DIFFERENCEBETWEEN

Company

ContactNo.9331963835,9239521128,9433352926.

*CSKUMARCHANDRAMOHAN*CSPUJAMOHAN*
(SpecialisedinCA,CS,CWACoachingFoundation/Executive)
RealStudyCentre,148/14,N.S.C.BoseRoad,NearTollygungeMetroStation,Kolkata40.

KUMARLAWCLASSES

SupplementaryNotesCompanyLawForDecember,2012Exam

Partnership

Acompanyisadistinctlegalperson.

A partnership firm is not distinct from the several persons who

composeit.
Property of the Company belongs to the company and not to the Property of the Partnership firm is the property of the individuals
individualscomprisingit.
comprisingit.
The creditors of a company can proceed only against the company The creditors of a partnership firm are creditors of individual
andnotagainstitsmembers.
partnersandadecreeagainstthefirmcanbeexecutedagainstthe

partnersjointlyandseverally.
Membersofacompanyarenotitsagents.
Partnersaretheagentsofthefirm.
AmemberofacompanycancontractwithhisCompany.
Apartnercannotcontractwithhisfirm.

Company

HinduJointFamilyBusiness

Acompanyconsistsofheterogeneous(variedordiverse)members.

HUFconsistsofhomogenous(unvarying)memberssinceitconsists
ofmembersofthejointfamilyitself.
Company is an artificial person and is formed and registered by HUFiscreatedbytheoperationoflaw.
complying with the prescribed formalities prescribed under the
CompaniesAct.
A person becomes member of a company by acquiring share and A person becomes a member of Joint Hindu Family business by
whosenameisenteredintheRegisterofMembers.
virtueofbirth.
Registrationofacompanyiscompulsory.
Noregistrationiscompulsoryforcarryingonbusinessforgainbya
HinduJointFamilyevenifthenumberofmembersexceedstwenty.

Company

Corporation

A company is formed and registered by complying with the ACorporationisformedunderanylawforthetimebeinginforce.

prescribedformalitiesprescribedundertheCompaniesAct.
Acompanyincludesacorporationsole,cooperativesociety.
Acorporationincludesacompanybutdoesnotincludecorporation
sole,cooperativesociety.
CompanyisnarrowtermthanCorporation.
CorporationisbroadertermthanCompany.
Liabilityofmembersarelimited.
Liabilityofmembersareunlimited.
Corpusisknownassharecapital.
Corpusisknownascapital.

Company

LimitedLiabilityPartnership(LLP)

A Company is governed by Companies Act, 1956 and various rules

madethereunder.
The word Limited or Private Limited is added with the name of a
company.
EachDirectorrequiredto haveaDirectorIdentificationNumber(DIN)

LLP is governed by The Limited Liability Partnership Act, 2008 and

variousRulesmadethereunder.
The word LLP or Limited Liability Partnership is added with the
nameofaLLP.
Each Designated partner required to have a DPIN before being

ContactNo.9331963835,9239521128,9433352926.

*CSKUMARCHANDRAMOHAN*CSPUJAMOHAN*
(SpecialisedinCA,CS,CWACoachin000000000gFoundation/Executive)
RealStudyCentre,148/14,N.S.C.BoseRoad,NearTollygungeMetroStation,Kolkata40.

KUMARLAWCLASSES

SupplementaryNotesCompanyLawForDecember,2012Exam

beforebeingappointedasaDirectorofanycompany.
appointedasaDesignatedPartnerofLLP.
MinimumtwoforprivateCompany andminimumsevenpersonsare Minimumtwopartners arerequiredfortheformationofaLLP.
requiredforpubliccompanyaspertheCompaniesAct,1956.
Maximum 50 in case of Private Company and Unlimited number of Nocapofmaximumnumberofitspartners.
memberinPublicCompanyaspertheCompaniesAct,1956.

PrivateCompany

PublicCompany

IncaseofPrivateCompany,Minimum2membersandMaximum50
members.
The name of a Private company must end with the word Private
Limited.
InaPrivatecompany,therighttotransferthesharesisrestrictedby
thearticlesofassociation.
A private company can commence its business soon after obtaining
thecertificateofincorporation.

IncaseofPublicCompany,Minimum 7membersandnoMaximum
limitofmembers.
ThenameofaPubliccompanymustendwiththewordLimited.

