Escolar Documentos
Profissional Documentos
Cultura Documentos
1 2 3
NAME
ARITRA BANERJEE AVINASH KUMAR B.JAGADEESH REDDY
ROLL.NO.
B070543CE B070462CE B070549CE
4
5 6
MAYANK PANWAR
PERALA SANGEETH KUMAR RAGHUL RAVINDRAN
B070311CE
B070587CE B070423CE
B070449CE
Definition A Joint Stock Company is a voluntary association of individuals for profit, having its capital divided into transferable shares, the ownership of which is the condition of membership. A company is an incorporated association of persons formed usually for the pursuit of some commercial purpose. Section 3(1) of Indian Companies Act, 1956-Company means a company formed and registered under this Act or an existing company Existing company means a company formed and registered under any of the previous company laws
A JSC is a type of corporation or partnership involving two or more individuals that own shares of stock in the company. Certificates of ownership ("shares") are issued by the company in return for each financial contribution.
The shareholders are free to transfer their ownership interest at any time by selling their shareholding to others.
A voluntary association of persons who generally contribute capital to carry on a particular type of business. Persons who contribute capital become members of the company. Company has a legal existence separate from its members, which means even if its members die, the company remains in existence. This type of company needs huge capital investment. The total capital of a JSC is called share capital and it is divided into a number of units called shares. Members are also called shareholders.
In 1250, in Toulouse, France, Bazacle Milling Company traded 96 shares whose value depended on the profit of the company. In 1288, a Swedish company, Stora documented transfer of shares. In modern history, the earliest recognized company was the British East India Company, was one of the most famous jointstock companies. In 1602, the Dutch East India Company issued shares on the Amsterdam Stock Exchange. The first JSC to be implemented in the America were The Virginia Company and The Plymouth Company.
Its
a separate legal entity, distinct from the people engaged in it. It involves three sets of economic actors: 1. shareholders - provide financial capital in return for a share in the profits, 2. directors Their role is to:
protect the interest of the share holders, to ensure the company is working within the law it does not trade in cases of bankruptcy.
3. employees - who work but, are legally not a part of the company
Incorporation a voluntary association of persons formed and incorporated under the existing law. Artificial person created by legal process and not by natural birth. Even though it has no natural personality, it has legal personality Common Seal every company by law must have a common seal on which its name is engraved. The common seal can serve as its signature.
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Perpetual succession men may come and men may go but a company remains forever. It can be wound up only under the provisions of the act. Limited liability usually the liability of members of a company is limited to the extent of uncalled or unpaid value of shares held by them. Share capital The capital required by the company is raised by issuing shares. The member who holds the shares of a company can transfer its ownership any other person, without the companys permission.
Promotion is the discovery of ideas and organization of funds, property and skill to run the business for the purpose of earning income. Steps involved 1) Idea about Business 2) Investigation- make out plans as regards to the availability of resources like capital, means of transportation, labour, electricity, gas ,water, etc. 3) Assembling various Factors- like arrangement of licences, copyrights, employment of necessary employees, etc.
4) Financial Sources 5) Preparation of Essential Documents like Memorandum, Articles and Prospectus of company. The promoters carryout these various activities to give the company its physical shape in the form of Giving a name to the company Sanctioning of Capital Issue
The second stage for establishment 1)Filing of Document: Following documents are to be submitted by the promoters in the Registrars office a) Memorandum of Association indicates name, address, authorized capital etc. b) Articles of Association contains laws and rules for internal control and management of a company. c) List of Directors list of the names, occupations, addresses, along with the declaration of director.
d) Written Consent of Directors e) Declaration of Qualifying SharesA declaration certificate showing that the directors have take n up qualifying shares and have paid up the money or pay it in near future to the registrar. f) Prospectus g) Statutory Declaration stating that all legal formalities have been completed.
2) Payment of Registration Fee the registration fee is paid to the Registrar for Application and documents filing fee Registration fee Stamp fee on Memorandum and Articles 3) Certificate of Incorporation If the registrar finds all the documents right, he issues the certificate of incorporation to promoters.
After getting certificate of incorporation, the next stage is to make arrangement for raising capital by issuing i) Shares ii) Debentures iii) Savings CERTIFICATE OF COMMENCEMENT requires the fulfilment of following conditions a) Issue of Prospectus: A company has to issue prospectus for selling shares and debentures to public.
b) Allotment of Shares c) Minimum Subscription certified that the shares have been allotted up to an amount, not less than the minimum subscription.
The Fourth and Final Stage After verifying the foregoing documents, the registrar issues the certificate of commencement of business
1) On the basis of Incorporation a) Chartered Companies i) Such companies are incorporated under a Royal Character (order) issued by the King or Queen or Head of the State. ii) Such companies have exclusive rights, powers and privileges under the royal charter. Example: East India Company, Bank of England 2) Statutory Companies i) Such companies are formed under the special act passed by the Parliament or State Legislature. ii) The powers which can be exercised by such companies are defined by the Acts that constitute them.
