Company:
Is a voluntary and autonomous
association of certain persons which capital divided into numerous transferable
shares formed to carry out a particular purpose. Company formed and registered
under the company’s act 1956.
Kinds of companies:
Charted
companies: East India company
Statutory
companies: RBI, IFC
Registered
companies: Incorporated under company’s act 1956.
Difference between Private limited company and Public limited
company:
1. Minimum number of its members Private: (2), Public (7)
2. Maximum number of its members Private: (50), Public:
unlimited
3. Issue of prospects: a private company cannot invite
public to subscribe to its shares or debentures by issue of prospects. Public
company must issue the prospects.
4. Transfer of shares: restrict to private company,
freely transferable to public company.
5. Number of Directors: Private (2), Public (5)
6. Use of the word Limited
7. Restriction regarding managerial remuneration, public
limited company not more than 11% of the net profit.
8. Legal formalities
9. Commencement of business
Memorandum of association:
It determines the scope of the
activities of the company and defines the relations of the Company with out
side world.
Registered office, company name, objectives,
7
members have to promise to take at least one share each, their names and
addresses.
Articles of association:
Rules and regulations of the
internal management of the company and very important to the Shareholders,
because they determine the relation between the company and its members.
Subsidiary company:
A
company that is completely control by the company
Holding company:
A company that has control over
other companies through ownership of a sufficient portion Of those companies
common stock. A company that owns enough voting stock in another
Firm to control management
EX: CAPITLA IQ is subsidiary of S & P (standard and
poor, credit rating company) S & P is holding company of CAPITLA IQ.
Chairman:
One of the person elected by the directors in the board of directors
meeting.
Who is the
Director: one of the shareholders becomes director
CEO: chief executive officer, top officer in the company
in the executive cadre
Who can appoint
CEO: board of directors
AGM: shareholders annual general meeting
Quorum: attend the
minimum number of members in the meeting
Who can appoint
auditor: board of directors
Minute books: recording
of the board of directors meeting
Agenda: the
meeting, which is discussed by the board of directors
Duties of
director: to appoint officers and auditors, to take policy
decisions.
Corporation:
Business firm whose articles of
incorporation have been approved in some state
A business, which is a
completely separate entity from its owners
Difference
between Corporation and Company:
Company: an
institution created to conduct business
He only invest in large well
established company
He can start the company in
his garage
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