Yes

1. The 2013 Act has introduced several new concepts and has also
tried to streamline many of the requirements by introducing
new definitions.
• One-person company: The 2013 Act introduces a new type of
entity to the existing list i.e. apart from forming a public or
private limited company, the 2013 Act enables the formation of
a new entity a ‘one-person company’ (OPC). An OPC means a
company with only one person as its member [section 3(1) of
2013 Act].
• Private company: The 2013 Act introduces a change in the
definition for a private company, inter-alia, the new
requirement increases the limit of the number of members
from 50 to 200. [section 2(68) of 2013 Act].

2. • Small company: A small company has been
defined as a company, other than a public
company.
(i) Paid-up share capital of which does not exceed 50
lakhs.
(ii) Turnover of which as per its last profit-and-loss
account does not exceed two crore.
As set out in the 2013 Act, this section will not be
applicable to the following:
• A holding company or a subsidiary company
• A company registered under section 8
• A company or body corporate governed by any
special Act [section 2(85) of 2013 Act]

3. Definition of Company
• A company is an association of persons who
contribute money or money’s worth for a
common purpose of trade or business and
share profit or loss arising from them.
• Company is an artificial person created by law,
having separate legal entity, perpetual
succession and a common seal.
• The money and the common stock
contributed in the company is known as the
Capital of the Company.

4. • The persons who contribute the capital in the
Company are called as the Members of the
Company or the Shareholders.
• The portion of capital which is contributed by
the members is called as Share.
• Section 2(10) – 1956
• Section2(20) – 2013

5. Features/Characteristics of Company
1. Voluntary Association – A company is a voluntary association of certain
persons registered under the Companies Act. Law cannot compel a
person to become a member.
2. Separate legal entity - A company is regarded as an entity
different/separate from its members. It has independent corporate
existence. It is an artificial person created by the law. It is different from
its owners and the managers.
Solomon vs Solomon & Co Ltd.
3. Limited Liability – The company being separate person, is the owner of
its assets and bound by its liabilities . The liability of members is limited
to the extent of amount unpaid on their shareholdings.
4. Perpetual Succession – A company is a stable form of organisation and
does not have any fixed span of life. Its continuance is not affected by
the death , insolvency, mental or physical incapacity of its members. It is
created by the law and only the law can dissolve it.

6. 5. Artificial legal person – A company is an artificial person in the sense that it
is created by law and lacks the attributes possessed by natural persons. It
is invisible, intangible, and exists only in the contemplation of law.
6. Common Seal – Being artificial entity a company has to act through a
collectivity of individuals called the board. The board of directors are
competent to exercise almost all the powers of the company on its behalf.
In order to signify the company’s consent to a contract or a document,
the board affixes a seal of the company on it. It signifies the common
consent of all he members, and is the official signature of the company.
7. Transferability of shares – Shares of public company are freely transferable
without the permission of the company but in manner as provided in the
Articles of Association.

7. What are the different kinds of Companies?
• Unicorporated Companies – No longer under Companies Act.
• Incorporated Companies – Which are incorporated under the Companies
Act.
 Chartered Companies – East India Company
 Statutory Companies – The companies created under the Special Act of
parliament. Eg – Reserve bank of India, Life Insurance Corporation.
 Registered Companies – Registered under registrar of joint stock
companies.
• Unlimited Companies – Company not having any limit on the liability of its
members.
• Company limited by guarantee
• Holding and Subsidiary Company
• Government and Non Government Company
• Foreign Company

8. Memorandum of Association
• It is the principal document of a company without which it cannot be
registered. It describes the constitution and the fundamental conditions
on which a company has been registered.
• Negatively speaking it circumscribes the boundaries beyond which the
objects of the company cannot go. Any act of the company which goes
beyond the scope of the memorandum is simply ‘ultra vires’.
• Printing and Signing of memorandum – By the subscribers to the
memorandum.
• Contents of Memorandum –
1. Name Clause
2. Registered office clause
3. Object clause
4. Liability clause
5. Capital clause
6. Subscription clause .

9. • Alteration of Memorandum can be either through a special resolution or
ordinary resolution as case may be.

10. Articles of Association
• They lay down the rules ,regulation and bye-laws for the internal
management of the affairs of the company. They are framed with the
object of carrying out the aims and objects as set out in the Memorandum
of Association.
• The Articles of Association must be framed in such a manner that they
should not go beyond the powers of the company as contemplated by the
Memorandum of Association.
• Contents of Articles –
1. Share capital, rights of shareholders, share certificates
2. Lien on shares
3. Calls on shares
4. Transfer of shares
5. Transmission of shares
6. Alteration of share capital
7. Voting rights of the members

11. 8. General meetings
9. Voting rights of members
10. Managers
11. Secretary
12. Dividends and reserves
13. Capitalisation of profits
14. Winding up.

12. • Articles must be signed by the subscribers to the memorandum of
association and Articles of Association and registered along with the
memorandum.
• Alteration of articles of association – by passing a special resolution and
file the same with the Registrar.

13. Lifting of Corporate Veil
• Solomon vs Solomon & Co. – It was considered that a company is a
separate legal entity, distinct from its members. It regarded as a curtain
(but not a wall between company and the members).
• The effect to this principle is that there is a financial veil and its not
permitted to look at the persons behind the veil.
• According to this principle, when company has been formed and
registered under the Companies Act, all dealings with the company will be
in the name of the company and the persons behind the company will be
disregarded or will not be looked at. This principle was considered as a
shield. This veil was used for fraud and improper conduct.
• Therefore it became necessary for the courts to break through the veil and
look at the persons behind the company who were the real beneficiaries.
• Only in appropriate circumstances the courts are allowed to lift the
corporate veil and in exceptional cases -

14. 1. UNDER STATUTORY PROVISIONS – Eg: reduction of members below the statutory
minimum, failure to refund application fee, misdiscription of company’s name,
fraudulent trading.
2. UNDER JUDICIAL INTERPETATION – Eg: Protecting the revenue, Public policy’
SIR DINSHAW PETIT CASE – sham company to evade taxes

15. WINDING UP OF A COMPANY
• Winding up is a process by which the management of the companies
affairs is taken out from its directors, the assets are realized and liabilities
are discharged out of proceeds of realization and any surplus of assets is
returned to its members or shareholders.
• The main purpose of winding up of a company is to realize the assets and
pay the debts of the company.
• On dissolution the company ceases to exist.
• A company may be wound up even when it is perfectly solvent.
• A company can never be declared bankrupt although its unable to pay
debts, it can only be adjudged insolvent.
• Winding up and dissolution - Difference

16. MODES OF WINDING UP
• Compulsory winding up / Winding up by Court
 The company has passed special resolution to wind up by the Court.
 Default in holding Statutory meeting
 Company does not commence its business within 1 year of its
incorporation or suspends its business for a whole year.
 The number of its members came down below 2 and 7 incase of private
and public company respectively.
 Court is of the opinion of just and equitable grounds.
 The company has defaulted in filing balancesheet and P&L A/c with the
registrar for 5 consecutive years.

17. • Voluntary winding up -
a) Members Voluntary winding up – In case of a solvent company which
has ability to pay its debts in full. The majority of directors must give the
declaration of solvency certificate
b) Creditors Voluntary winding up –
Meeting of creditors
Notice to registrar