APrivateCompanymusthaveatleast2Directors.

ThesharesofaPublicCompanyisfreelytransferable.
APubliccompanycancommencebusinessonlyafterobtainingthe
certificate of incorporation as well as the certificate of
commencementofbusiness.
A PublicCompanymusthaveatleast3Directors.

CompanyLimitedbyShares

CompanyLimitedbyGuarantee

Acompanyinwhichtheliabilityofitsmembersis determinedonthe
basisoftheamount,ifany,remainingunpaidontheshareISheldby
themistermedasacompanylimitedbyshares'.

Theliabilityofthemembersislimitedtothe extentofnominalvalue
ofsharesheldbythem.

The liability can be enforced against the members of the company

duringtheexistenceofthecompanyorduringthewindingupofthe
company.

A company having the liability of its members limited by its

memorandum to such amount as the members may respectively
undertaketocontributetotheassetsofthecompanyintheeventof
itsbeingwoundupistermedasa'companylimitedbyguarantee'.
Theliabilityofthemembers istopaytheamountguaranteedbyhim
onlyifthecompanyiswoundupwhileheisamemberorwithinone
yearafterheceasestobeamember.
The liability can be enforced against the members of the company
during the winding up of the company. The members cannot be
asked to pay the guaranteed amount during the life time of the
company.

HoldingCompany

SubsidiaryCompany

DefinedunderSection2(19)oftheCompaniesact.
DefinedunderSection2(47)oftheCompaniesact.
Holding Company means a holding Company within the meaning of ACompanyshallbedeemedtobeasubsidiaryCompanyofanother
Section4oftheCompaniesact.
if,thatothercompanyholdsmorethanhalfofthenominalvalueof
itsequitysharecapitalorcontrolsthecompositionofitsBoardorit
is a subsidiary company of any company which is subsidiary
companyoftheothercompany.

MemorandumofAssociation

ContactNo.9331963835,9239521128,9433352926.

*CSKUMARCHANDRAMOHAN*CSPUJAMOHAN*
(SpecialisedinCA,CS,CWACoachingFoundation/Executive)
RealStudyCentre,148/14,N.S.C.BoseRoad,NearTollygungeMetroStation,Kolkata40.

KUMARLAWCLASSES

SupplementaryNotesCompanyLawForDecember,2012Exam

ArticlesofAssociation

MOA is the charter of the company and defines the scope of its
activities.
MOA cannot be altered except in the manner and to the extent
providedbytheact.
MOAisasupremedocumentofthecompany.

AOA of the company is a document which regulates the internal

managementofthecompany.
AOA being only the byelaws of the company can be altered by a
specialresolution.
AOAaresubordinatetothememorandum.Itcannotalterorcontrol
thememorandum.
Everycompanymusthaveitsownmemorandum.
A company limited by shares need not register its AOA. In such a
casetableAapplies.
A company cannot depart from the provisions contained in its Anythingdoneagainsttheprovisionsofarticles,butwhichisintra
memorandum,andifitdoes,itwouldbeultraviresthecompany.
viresthememorandum,canberatified.

ShelfProspectus

InformationMemorandum

ItisdefinedunderSection60AoftheCompaniesact,1956.
'Shelf Prospectus' means a prospectus issued by any financial
institutionorbankforoneormoreissuesofthesecuritiesorclassof
securitiesspecifiedinthatprospectus.
A Company filing a Shelf Prospectus with the Registrar shall not
requiretofileprospectusafreshateverystageofofferofsecurities
byitwithinaperiodofvalidityofsuchprospectus.

ItisprovidedunderSection60BoftheCompaniesact,1956.
A public company making an issue of securities may circulate
information memorandum to the public prior to filing of a
prospectus.
However, It shall require to file an Information Memorandum at
everystageofofferofsecuritiesbyit.

PreferenceShareCapital

EquityshareCapital

Preference shares are those shares which enjoy preference as Equitysharesarethoseshareswhodonotenjoyanypreferenceas

regardspaymentofdividendandrepaymentofcapital.
regardspaymentofdividendandrepaymentofcapital.
Therateofdividendonpreferencesharesisfixed.
The rate of dividend on equity shares is not fixed and usually
dependsontheprofitabilityofthecompany.
Preferenceshareholdersarepaidtheircapitalfirst.
Equity shareholders are paid their capital after the preference
shareholdersarepaid.
Preferenceshareholdersdonothavenormalvotingrights.
Equityshareholdershavenormalvotingrights.
Preference shareholders receives dividend in preference of equity Equitysharesreceivedividendafteritispaidtopreferenceshares.
shareholders.

