Companies
According to
Incorporation
1CA
GROUP 1
INCORPORATION refers to the LEGAL PROCESS
used to a CORPORATE ENTITY or COMPANY , the
process of incorporation involves writing up a document
INCORPORATION known as the ARTICLES OF INCORPORATION and
enumerating the firm’s share holders .
In Incorporation the Assets and Money flow are kept
separate form those of the owners known as “LIMITED
LIABILITY”
Incorporation makes it easier for a business to sell shares
, raise capital and divest ownership form a portion of the
business
• Chartered Company
• Section 8 ACT (NGO)
• Limited by shares
• Registered company
TYPES OF • One Man Company
INCORPORATION • Public limited company
COMPANIES • Private limited company
• Holding company
• Micro Company
• Small Company
• Statutory Company
CHARTERED
COMPANY
I. Established by the Royal Charter.
II. Evolved In Modern Era
III. With the Special Order of KINGS
AND QUEENS
IV. Enjoys special Rights and Privleges
V. The increase in the number and
Activities of the chartered
companies took place in second half
of the 16th century.
VI. Main aim for chartered company is
TRADE, COLONIZAION and EXPLORATION.
VII.EX – East India Company , Bank Of
England , British Broadcasting
Corporation (BBC)
SECTION 8 ACT COMPANIES
(NGO):-Ms
• Section 8 of the Companies Act, 2013 provides for the formation
of companies with charitable or social objectives. These
companies are known as Section 8 companies, and they are
exempt from many of the restrictions that apply to other types
of companies.
• Features of Section 8 Companies:-
Liability: Section 8 companies have limited liability protection,
which means that the personal assets of the company’s
members are protected in case of any financial loss or liability.
-No Minimum Share Capital: Unlike other types of companies,
Section 8 companies do not have a minimum share capital
requirement Name: The name of a Section 8 company must end
with the words ‘Foundation’, ‘Association’, ‘Society’, ‘Council’,
‘Club’, ‘Charity’, ‘Institute’, ‘Organisation’, ‘Federation’, ‘Trust’, or
‘Academy Profits: Section 8 companies are not formed for profit,
and any profits that are earned by the company must be used for
charitable or social purposes.
Directors: Section 8 companies must have at least two directors,
and these directors must meet certain
Qualifications.Compliance: Section 8 companies are required to
comply with certain legal and regulatory requirements, including
filing annual returns, maintaining proper accounting records, and
holding regular board meetings.
Company limited by shares:-
• 1.The company’s ownership is limited by shares and includes the members of
the public domain. Any individual from the public domain can acquire a share in
the company by purchasing via the stock exchange.
• 2.The liability of the company’s shareholders is limited to the nominal valuation
of the given shares.
• 3.Shareholders are not obligated to confront losses that tend to exceed the
nominal value of the shares. The company limited by shares is governed by the
Ministry of Corporate Affairs and other regulators of their respective nations.
• 4.To stay compliant, the companies should also furnish periodical reports to the
governing regulators and other concerned departments.
• 5.The reports must enclose financial statements, a statement from the BODs,
and an auditor’s report.
• 6.A company limited by shares can operate as a public limited company or issue
shares to the public domain to procure capital for serving business objectives.
• 7.Such companies have the leverage to procure funding from portfolio entities,
institutional investors, and mutual funds. (Note: Portfolio Entity refers to a
direct investment company in which a fund of funds (FoFs) makes an
investment)
• 8.Therefore, the company can procure ample funding to serve various
objectives, including expansion and capacity building.
• EXAMPLE :- Infosys, TATA , reliance and google etc..
REGISTERED COMPANY:-
• - A registered company is an organisation which is formed and registered with
the appropriate statutory authority of the country as a 'company or
corporation' in accordance with the accordance and securities law of that
country.
- A 'Registered company' is also called an 'incorporated company' or a
'registered corporation' or an 'incorporated corporation’.
- These are the companies formed and registered under the provisions of the
Companies Act.Most of the companies in India are registered under the Indian
Companies Act, 2013
- The method of formation, management and liquidation are given under
various sections of this act .
- Registered companies maybe limited by shares, limited by guarantee, or
unlimited companies.
- A registered association which is an artificial legal person, having an
independent legal, entity with a perpetual succession, a common seal for its
signatures, a common capital comprised of transferable shares and carrying
limited liability.
=> Examples:-
• Microsoft Companies - an american tech company.Develops and sells
computer software, consumer electronics, etc.
-HSBS - a British multinational banking company, which provides various
financial services
.- Reliance Industries Limited - an Indian multinational company.Renders
services in retail, telecom, textiles, petrochemicals, enery sector, etc.
ONE PERSON COMPANY
(OPC) :-
• The concept of One Person Company (OPC) is a
new vehicle/form of business , introduced by
the companies Act,2013 , there by Enabling
Entrepreneur(s) carrying on the business in
Sole-Proprietor form of Business to enter
into a Corporate Framework.
• One Person Company is a hybrid of Sole-
Proprietor and Company form of business ,
and has been provided with
concessional/relaxed requirements under the
Act.
