Companies Act, 2013 was brought into force as an Act to consolidate & amend the law relating to companies. It extends to the whole of India. The Companies Act, 2013 consists of a total of 29 Chapters, 7 Schedules and 470 sections.
|Classification of Companies|
|Basis the size||One Person Company||Small Company|
|Basis the number of members||One Person Company||Private Company Section 2(68)||Public Company Section 2(71)|
|Basis the Control||Holding Company||Subsidiary Company (Vertical and Horizontal||Associate Company (Section sec 2(6))|
|Basis the liability||Limited by shares and guarantee||Unlimited|
|Basis the capital||Listed Company||Unlisted Company|
Having minimum paid up capital of 1 lakh. Restricts transferability of shares. Limits number of members to 200. Prohibits invitation to public for subscription to any securities.
PUBLIC LIMITED COMPANY
A public limited company is a joint stock company. It is governed under the provisions of the Indian Companies Act, 2013. While there is no limit on the number of members, it is formed by the association of persons voluntarily with a minimum paid up capital of 5 lakh rupees. Transferability of shares have no restriction. The company can invite public for subscription of shares and debentures. The term public limited is added to its name at the time of incorporation.
INCORPORATION OF COMPANIES
A Memorandum of Associate (Section 4) and an Articles of Association (Section 5) is required for the purposes of incorporation of a company. Section 7(1) of Companies Act, 2013 lists the documents and information for registration. Documents to be filed at the time of incorporation should also contain name of first directors, their Director Identification Number (DIN), address etc, along with their consent and particulars of interest. (Section 7(1)(f) of Companies Act, 2013).
The Companies Act, 2013 requires that a company shall have a maximum of 15 directors and appointing more than 15 directors can only be done after passing a special resolution by its shareholders.
Further, it requires appointment of at least one woman director on the board for prescribed class of companies. It also requires that company should have at least 1 resident director i.e. who has stayed in India for a total period of not less than 182 (hundred and eighty two days) in the previous calendar year.
All existing directors must have Directors Identification Number (“DIN”) allotted by central government. Directors who already have DIN need not take any action. However, Directors not having DIN should initiate the process of getting DIN allotted to him and inform the respective companies on which he is a director. The Company, in turn, has to inform the Registrar of Companies (“ROC”).
SHARE CAPITAL – CHAPTER IV – SECTION 43 – 72
Equity share capital, with reference to any company limited by shares, means all share capital which is not preference share capital and preference share capital with reference to any company limited by shares, means that part of the issued share capital of the company which carries or would carry a preferential right with respect to—
- payment of dividend, either as a fixed amount or an amount calculated at a fixed rate, which may either be free of or subject to income-tax; and
- repayment, in the case of a winding up or repayment of capital, of the amount of the share capital paid-up or deemed to have been paid-up, whether or not, there is a preferential right to the payment of any fixed premium or premium on any fixed scale, specified in the memorandum or articles of the company [section 43].
NATIONAL COMPANY LAW TRIBUNAL AND APPELLATE TRIBUNAL – CHAPTER XXVII
The Central Government shall, by notification, constitute, with effect from such date as may be specified therein, a Tribunal to be known as the National Company Law Tribunal consisting of a President and such number of Judicial and Technical members, as the Central Government may deem necessary, to be appointed by it by notification, to exercise and discharge such powers and functions as are, or may be, conferred on it by or under this Act or any other law for the time being in force.