NominalCapital

IssuedCapital

This is the sum stated in the memorandum of association of a

companylimitedbysharesasthecapitalofthecompanywithwhich
it is registered. It is the maximum amount which the company is
authorizedtoraisebyissuingshares.

It is that part of the authorised or nominal capital which the

company issues for the time being for public subscription and
allotment.Thisiscomputedatthefaceornominalvalue.

Thisisthecapital,onwhichthecompanyhadpaidtheprescribedfee
atthetimeofregistration;henceitisalsocalledRegisteredCapital.

ContactNo.9331963835,9239521128,9433352926.

*CSKUMARCHANDRAMOHAN*CSPUJAMOHAN*
(SpecialisedinCA,CS,CWACoachingFoundation/Executive)
RealStudyCentre,148/14,N.S.C.BoseRoad,NearTollygungeMetroStation,Kolkata40.

KUMARLAWCLASSES

SupplementaryNotesCompanyLawForDecember,2012Exam

SubscribedCapital

CalledupCapital

It is that portion of the issued capital at face value which has been Itisthatportionofthesubscribedcapitalwhichhasbeencalledup
subscribed for or taken up by the subscribers of shares in the ordemandedonthesharesbythecompany.
company.

ReserveCapital

CapitalReserve

Reserve Capital is that part of the uncalled capital of a company

whichthelimitedcompanydecidebypassingaspecialresolution,not
tocallexceptinthespecifiedevent.
Reservecapitalcanbeusedbythecompanyonlyincaseofwinding
upofthecompany.
Reservecapitalisnotdisclosedinthebalancesheetofthecompany.
Reservecapitalcannotbeusedforthatpurpose.

Capital reserve is created out of capital profits (profit due to

reevaluation of assets) and therefore it is not available for
distributionasdividendtotheshareholders.
Capitalreservecanbeusedbycompanyatanytimeforpurchasing
longtermassetsbythecompany.
Capitalreserveisshownontheliabilitiessideofthebalancesheet.
Capital reserve can be used by the company to write off capital
losseswhicharisesduetosellingofassetsatlowerpricesthanthe
bookvalueofthatasset

Shares
Asharehasanominalvalue.
Asharecannotbetransferredintosmallfractions.
Sharescandirectlybeofferedtopublic.

Allsharesbeardistinctivenumber.
Asharemaynotbefullypaidup.

Stock
Stockhasnonominalvalue.
Stockcanbetransferredintoanyfractions.
Unlike the shares, stock cannot be offered by the company to the
public in the first instance. Only fully paid up shares can be
convertedintostockbythecompany.
Stockdiscloses theconsolidatedvalueofthesharecapital.Fraction
ofstocksdoesnotbearanynumber.
Astockisalwaysfullypaidup.

BonusShares

RightShares

Bonussharesmeansnewsharesgivenfreeofcosttoalltheexisting
shareholdersofthecompany,inproportiontotheirholdings.

Forexample,acompanyannouncingbonusissueof1:5,isissuingone
(new)bonusshareforeveryfivesharesheldbytheshareholdersof
thecompany.

Rights issues are a proportionate number of shares available to all

theexistingshareholdersofthecompany,whichcanbeboughtata
givenprice(usuallyatadiscounttocurrentmarketprice)forafixed
periodoftime.

For example, a company announcing rights issue of 2:3 at Rs. 100

per share (current share price Rs. 130 per share), is issuing two
(new)rightssharesforeverythreesharesheldbytheshareholders
ofthecompanyatRs.100pershare.

ContactNo.9331963835,9239521128,9433352926.

*CSKUMARCHANDRAMOHAN*CSPUJAMOHAN*
(SpecialisedinCA,CS,CWACoachingFoundation/Executive)
RealStudyCentre,148/14,N.S.C.BoseRoad,NearTollygungeMetroStation,Kolkata40.

