Define a Company, saying its characterise l for some common objective or purpose ie a voluntary association of a number of pensions (not ) of the Co user any previous company law Important a section under are the Indian Companies Acts passed in the years 1890, a company lous Company laws The definition contained in the Act does of the myriad plov in the Act not highlight the features of a com 1866, 1882 1913 and 1956 t definitions of a company are a follows of action of many persons to contribute money ar Some of the important By a company s worth to company it in some trade or business and who share t common stock and employ 54 may be) arising therefrom. The common stock so contra by the capital of the company The persons who contribute it or to ers. The proportion of capital to which each member is entitled The union it belongs are he right to transfer them is often having a separate entity wth a perpetual succession s an artificialJustice Lindore ent Act, 2015 has made the common seal optional by -Justice Lindley 69 or less restricted arti The Companies Amendment Act, 2015 commons created by omitting the words “and a common seal” A company is an incorporated association, which from Section 9 Thus, a company may be defined as ” artificial person created by law, having common seal, capital divided into transferable sha e defined as an incorporated association which is an ng a separate entity, with a perpetual succession, a 76 to transferable shares and carrying limited liability andenora christie eateries definitioeveals the following characteristics of a Characteristics /Features of a Company: the following An analysis of the above company 1. Incorporated Association. The company is an incorporated association which is created by registration under the prevalent Companies Act. A top public company, at least seven persons and for forming a private com two persons are required. To form a one person company, as a private corm only one person is required. 128 pay, at least 2 Artificial Legal Person. A company is an artificial legal person. It is artificial because it is created by a process other than natural birth. It comes existence through the operation of law. It is a legal person because I eye of the law. It can do a number of things which can be done person, eg, a company can enter into a contract, it can purchase and sell can be fine, it can file a suit, and so on. It acts through a Board of by its shareholders. t exists in the by natural assets, it 47 Directors elected A company is a legal person and is different from its members. The property of the company bel company 3. Independent Legal Entity (Doctrine of Corporate Veil). alone and the members, individually or collectively, can not PES OF COMPANIES Distin TY Point of Disti 1. Minimum ed by such Ans Section 2(68) of the Companies Act, 2013 define a company having a minimum paid-up share capital a private come as may be prescribed o 1. IWhat ls a private company? What are the privile 2 Maximum 2168) niumujationof shares limits the number of it’s off except in case of one person company, limits the to 200 excluding its employees or ex-employees its members; and which by its Articles of es wh il conto the right of transfer of shares 3. Minimus – prohibits the company to invite the public to subscribe However, if two or more persons hold shares in io be to its securities 4. Public I capital Director ns hold shares in joint names companies: Only two persons (mínimum) are required babies Onyn be incorpony is not region does not apply to it. regarded only as one single member o form a private company Exemptions and Privileges enjoyed by Private Co 5. Prospect needed to run such a com two directors month a paid-up share capital of 1 la of 1 lakh the only pan is not required to issue a prospect 6. Allon Condition of minimum subscription does not apply to ing the overall or maximum limit (e) (c) Only two numbers constitute the quorum for a meeting of its c 7. Tran remuneration does not apply to such companies. mana (iii) It is not required to comply with certain provisions (b) It may, by its Articles of Association, provide (c) A person can be a director in 20 private com ions and restrictions 8. Mar ner relating to directors. For example: (a) All its directors can be permanent life directors, for the appointment of directors. 9. (a) It is (x) It is exempted from the requirement of having and (/ exempted from the requirement of rotation of auditors, companies at a time. its Board of Directors. independent dir (at?) Every listed public company has to mandatorily on constitute a private Nomination and Remuneration Committee whereas company is exempted from such requirement m a Private Company? Q. 2. Define a Public company. How does it differ from a Private Company Ans. Public Company. A public company means a company as defined under Section 2(71) of the Companies Act, 2013 and it means a company which is not a private company; – has a minimum paid-up capital as may be prescribed from time to time; 12 – Is a private company which is subsidiary of a public company Private Company.