Tamilnadu Samacheer Kalvi 12th Commerce Notes Chapter 26 Companies Act, 2013 Notes
→ The concept of ‘Company’ or ‘Corporation’ in business was dealt with, in 4th century BC itself during ‘Arthashastra’ days.
→ The Companies Act 1956 came into force on 1 st April, 1956. Since then, it has been amended ‘from time to time.
→ The New 2013 Companies Act got the assent of President on 29th August, 2013 but it was passed in the Lok Sabha on 18th December, 2012 and in Rajya Sabha on 8th August, 2013.
→ The Act 2013 consists of 29 Chapters, 470 Sections and 7 Schedules as against 13 chapters, 658 Sections and 15 Schedules in 1956 Act.
→ Body corporate means a corporate entity which has a legal existence. According to section 2(11) “body corporate” or “corporation” includes a private company, public company, one personal company, small company, Limited Liability Partnerships, and foreign company incorporated outside India.
→ ‘Formation of a Company’ has been divided into four stages: 1) Promotion; 2) Registration; 3) Capital Subscription; and 4) Commencement of Business.
→ Promotion stage begins when the idea to form a company comes in the mind of a person. The person who envisage the idea is called a‘promoter’.
→ The second stage in the formation of the company is incorporation or registration.
→ After scrutinizing all the documents filed by the promoter the registrar enters the name of the company in the Register of Companies and charges a registration fee. The registrar then issues the “Certificate of Incorporation”.
→ Memorandum of Association is the charter of a company. It defines the area within which the company can operate.
→ The second most important document is Articles of Association. This document contains rules and regulations for the internal management of the company.
→ Capital Subscription is the third stage of the company.
→ The term “Capital” is viewed by a layman as the money, which a businessman invests in the business and in case of a company raise the capital by issue of shares.
→ The term Share is viewed by a layman as a fraction or portion of total capital of the company which have equal denomination.
→ The shares can be of two types: (i) Equity Share Capital (ii) Preference Share Capital .
→ The share of a company which do not have any preferential rights with regard to dividend and repayment of share capital is called as equity or ordinary share.
→ The term ‘preference shares’ mean that part of the share capital, the holders of which have a preferential right in dividend and repayment of share capital.
→ Sweat Equity Shares means issue of shares to employees or directors at a lower price for cash or other than cash.
→ Bonus share means to utilize the company’s reserves and surpluses, issue of shares to existing shareholders.
→ Right shares are issued to the existing shareholders to increase the share capital.
→ Every company, limited by shares, whether it is public or private must issue the share certificate to its shareholders except in case, where shares are held in dematerialization system.
→ Debentures mean that a company can borrow from the general public by issuing certificates for a fixed period at a fixed rate of interest.