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Company Affairs

COMPANY UNDER THE ACT

The types of companies may be formed as “private limited” or “public limited”. These are explained hereunder :

Private Limited Companies

Section 3(1) (iii) of the Act provides that a private company shall have a minimum paid-up capital of Rs.One lakh and its articles shall prohibit invitation or acceptance of deposits from persons other than its members, Directors or their relatives. The amended section defines a private company as one which –

• has a minimum paid-up capital of Rs.1 lakh

• by its Articles of Association:

(i)

restricts the right to transfer its shares, if any

(ii)

limits the number of its members to 50

(iii)

prohibits any invitation to the public to subscribe for any shares or debentures of the company; and

(iv)

prohibits any invitation to or acceptance of deposits from persons other than its members, directors or their relatives.

Public Limited Company

The Companies (Amendment) Act, 2000 has also defined a public company as one which –

(i)

is not a private company;

(ii)

has a minimum paid-up capital of Rs.5 lakhs

(iii)

is a private company but subsidiary of a public company; and

(iv)

shall have at least seven subscribers to its Memorandum of Association, namely minimum seven members.

FORMATION OF A COMPANY

In case of Private Limited Company

(i)

First of all, DIN (Director Identification Number) should be obtained by the proposed directors of the company.

(ii)

Application form for availability of name of a company in Form 1A should be filed. Proposed name of a company should cover the nature of business itself. The name is valid for 60 days.

(iii)

Application form for location of registered office of the company in Form 18.

(iv)

Application for appointment of directors in Form 32 with consent letter of directors.

(v)

Application for incorporation / registration in Form 1 of a company shall be applied with the following required documents :

–

Original copy of Name Availability Letter issued by the Registrar of Companies.

–

Memorandum & Articles of Association duly embossed (Two copies). The memorandum & articles of association are the basic documents in the constitution of a company. MOA is the charter of a company whereas AOA is internal by-laws of a company. While the memorandum contains Name clause, Registration, Registered location of the company, Object clause, Liability clause, Capital clause & Subscribers clause, whereas the Articles contain the regulations concerning the relationship between the members & the company, the powers & functions of the directors and all matters touching the day to day working of the company.

–

Form No. 32 in duplicate

–

Form No. 18

–

Power of Attorney from each director.

With required Registration & Filing fees with details of payment.

After getting “Certificate of Incorporation” in Form 1 issued by Registrar of Companies, Private Company can commence its business.

In case of Public Companies

In addition to the above requirements of a private company, a public company is required to fulfill the following :

(i)

After getting “Incorporation Certificate”, a public company needs to subscribe from public with minimum subscription and to issue prospectus for such subscription.

(ii)

A public limited company can commence business only after obtaining the “Certificate to commence business” from Registrar of Companies.

ANNUAL OBLIGATIONS OF A PRIVATE COMPANY

ANNUAL FILING e-FORMS

Description	e-Forms	Date of filing
Form for filing annual return by a company having a share capital with the Registrar	Form 20B	Within 60 days from the date of AGM
Form for filing balance sheet and other documents with the Registrar	Form 23AC	Within 30 days from the date of AGM
Form for filing Profit & Loss account and other documents with the Registrar	Form 23ACA	Within 30 days from the date of AGM
Form for submission of compliance certificate with the Registrar (when the company is having paid up capital of Rs.10 lakhs or more upto Rs.2 crores)	From 66	Within 30 days from the date of AGM

Other prescribed documents are required to be filed usually within 30 days from date of passing resolution.

ANNUAL GENERAL MEETING
Every company shall hold every year an Annual General Meeting and there shall not be a gap of more than 15 months between two such meetings. It is the rule that a company whose financial year ends on 31st March, shall hold its AGM by 30th September every year.

NOTICE FOR AGM

A notice regarding AGM should be served to members of the company atleast 20 days before from the date of AGM with location, time and Agenda of such meeting. At every AGM the following may be considered:

(i)

The consideration of Final Accounts and Reports of the directors & auditors.

(ii)

The declaration of dividend

(iii)

The appointment of directors in place of those retiring.

(iv)

The appointment of auditors.