KUMARLAWCLASSES

SupplementaryNotesCompanyLawForDecember,2012Exam

Equity

Debenture

Shareholdersareownersofthecompany.
Ashareholderenjoystherightsofproprietorshipofacompany.
Ashareholderhasarightofcontrolovertheworkingofthecompany
byattendingandvotinginthegeneralmeeting.
Ashareholderisentitledtoreceivedividendwhenthereareprofits.
The rate of dividend varies from year to year depending upon the
amountofprofit.
Shareholders cannot be paid back (except in case of redeemable
preferenceshares)solongasthecompanyisagoingconcern.

Debentureholdersarecreditorsofthecompany.
Debentureholdercanenjoytherightsofalenderonly.
Debentureholdersdonothaveanyvotingright,andtherefore,they
areunabletoexerciseanysuchinfluence.
Debentureholdersareentitledtointerestatafixedratewhichthe
companymustpaywhetherornotthereareprofits.

PreferenceShares

Debentures

PreferenceShareholdersareeffectivelyownersoftheCompany.
PreferenceShareholdersreceiveprofitintheformofdividends.
If there is no profit, the payment of dividend to Preference
Shareholderscanbepostponed.
Incaseofdissolution,PreferenceShareholdersholdersarepaidlater
thanDebentureholder.

DebentureholdersarecreditorsoftheCompany.
Debentureholdersreceiveafixedrateofinterest.
Interestispaidtodebentureholdersregardlessofwhetherornota
profithasbeenmade.
In case of dissolution of firms debenture holders are paid first as
comparedtoPreferenceshareholder.

Debentures are normally issued for a specified period after which

theyarerepaid.

SweatEquity

EmployeesStockOption(ESOP)

SweatEquitySharesmeansequitysharesissuedbythecompanyto
employeesordirectorsatadiscountorforconsiderationotherthan
cashforprovidingknowhowormakingavailablerightsinthenature
of intellectualproperty rights or value additions, by whatever name
called.
Sweat Equity is grant of shares at discount or without monetary
considerations.
SweatEquitycanbeissuedtothepromotersoftheCompany.
Minimumlockinperiodof3yearsforSweatEquity.

EmployeeStockOption(ESOP)meanstheoptiongiventothewhole
timedirectors,officersoremployeesofacompany,whichgivessuch
directors,officersoremployeesthebenefitorrighttopurchaseor
subscribeatafuturedate,thesecuritiesofferedbythecompanyat
apredeterminedprice.
ESOP/ESOS is grant of option to purchase share at predetermined
pricegiventoemployees.
ESOP/ESOScannotbeissuedtothepromotersorpromotergroup.
Lockinperiodof1yearforESOS/ESPS.

AlterationofShareCapital

ReductionofShareCapital

Itisgovernedbysection94oftheCompaniesAct,1956.
Itisrequiredtobedonebyordinaryresolution.
Itdoesnotrequiredconfirmation bythecourt
Alterationofsharecapitalmaybedoneinthefollowingmanner:
1.Increasingitsnominalcapitalbyissuingnewshares.
2.Consolidatinganddividingalloranyofitssharecapitalintoshares
oflargedenomination.

Itisgovernedbysection100oftheCompaniesAct,1956.
Itisrequiredtobedonebyspecialresolution
Itrequiresconfirmationbythecourt.
Reductionofsharecapitalmaybedoneinthefollowingmanner:
1.Extinguishingorreducingtheliabilityofmembersinrespectofthe
capitalnotpaidup.
2.Writing off or canceling any paid up capital which is in excess of

ContactNo.9331963835,9239521128,9433352926.

*CSKUMARCHANDRAMOHAN*CSPUJAMOHAN*
(SpecialisedinCA,CS,CWACoachingFoundation/Executive)
RealStudyCentre,148/14,N.S.C.BoseRoad,NearTollygungeMetroStation,Kolkata40.

KUMARLAWCLASSES

SupplementaryNotesCompanyLawForDecember,2012Exam

3.Convertingfullypaidupsharesintostockorviceversa.
theneedsofthecompany.
4.Sub dividing its shares or any of them into shares of smaller 3. Paying off any paid up share capital which is in excess of the
amount.
needsofthecompany.
5. Canceling shares which have not been taken up and diminishing
theamountofsharecapitalbytheamountofthesharessocancelled.