• Only a natural person, who is an Indian
citizen and resident in India shall be
eligible to incorporate a One Person Company
• Explaination:- The term “Resident in India”
means a person who haa stayed in India for a
period of not less than 182 days during the
immediately preceding one calander year.
• EX :- Vijaya corporations solutions ,
Truffle House pvt ltd , Arkan diary pvt lmt
PUBLIC LIMITED
COMPANY :-
A public limited company is a business that is managed by directors and
owned by shareholders. a public limited company can offer shares to the
public.
A public limited company is that anyone can buy share in the company
Business choose to become a public limited company because the pros
of this new structure out weigh the cons some of the advantages are,
The company can raise capital through share sales
The raised capital can fund new opportunities
Capital raised can also be used to pay off debts
Publicity increases.
public records can make it easier to attract busines partners etc.
Disadvantages,
two directors are needed for PLC.
Unlike Ltd's company secretaries,a PLC secretary must be fully qualified
Shareholders can be anyone who choose to purchase, which can dilute a
company's vision
The more shareholder's, the more power has been distributed.
original owners may loose control over the business
EXAMPLE :- Indian Oil Co-orporation , SBI Bank , Hindustan petolium co-
orporation ltd
PRIVATE LIMITED
COMPANY :-
• A private company is a firm that is privately
owned.
• Private companies may issue stock and have
shareholders, but their shares do not trade on
public exchanges and are not issued through an IPO.
• The high costs of an IPO is one reason companies
choose to stay private.Private limited corporations
can be further subdivided into limited by shares,
limited by guarantee, and limitless firms.
• It can have no more than 200 members
• A minimum of two directors are required to form a
private limited company.
• Must have atleast two directors .
• A private company cannot accept deposits from
public.
• Registered with a minimum paid up capital of 1
lakh . Two members are the quorum for meeting
• EXAMPLE - Hindustan Coka-Cola beverages pvt ltd ,
ICICI Bank etc…..
HOLDING COMPANY :-
• Holding company is also known as parent
company
• Definition:
• A company created to buy and own the shares
of other companies which it then controls
• They simply own assets
• Examples: Shares, property, trademarks,
patents
• The key difference is to just hold assets
• The purpose of holding company is to allow
those who own several businesses away to
limit liability create a stream line
management and maintain ownership over each
business
• A holding company provides a central point
of control over the business
• According to the company law in India, a
company that is own and controlled by
another company will be termed as a
subsidiary and the former is considered as a
holding company
MICRO COMPANIES :-
Definition of micro company:-
Business that operates on a very small scale more than
half the new enterprise are sole proprietorship or micro
business with no more than two employees
The following are the some of the draw backs of
running a micro business:
• Micro business typically do not have access to resources
• There is no set time schedule in the business
• The number of people involved in a small firms workers is
often restricted
The following are the some of the advantages of
micro business.:-
• They're closer to their customers
• They're more flexible.
• They are able to better detect and take advantage of
small market niches.
• They can make decisions faster.
• It is easier to link the staff to the company.
• Everyone knows each other
• Communication will be easier
SMALL COMPANIES:-
“Small Company” means a company, other than a public company
• Its Paid-up share capital of which does not exceed Rs. 4 Crores or such higher amount as may be prescribed which shall not be
more than Rs. 10 Crores
•Under Companies Act, 2013, Small Companies are introduced to promote economic development and generate employment for
society. These companies are not specifically registered but is simply a private company with less paid-up capital and less turnover.
EXAMPLES: Sole proprietorships, Partnerships AND Incorporated companies
ADVANTAGES OF SMALL COMPANY:-
• ability to develop close relationships with customers
• Have More Independence
• Develop Knowledge
• Satisfaction
DISADVANTAGE OF SMALL COMPANY:-
• More Uncertainty
• Longer Work Hours
• More Financial Commitment
• Risk
TOP 3 SMALL COMPANIES
• Quest Retail Private Limited
• Tally Solutions
• Maestro Technologies, Inc.
STATUTORY
COMPANY:-
Statutory corporations are defined as
autonomous corporate bodies that are created
by a special act of Parliament or state
legislature having predefined functions,
duties, powers and immunities as defined by
the act of the legislature.
•The following is a list of the most
prominent Statutory Bodies in India which
play an important role in the functioning of
the government
1.National Human Rights Commission
2.National Commission for Women (NCW)
3.National Commission for Minorities (NCM)
4.Armed Forces Tribunal (AFT)
5.National Consumer Disputes Redressal
Commission (NCDRC)
MEMBERS:-
• Y Shashank Reddy – Introduction and Chartered Company
• Abhishek – Section 8 Act (NGO)
• S. Manasa – Limited By Shares
• Kevin Vicky - Registered company
• Aditya – One Person Company
• Rachel – Public Limited Company
• Dapinder Singh – Private Limited Company
• Calvin – Holding Company
• Kavya – Micro Company
• B. Bhavana – Small Company
• Daina – Statutory Company
