 7. Powers and duties of company’s liquidator in voluntary winding
6. Keeping safe custody of company seal. statements of the last five financial years. up.
7. Communicating with the company share holders. 3. The formation of company is for any unlawful purpose. 8. Appointment of companies.
8. Ensuring good corporate governance. 4. In case of company is formed in a fraudulent manner. 9. Liquidator to submit report on progress of winding up.
Rights of company secretary 5. In case of sick companies, if no revival and rehabilitation is done. 10. Report of liquidator to tribunal for examination of persons.
1. He has the right to supervise, direct and control all the office b. Voluntary winding up 11. Final meeting and dissolution of company.
activities of the subordinate office.
It means winding up of the company by the members without
2. He has the right to attend board meeting. interference by the tribunal.

Consequences of winding up 5. To sell the whole of the undertaking of the company as a going National Company Law Appellate Tribunal (NCLAT)
1. Consequences as to shareholders concern. The central government has to establish an appellate tribunal known
6. To raise any money required for the security of the asset of the as National Company law Appellate Tribunal. It has to consists of a
The shareholders are liable to pay the face value of shares. A
member of a company is liable to pay full amount of shares held by company. chairman, judicial and technical members not exceeding eleven. It
has to hear appeals against the orders of the tribunal.
him. Dissolution of a company
2. Consequences as to creditors Dissolution of a company means existence of a company comes to an
end.
It is the duty of the liquidator to pay off all liabilities of the company.
Difference between winding up and dissolution For more details, please visit the below link:
3. Consequences as to servants and officers
Winding up Dissolution https://youtu.be/UIz_NR3Wbnc
A winding up order by a court operates as a notice of discharge to
the employees and officers of the company except when the Order of tribunal is not essential. Order of tribunal is essential. Telegram Link:
business of the company is continued.
The legal entity of the company The legal entity status comes to https://t.me/JurazCommerce (For Short notes)
4. Consequences as to cost continues. end.
Assets of the company are insufficient to satisfy the liabilities, the Liquidators carry out the process NCLT passes the order of This is just a short note based on syllabus of Corporate Regulations.
court may make an order for payment of cost of assets. of winding up. dissolution. For full details of the subject, please refer text book.
5. Consequences as to documents Winding up is one of the Dissolution is the end process. Prepared by:
Any document in the name of the company must contain a methods of dissolution of a
company. JUBAIR MAJEED
statement that the company is wound up.
RAHUL MURALI
Liquidator Method of dissolution of a company

A liquidator is an officer who is specially appointed to wind up the 1. Dissolution by the order of tribunal.
affairs of a company. 2. Dissolution by liquidation. ALL THE BEST
Powers and duties of company liquidator 3. If the name of the company is removed from the register of
1. To verify the claims of all the creditors and consolidate them. companies.

2. To take into his custody all the assets, properties etc. National Company Law Tribunal (NCLT)

3. To evaluate the assets and properties of the corporate debtor. The central government has to establish a tribunal to be known as
National Company Law Tribunal. It consists of president and such
4. To invite and settle claim of creditors, employees or any other
number of judicial and technical members as may be deemed
claimant.
necessary.