Loan
Aloanisrepayabletheminuteitisincurred.
Obligationtorepayisimmediate.

Deposit

Deposit
Deposits are repayable upon the maturity date fixed or in
accordancetothetermsoftheagreement.
Noimmediateobligationtorepay.

Debenture

Deposit are repayable after the expiry of six months but not later NosuchlimitincaseofDebenture.
than thirty six months from the date of acceptance or renewal of
suchdeposits.
Depositsarenottransferable.
Debenturesaretransferable.

Debenture
Itisaninstrumentofdebt.
Debentureneednotbefullypaidup.
Itcanbetransferredwholly.
Itisidentifiedbydistinctnumber.

Mortgage

DebentureStock
Itisadebtorsumsecuredbyaninstrument.
Debenturestockmustbefullypaidup.
Itcanbetransferredinfraction.
Nodistinctnumber

Charges

Amortgageiscreatedbytheactoftheparties.

A charge may be created either through the act of parties or by

operationoflaw.
AmortgagerequireregistrationundertheTransferofPropertyAct.
A charge created by operation of law does not require the
registration But a charge created by act of parties requires
registration.
Amortgageisforafixedterm.
A chargemaybeinperpetuity.
A mortgage is a transfer of an interest in specific immovable A charge only gives a right to receive payment out of a particular
property.
property.
A mortgage is a transfer of an interest in a specific immovable Thereisnosuchtransferofinterestinthecaseofacharge.Charge
property.
does not operate as transfer of an interest in the property and a
transferee of the property gets the property free from the charge
providedhepurchasesitforvaluewithoutnoticeofthecharge.

ShareCertificate

ShareWarrant

The holder of a share certificate is a registered member of the The bearer of a share warrant is not a registered member of the
company.
company.

Holderofasharecertificateisessentially amemberofthecompany.

ContactNo.9331963835,9239521128,9433352926.

*CSKUMARCHANDRAMOHAN*CSPUJAMOHAN*
(SpecialisedinCA,CS,CWACoachingFoundation/Executive)
RealStudyCentre,148/14,N.S.C.BoseRoad,NearTollygungeMetroStation,Kolkata40.

KUMARLAWCLASSES

SupplementaryNotesCompanyLawForDecember,2012Exam

Thebearerofasharewarrantcanbeamemberonlyifthearticles
soprovideandonlyforthepurposesasdefinedinthearticles.
Theissueofasharecertificatedoesnotrequiretheapprovalofthe Share warrant can be issued only if the articles authorise its issue
CentralGovernment.
andtheCentralGovernmenthasaccordeditspreviousapproval.
Bothpublicandprivatecompaniesmustissuesharecertificates.
Sharewarrantscanbeissuedonlybypubliccompanies.
Asharecertificateisissuedinrespectofpartlyorfullypaidshares.
Asharewarrantcanbeissuedonlyinrespectoffullypaidshares.

ForfeitureofShare
ForfeitureisinitiatedbytheCompanyfornon paymentofcalls.
Byforfeitureofshares,thecompanypenalizesthemember.
Forfeitureofsharesmaybeinitiatedfornon paymentofcall.

SurrenderofShare
Itisinitiatedbytheshareholdersonhisownforanyotherreason.
In surrender of shares, new shares are bought in exchange of
surrenderofoldshares.
Surrender shares may be accepted in the good faith in its own
interest the shares which the shareholder is voluntarily
surrendering.

TransferofShare

TransmissionofShare

Transferisavoluntaryactofamember.
Considerationisalwaysinvolvedintransfer.
Transfer is effected as transfer ofproperty when a member intends
tosellit.
Incaseoftransfer,thememberhastoexecuteavalidinstrumentof
transfer.

Transmissionisbyoperationoflaw.
Noquestionofconsideration,hencenostampduty,etc.
Transmissiontakesplaceonlyonthedeath,bankruptcyandlunacy
ofthemember.
Incaseoftransmission,executionofinstrumentisnotpossible.

LienonShare
Lien can be exercised in respect of amount due on the shares and
amountsdueonotheraccounts.
A lien is a kind of security for a debt and to be retained until the
paymentofdebtinfull.
Alienisenforcedbysaleofsharestoadjusttheoutstandingdues.
Intheeventofexerciseoflien,bysaleofshares,surplus,ifany,isto
bereturnedtothemember.
Incaseoflien,itdoesnotresultinreductionofcapitalassharesare
soldtorecoverthedueamount.

