2. A Company is a voluntary association of
persons formed for the purpose of doing
business, having a distinct name and limited
liability.
They can be incorporated under the Companies
Act (it may be any type of company)
Corporations enacted under special enactments
( Even those which are incorporated outside
India)
Corporate sole
Any other body corporate notified by the central
government
4. A company which has a minimum of two
persons. They have to subscribe to the MOA
and AOA
It should be have a minimum paid up capital of
1 lakh or more as prescribed by the article.
The maximum number of members to be fifty (
it does not include members who are employed
in the company, persons who were formerly
employed)
The rights to transfer the shares are restricted in
the Private companies
Continued….
5. Prohibits any invitation to the public to subscribe
and therefore it cannot issue a prospectus
inviting the public to subscribe for any shares in,
or debentures of the company
It prohibits acceptance of deposits from persons
other than its members, directors or their
relatives.
If two or more are holding one or more shares in
a company jointly, they shall for the purpose of
this definition, be treated as a single member.
As there is no public accountability like a public
company, there is no rigorous surveillance.
6. It can have a minimum of two members.
It can commence business immediately after
obtaining certificate of incorporation.
It need not issue prospectus or statement in
lieu of prospectus.
It can have a minimum of 2 directors.
It need not hold statutory meeting or file
statutory report with the ROC.
7. A Public company means a company-
> Which is not a private company
> Which has a minimum paid-up capital of Rs 5
lakh or such higher paid-up capital, as may be
prescribed
> Which is a private company and is a not a
subsidiary of a company, which is private
company.
>It includes- any company which is a public
company with a paid up capital of less than 5
lakh, then it has to enhance its paid up capital as
per the statutory requirement
8. Private Limited
No. of members can
be 2 to 50.
Minimum paid-up
capital of Rs. 1 lakh .
Minimum no. of
Directors present
should be 2.
Public Limited
No. of members can
be 7 to Unlimited.
Minimum paid-up
capital of Rs. 5 lakh.
Minimum no. of
Directors present
should be 3.
9. Private Limited
Can accept deposits
from Members,
Directors or their
relatives.
Should contain words
“Private Ltd.”at the
end of it’s name.
Can not invite public
to subscribe for share
or debenture.
Statement in lieu of
prospectus not
required even for 1st
issue.
Public Limited
Can accept public
deposits.
Should contain words
“Limited” at the end
of it’s name.
Can invite public to
subscribe for Share or
Debenture.
Statement in lieu of
Prospectus or
prospectus required.
10. Private Limited
Does not require
Certificate to
commence business
after Incorporation.
Statutory meeting and
statutory report is not
required.
No limit on fees of
Director.
Public Limited
Require Certificate to
commence business
after Incorporation.
Statutory meeting and
statutory report are
required.
Director should not get
more than 11.5% of
profit.
11. The Act provides for conversion of public
company into a private company and vice
versa
A private company is converted into a public
company either by default or by choice in
compliance with the statutory requirements.
Once the action for conversion takes place then,
a petition can be filed with the central
government with the necessary documents for
its decision on the matter of conversion.
12. 1. It should take a necessary decision in it’s board
meeting & fix up the time, place & agenda for
convening a General meeting to alter the AOA &
consequently the name by a special resolution as
well as to alter by special resolution the “objects
clause” of the Memorandum subject to the
confirmation of the Company Law Board Under
Section 17 & by ordinary resolution the Share
Capital Clause under Sec 94 if the alteration of
Share Capital is involved in the process.
Continued…
13. 2. The company has to see that any change in the
articles confirms to the provisions of the
Companies Act [Section 31(1)]; also to see that
such changes does not increase liability of any
member who had become the member before
alteration.
3. It must issue notices for the General meeting in
order to pass there at the special resolutions
together with the explanatory statements for
the alteration of the articles and the
memorandum.
Continued…
14. 4. It will have to convene the general meeting in
order to pass there at the special resolution
(i) for the purpose of the alteration of the
memorandum and AOA; and (ii) also for the
purpose of deleting those articles which are
required to be included in the articles of a
private company only [Section 3(1)(iii)]. Such
other articles which do not apply to a public
company should be deleted and those which
apply should be inserted. Consequent upon the
above changes, it will have to delete the word
Private from it’s name [Section 21]
Continued…
15. 5. It shall file either the prospectus in the Form
prescribed under Schedule II or the statement
in lieu of prospectus in the form prescribed
under Schedule IV within 30 days of the
passing of the resolution mentioned in (4)
above in the manner stated in Section 44.
The aforesaid prospectus or the
statement in lieu of the prospectus must be in
conformity with Parts I and II of Schedule II or
with Parts I and II of Schedule IV respectively.
6. In the matter of the prospectus or the statement
in lieu of the prospectus the company
Continued…
16. has to adopt abundant caution against any
untrue statement being included therein,
because inclusion of untrue statement will attract
penalty by virtue of Sec 44(4). It may be noted
that a statement included in a prospectus or
statement in lieu of prospectus shall be deemed
to be untrue if it is misleading in the form and
context in which it is included. Likewise, where
the omission from prospectus or a statement in
lieu of prospectus of any matter is calculated to
mislead, it shall be deemed, in respect of such
omission, to be a prospectus in which an untrue
statement is included.
Continued…
17. 7. It shall file with the concerned Stock exchange
6 copies of such amendments on both articles
and memorandum, one of which must be a
certified copy.
8. It shall file with the Registrar the said special
resolution together with the explanatory
statement within 30 days of their passing [Sec
192].
9. It must take some of the steps regarding future
issue of capital under Section 81 which are not
in common with the steps discussed in relation
to future issue of share.
Continued…
18. 10. The company has to apply to the Registrar for
the issue of fresh Certificate of Incorporation for
the changed name, namely, the existing name
with word “Private” deleted. On issue of such
certificate shall the name of the converted
company be final and complete[Sec 23].