Tamilnadu Samacheer Kalvi 11th Commerce Notes Chapter 6 Joint Stock Company Notes

→ A joint stock company as a distinct type of business organisation evolved to overcome the limitations of sole trader and partnership concerns.

→ The Companies Act 2013 is an Act of the Parliament of India which regulates incorporation of a company, responsibilities of a company, directors, liquidation of a company, etc.

→ “A company is an association of many persons who contribute money or money’s worth to a common stock and employ it in some trade or business, and who share the profit and loss (as the case may be) arising there from.” – James Stephenson

→ “A company is an artificial person created by-law having a separate entity with a perpetual succession and a common seal.” – L.H. Haney

→ A company as an entity has many distinct features which together make it a unique organization.

→ Chartered companies are established by the King or Queen of a country.

→ Statutory companies are established by a Special Act made in Parliament/’State Assembly.

→ According to Section 25, the Central Government may, by license, grant that an association may be registered as a company with limited liability, without using the words ‘limited’ or ‘private limited’as part of its name.

→ Private limited company is a type of company which is formed with minimum two shareholders and two directors.

→ Public Company means a company which is not a private company.

→ An unlimited company is a company in which the liability of its members is not limited by its Memorandum.

→ Apublic enterprise incorporated under the Indian Companies Act, 1956 is called a government company.

→ A foreign company means a company which is incorporated in a country outside India under the law of that country.

→ A Memorandum of Association (MOA) is a legal document prepared in the formation and registration process of a limited liability company to define its relationship with shareholders.

→ The association clause confirms that shareholders bound by the MOA are willingly associating and forming a company.

→ The Articles of Association (AQA) is a document that contains the purpose of the company as well as the duties and responsibilities of its members.

→ A prospectus is “the only window through which a prospective investor can look into the soundness of a company’s venture”.

Samacheer Kalvi 11th Commerce Notes