SharesinPhysicalForm
Sharecertificatesareissuedinphysicalform.
Stampdutyistobepaidontransferdeed.

ForfeitureofShare
Rightofforfeitureisexercisedforamountsdueonsharesonly.
Forfeitureislikeapenaltyclausetoenforcethepaymentofmoney
dueonsharesintime.
Forfeitureisactofdeprivinghimofrightsinforfeitedshares.
In the event of forfeiture, the member cannot claim refund of
moneyalreadypaidbyhim.
Incaseofforfeitureitmayresultinreductionofcapitalifsharesare
notsoldorreissued.

SharesinDematerializedform
Sharesareissuedinelectronicform.
Nostampdutyispaidontransfer.

ContactNo.9331963835,9239521128,9433352926.

*CSKUMARCHANDRAMOHAN*CSPUJAMOHAN*
(SpecialisedinCA,CS,CWACoachingFoundation/Executive)
RealStudyCentre,148/14,N.S.C.BoseRoad,NearTollygungeMetroStation,Kolkata40.

KUMARLAWCLASSES

SupplementaryNotesCompanyLawForDecember,2012Exam

Therearechancesoftheft,lossetc.
Nochanceoftheft,forgeryorloss.
Notrequiredtoopenaccountwithanybody.
Itisnecessarytoopenademataccountwithdepositoryparticipant.
Transfer of shares takes longer time due to physical transit of Immediatetransferofshares,asittakesintheelectronicform.
documents.

WholeTimeSecretary

SecretaryinWholeTimePractice

Section 383A(1) of the Companies act, 1956 provides that every

companyhavingpaidupcapitalofnotlessthan5croresshallhavea
WholeTimeCompanySecretary.

The whole time Secretary shall be appointed as a whole time

employeeoftheCompany.
Thewholetimesecretaryhasstatutoryandgeneraldutiesprescribed
intheCompaniesact.HealsoactsasPrincipalofficerundervarious
acts. He also acts as officer in default as per Section 5 of the
Companiesact.

Section2(45A)ofthecompaniesact,1956providesthataSecretary
whoshallbedeemedtobeinpracticewithinthemeaningofsection
2(2)oftheactandwhoisnotinfulltimeemployment.

HeisamemberoftheInstituteofCompanySecretariesofIndiaand
hasacertificateofPracticeissuedbytheICSI.
Unlike,thewholetimesecretary,hedoesnothaveanystatutoryor
Administrativeduty.Hisareaofpracticehavebeenspecifiedandhe
mustcomplywiththesame.

ManagingDirector

Manager

Managing Director is defined under Section 2(26) of the Companies

act,1956.
A Managing Director means a director who, by virtue of an
agreement with the company or of a resolution passed by the
companyingeneralmeetingorbyitsboardofdirectorsorbyvirtue
of its memorandum or articles of association is entrusted with
substantial powers of management which would not otherwise be
exercisablebyhimandincludesadirectoroccupyingthepositionofa
managingdirector,bywhatevernamecalled.
OnlyaDirectorcanbeappointedas ManagingDirector.
TheremaybetwoormoreManagingDirectorsinaCompany.
AManagerbyvirtueofhisofficehasthemanagementofthewhole
orsubstantiallythewholeoftheaffairsofacompany.

ManagerisdefinedunderSection2(26)oftheCompaniesact,1956.
A Manager means an individual who subject to the
superintendence,controlanddirectionoftheBoardofDirectorshas
the management of the whole or substantially the whole of the
affairs of a company and includes a director or any other person
occupyingthepositionofamanagerbywhatevernamecalledand
whetherunderacontractofserviceornot.

ManagermayormaynotbeaDirector.
ThereshallonlyoneManagerinaCompany.
A Managing Director is entrusted with substantial powers of
managementwhichwouldnototherwisebeexercisablebyhim.

WholeTimeChairman

PartTimeChairman

A chairmancummanaging director (CMD) is sometimes called a A director, who is not a wholetime director of the company, is
wholetimechairman.
calledaparttimechairman.

