COMPANY ACT, 1956

INTRODUCTION
The companies act, 1956 came into force on the 1st april,1956 on the recommendations of the company law committee (bhaba committee) which submitted its report in march 1952. Based on English Companies act, 1948 But many amendments introducing drastic changes

Major amendment Acts Acts of

1957,1960,1963,1965,1966,1969,1974, 1977,1985,1988,1996,2000,2002 Many provisions to safe guard investors and public

Evolution Of Company Law In India

Before the enactment of the companies act in 19th century, the present procedure of forming joint stock enterprises as limited companies was not in existence. The promoter of the joint stock companies, in those days, had to apply to the king, through the parliament, for the necessary sanction and had to wait until the royal approval was available.

The Companies Act 1956

 What is a company act? According to the sec 34(2) of the companies act,1956 From the date of incorporation mentioned in the certificate of incorporation, such of the subscribers of the memorandum and other persons, as may time to time be members of the company, shall be a body corporate by the name contained in the memorandum, capable forthwith of exercising all the functions of an incorporated company and having perpetual succession and a common seal, but with such liability on the part of the members to contribute the asset of the company in the event of its being wound up as is mentioned in the act.

Meaning
The word company is derived from Latin. Originally, the word referred to an association of persons or merchantman's discussing matters and taking food together. It is a voluntary association of person formed for the purpose of doing business, having a distinct name and limited liability.

Characteristic features of a company

Incorporated association Must be incorporated or registered Artificial person

Not himself human being clothed with certain rights and Separate legal entity section 34(2)association of persons become a body corporated by the name contained in the memorandum Limited liability Members are not liable for its Debt Perpetual existence Members may Come and go but company go forever Common seal Empowering any person, or in respect of any specified matters, as its attorney

Difference Private
minimum paid up capital >= 1Lac 2<Members<50 >=5Lac Members>7

Public

cannot invite public to subscribe its share capital The right to transfer its shares is restricted by its Articles Private Limited at the end of its name. Legal controls are less

Invites the public to subscribe to share capital Its shares are freely transferable limited

Legal controls, restrictions are more and strict Directors cannot borrow from the public companies

Directors are allowed to borrow from the private companies

ess, restrictions on the remuneration of director

There are restrictions on the remu to be paid to its directors Directors need to retire at 70

Directors need not to be retire 70

Articles of Association
The Articles of association are the documents containing the rules and regulations which govern the internal management of a company at every stage of its business that is from cradle to grave.

 These defines powers and duties of directors and other officers of the company.

Corporate Veil
The law presumes the company to be distinct from its members. Like any other person it has nationality, domicile and residence. Company has the capacity to enter into a contract. Shareholders or members being distinct from the company, property of the company is not the joint property of shareholders. Law does not break through this veil of corporate Personality to see as to who are the beneficiaries or who are the persons behind. The separate legal personality of the company is the bedrock of the company law. When law disregards the corporate entity and pays regards instead to the economic realities behind the legal facade, known as lifting the corporate veil. In case of dishonest and fraudulent use of the facility of incorporation, the law lifts the corporate veil and identifies the persons who are behind the scene and are responsible for the perpetration of fraud.

Articles of Association.

 The relations of the shareholders among themselves their powers and claim, individually and collectively, borrowing power of the company, holding of meetings, keeping of accounts and all such matters as may affect the smooth conduct of the business.

Contents of Articles
Provisions relating to share capital and alteration thereof. Share certificates & warrants. Rights of share holders. Meetings of the Company. Appointment, remuneration, qualifications of Board of Directors. Dividends. Indemnity.

Articles of Association shall

be printed. be divided into paragraphs numbered consecutively. be signed by each subscriber of the memorandum of association.

ALTERATION OF ARTICLES ASSOCIATION

It must be bonfide in the interest of the company and for the benefit of the company as a whole, it should not constitute a fraud on minority.

 It should not operate as a breach of contract with an outsider. It cannot require a member to purchase more shares or increase his liability in any way except with his consent in writing.

Memorandum of Association
Memorandum of Association is the document which contains the rules regarding constitution and activities or objects of the Company. It is a fundamental agreement of the Company. Company is governed by Memorandum of Association.

Contents of memorandum.
The name of the company with "Limited" as the last word of the name in the case of a public limited company, and with "Private Limited" as the last word of the name in the case of a private limited company. The State in which the registered office of the company is to be situated.

objects of the company.

in the case of companies with objects not confined to one State, the States to whose territories the objects extend. The memorandum of a company limited by shares or by guarantee shall also state that the liability of its members is limited.

 The memorandum of a company limited by guarantee shall also state that each member undertakes to contribute to the assets of the company in the event of its being wound up. In the case of a company having a share capital the memorandum shall also state the amount of share capital with which the company is to be registered and the division thereof into shares of a fixed amount.

The memorandum shall (sec 15)

be printed, be divided into paragraphs numbered consecutively, be signed by 7(2 in case of private company) subscriber.

Alteration of memorandum.
A company shall not alter the conditions contained in its memorandum except in the cases, for which express provision is made in this Act. Provisions relating to the appointment of a managing director, managing agent, secretaries and treasurers or manager, may be altered in the same manner as the articles of the company. The alteration, with a printed copy of the memorandum altered, shall be filed by the Company within three months from the date of the order with the Registrar who shall register the same and certify it.

Prospectus
DEFINATION any document inviting deposits from public or inviting offers from public for the subscription of shares or debentures of a company is a prospectus.

Characteristics of Prospectus
prospectus to be in writing invitation to public offer to the public Dating of prospectus (sec 55) registration of prospectus(sec 60) information of memorandum (sec 60-B)

THE IMPORTANT CONTENT OF PROSPECTUS

1. General information-1.name & add of company. 2. name of regional stock exchange. 3. rating of CRISIL. 4. date of opening and closing of the issue.5.declaration about refund of the issue. 2. Capital structure authorized, issued, subscribed and paid-up capital 2) size of present issue 3) paid-up: a)after the present issue, b)after conversion of debentures 3. Term of the present issue : a) terms of payment b) rights of the instruments holder c)how to apply d)any special for company and its shareholders.

4. Particulars of the issue: a)object c)means of financing. b)project cost

5. Company, management and project: a)history, main objects of business b)subsidiary of the company. C)promoters d)collaboration agreement

Particular in regarding to the company:

a) Name of company b) Year of the issue c) Type of issue d) Amount of issue e) Rate of dividend paid

Management perception of risk factor :

a)sensitivity to foreign exchange rate fluctuation b)difficulty in availability of raw material.

APPOINTMENT LETTER To, Miss. Chetana R. Bhalerao, As per the interview conducted on 21st May, 2009 for the post of HR Executive We are pleased to inform you that you are appointed in Ameya Transmissions Manufacturing Company, N.D.A. Road, Shivane, Pune as HR Executive (On Godwill Management Companys Payroll) from 25th May 2009. You are appointed from Godwill Management Company for outsourcing work in Ameya Transmissions. Your salary structure will also remain as per our mutual understanding. Kindly acknowledge. Regards, For Godwill Mnagement Company,

(Dr. Vilas Kulkarni ) Director