Motion

Resolution

Motion is a proposal submitted for a discussion. A motion becomes a Adecisionadoptedbymeansofaresolution.

resolutiononlyaftertherequisitemajorityofmembershaveadoptedit.

ContactNo.9331963835,9239521128,9433352926.

*CSKUMARCHANDRAMOHAN*CSPUJAMOHAN*
(SpecialisedinCA,CS,CWACoachingFoundation/Executive)
RealStudyCentre,148/14,N.S.C.BoseRoad,NearTollygungeMetroStation,Kolkata40.

KUMARLAWCLASSES

SupplementaryNotesCompanyLawForDecember,2012Exam

Adjournment

Postponement

Adjournment means suspending a meeting after it has been duly

commenced to be resumed at a later time or date fixed in that
meetingitselfatthetimeofsuchadjournmentortobedecidedlater
on.
Adjournmentistheactofmeetingitself.

Postponement of a meeting is to put off or defer the holding of a

meetingbeforethedateoriginallyfixedforthemeetinghasarrived.

Postponementistheactoftheconveningauthority

StatutoryBooks

StatisticalBooks

The Companies Act, 1956, requires certain books to be kept by a

companyformaintainingarecordofitsdifferentactivitiesinorderto
safeguard the interests of the shareholders and creditors. These
booksareknownasStatutoryBooks.

Fewofthemareasfollows:
(1). Register of investments not held by it in its own name (2).
Registeroffixeddeposits.(3).RegisterofSecuritiesboughtback(4).
Registerofcharges(5).RegisterandIndexofMembers(6).Register
and Index of Debenture holders (7). Minutes Book of Board and
General Meetings (8). Dividend Register (9). Register of directors,
managing directors, manager and secretary (10). Register of
DirectorsShareholdings.

Althoughthereisnolegalcompulsion,acompanyusuallymaintains
anumberofstatisticalbooksinordertokeepcompleterecordsof
thenumerousdetailsconnectedwiththebusinessoperations.

Fewofthemareasfollows:
(1).ShareApplicationandAllotmentBook(2).ShareCallBook(3).
Share Certificate Book (4). Share Transfer Book (5). Debenture
InterestBook(6).DirectorsAttendanceBook(7).DividendMandate
Register (8). Share Warrants Register (9). Register of lost share
certificates(10).Registeroflostsharecertificates.

Statutoryaudit

Specialaudit

The Statutory Auditor is appointed by the Company in accordance

withtheprovisionofSection224oftheCompaniesact.

First Auditor is appointed within one month of incorporation of the

Company.
Under Statutory audit, Auditors Report is submitted to the
ShareholderattheAnnualGeneralMeeting.

Section 233A of the Companies act empowers the Central

Government to appoint either any Chartered Accountant or the
companys own auditor to conduct a special audit in certain
circumstances.

Under Special Audit, auditors submit their report to the Central

Government.

Dividend

Interest

Dividendispaidonpreferenceandequityshares

A dividend becomes a debt only after it has been declared by the

company.
Generally,Dividendisnotdeclaredandpaidincaseofloss.
Dividendisanappropriationofprofits.

Interest is paid on debentures and long term and short term

loans/borrowingsincludingfixeddeposits.
Interest is a debt which like all debts is paid out of the companys
assetsgenerally.
Interestispaidevenincaseofloss.
Interestisachargeonprofits.

ContactNo.9331963835,9239521128,9433352926.

*CSKUMARCHANDRAMOHAN*CSPUJAMOHAN*
(SpecialisedinCA,CS,CWACoachingFoundation/Executive)
RealStudyCentre,148/14,N.S.C.BoseRoad,NearTollygungeMetroStation,Kolkata40.

KUMARLAWCLASSES

SupplementaryNotesCompanyLawForDecember,2012Exam

Members'VoluntaryWindingUp

Creditors'VoluntaryWindingUp

A members' voluntary winding up results where, before convening

the general meeting of the company at which the resolution of
windingupistobepassed,themajorityofthedirectorsfilewiththe
Registrarastatutorydeclarationofsolvency.
Inamembers'voluntarywindingup,thecreditorsdonotparticipate
directlyinthecontroloftheliquidation,asthecompanyisdeemedto
besolvent
Thereisnomeetingofcreditorsinamembers'voluntarywindingup.

Acreditors'voluntarywindingupisonewherenosuch declaration
isfiled.

WindingupsubjecttotheSupervisionoftheCourt

VoluntaryWindingup

In the case of winding up subject to the supervision of Court,

LiquidatormaybeappointedbytheCourt.
After commencement of winding up any transfer of
shares/disposition of property can take place only with the
permission of the Court in the case of winding up subject to the
supervisionofCourt.
After commencement of winding up subject to the supervision of
Court, any attachment, distress or execution against the company
withouttheleaveoftheCourt,isvoid.

Inthecaseofvoluntarywindingup,Liquidatorisappointed bythe
members/creditorsandtheCourthasnoroleinthisregard.
Transfer of shares/disposition of property in the case of voluntary
windingupcantakeplaceonlywiththepermissionoftheliquidator.

Inacreditors'voluntarywindingup,thecompanyisdeemedtobe
insolvent and, therefore, the control of liquidation remains in the
handsofthecreditors.
Inacreditors'voluntarywindingup,meetingofcreditorshavetobe
calledatthebeginning.
Inamembers'voluntarywindingup,theliquidatorcanexercisesome Inacreditors'voluntarywindingup,hecandosowiththesanction
of his powers with the sanction of a special resolution of the of the Court or the Committee of Inspection or of a meeting of
company.
creditors.

LimitedLiabilityPartnership(LLP)

However,itisnotsointhecaseofvoluntarywindingup.

ProducerCompany

Suitableforpartnershipconcernssetupbyprofessionalsviz.Charted Thesecompaniesareformedbythemanufacturers,producers
Accountants, Company Secretaries etc. though anybody can join an etc.
LLP.
Twoormorepersonscarryingonalawfulbusiness.
Any ten or more individual producer or two or more producer
institutionsortheircombination.
LimitedtotheLimitedLiabilityAgreement.
Limitedtotheamountofunpaidshare,heldbythem.
Appointmentofdirectorsisnot required.Organizationisrunbythe Minimumfiveandmaximumfifteendirectors.
designatedpartners/partners.
CapitalcontributionasgivenintheLLPagreement.
Thesharecapitalofproducercompanyisdividedintoequityshares
only.
Mayconverttootherformsofbusiness.
Noconversionclauseexists.

10

Theword'LLP'wouldformpartofitsname.

The word'ProducerCompanyLimited'wouldformpartofitsname.

Trust

ContactNo.9331963835,9239521128,9433352926.

*CSKUMARCHANDRAMOHAN*CSPUJAMOHAN*
(SpecialisedinCA,CS,CWACoachingFoundation/Executive)
RealStudyCentre,148/14,N.S.C.BoseRoad,NearTollygungeMetroStation,Kolkata40.

KUMARLAWCLASSES

SupplementaryNotesCompanyLawForDecember,2012Exam

Bailment

Atrusteebecomestheownerofthetrustproperty.
Theobligationoftrusteeisequitable.
Atrustcanbecreatedbothinrespectofmovablepropertyaswellas
immovableproperty.
Inatrust,generallypropertydoesn'tcomebacktotheauthor.

Baileedoesnotbecometheownerofthebailedproperty.
Theobligationofbaileeis legal
Abailmentmaybeonlyinrespectofmovableproperty
Inabailment,generallypropertycomes backtothebailer

Agency

Trust

Anagenthasnotitletotheproperty.
Anagentactsonbehalfoftheprincipal.
Anagentisnotpersonallyliable,ifheactsonbehalfoftheprinciple.

Atrusteeisthefullownerofthetrustproperty.
Atrusteeactsinhisownright.
Ontheotherhand,atrusteeispersonallyliable.

KUMAR LLAWCLASSES
(RealStudyCentre,148/14,N.S.C.BoseRoad,NearTollygungeMetroStation,Kolkata700040.)

ContactNo.:9331963835,9239521128,9433352926.

CSFoundation&Executive(AllPapers)
CA/CWAAllLawPapers

Faculties:CSKUMARCHANDRAMOHAN*CSPUJAMOHAN

*Experiencedfaculties*Allsubjectnotesavailable*
*Allsubjectsunderoneroof*Smallbatches*
*Indepthstudywithinscheduledtime*RevisionaryClasses*
*MockTests*

*AdmissionopenforJune,2013batch*
11