Example: Reserve Bank of India, State Bank of India, Life Insurance Corporation 3) Registered Companies i) A company incorporated under the Indian Companies Act, 1956 is called Registered Company. ii) The powers exercised by such companies are defined by the Companies Act and Memorandum of Association. iii) A registered company can be a Private Ltd. Company or a Public Ltd. Company
On the basis of liability of its members 1)Companies Limited by Shares i) the liability of the members is limited to the extent of the unpaid value on shares. ii) Such companies may be a Public limited company or a Private limited company 2) Companies Limited by Guarantee i) Member guarantees to pay a fixed sum of money (specified in the memorandum) at the time of liquidation of the company for payment of companies liabilities. ii) Such companies are formed without a share capital for non trading (non profit) purpose. iii) Depend on entrance and subscription fees as they do not have share capital.
3) Unlimited Companies i) The liability of the members is unlimited. ii) In the event of winding up of the company. the private property of the member can be used to pay the debts of the firm. iii)Due to the high risk involved, such companies are not found in India. On the basis of Membership 1) Private Limited Company A private limited company is the one which by its articles i) Limits the maximum number of its members to 50, minimum being 2.
ii) Places some restriction on the transfer of its shares iii) Prohibits any invitation by prospectus or otherwise to the general public to subscribe to any of its shares or debentures iv) A private company must used the word Private Limited after its name. 2) Public Limited Company i) It must have atleast 3 directors 1/3rd of the directors are permanent and 2/3rd are subject to retirement by rotation out of which 1/3rd retire every year. ii) Shares can be freely transferred in a public company. iii) In case of a public company Statutory Meeting is compulsory.
ii) Follows provisions of the Indian Companies Act, 1956. Examples: Hindustan Machine Tools, Oil and Natural Gas Commission etc.
2) Foreign Companies:
i) company which is registered in one country but carries out its operations in India.
Private Limited Company Public Limited Company 1. Membership: Minimum membership 2, Maximum Minimum membership 7, Maximum membership 50 membership unlimited
2. Formation Comparatively simple, certificate of Comparatively difficult as the procedure incorporation is adequate is lengthy. 3. Number of Directors: It must have at least two directors 4. Transfer of Shares: The shares are not freely transferable
6. Commencement of Business: It can start the business after the It requires trading certificate for starting receipt of certificate of incorporation. business 7. Suitability: Suitable for business on a small scale
8. Invitation: It cannot invite public to subscribe for It invites public to purchase securities of securities of the company the company.
9. Allotment: It can allot shares immediately after Shares cannot be allotted unless incorporation minimum subscription is collected. 10. Qualification shares: The directors need not qualification shares hold The directors have to purchase some qualification shares to become the director. A director cannot be a director of more than 20 companies
11. Directorship: There is no restriction on the number of directorship 12. Quorum: Two members present in the meeting is a quorum at general meeting
A) There are three type of companies -Private Limited, Public Limited and Government companies on the basis of ownership B) Two types of companies - Indian and Foreign on the basis of nationality.
1) Private Limited Company i) can be formed by at least two individuals having minimum paidup capital of not less than Rupees one lakh.
ii) total membership of these companies cannot exceed 50.
iii) shares allotted to its members are also not freely transferable between them. iv) not allowed to raise money from the public through open invitation. v) are required to use Private Limited after their names. examples : Combined Marketing Services Private Limited, Indian Publishers and Distributors Private Limited Limited, etc.
iv) can raise funds from general public through open invitations by selling its shares or accepting fixed deposits. v) required to write either public limited or limited after their names. Examples :Hyundai Motors India Limited, Steel Authority of India Limited, Jhandu Pharmaceuticals Limited etc.
3) Government Company i) the Govt (either state or central Gvt or both) holds a majority share capital i.e., not less than 51%. ii) companies having less than 51% share holding by the govt can also be called Govt companies provided control and management lies with the Govt.
examples : Mahanagar Telephone Nigam Limited, Bharat Heavy Electricals Limited, etc.
4) Indian Company i) A company having business operations in India and registered under the Indian Companies Act, 1956 ii) company may be formed as a public limited, private limited or government company.
Indian Companies Act 1956 defines share as a share in the share capital of a company and includes stock except when a distinction between stock and shares is expressed and implied. Owned capital of a company divided into a large number of equal parts or units. Each such part having the same face value is called share.
1.Equity Shares(Ordinary shares): Equity shares are those shares which do not have, preferential rights with regards to (1) Payment of dividend (2) Repayment (return) of capital, in case of winding up of the company. 2.Preference Shares: Preference shares are those shares which have preferential rights over the equity shares with regards to: (1)Repayment of capital in the event of liquidation / winding up of the company. (2)Payment of dividend.
(IV) On the basis of Conversion: (a) Convertible Preference Shares (b) Non Convertible Preference Shares
3.Bonus Shares: A part of the companys profit is transferred to reserves. Out of such reserves a company issues bonus shares. Such shares are issued to the equity share holders of the company free of charge. Infact bonus shares are also equity shares.
4.Deferred Shares / Founder Shares / Management Shares: These shares are issued to the promoters of the company. They rank last of all shares in respect of payment of dividend and repayment of capital. Deferred shares are usually of a lower face value. Only private companies can issue deferred shares.
5.Qualification Shares: The articles of a company usually require a director to hold certain number of shares to be eligible as a director. Such shares are called qualification shares. The directors must obtain qualification shares within 6 months from his appointment as a director. If he does not purchase the qualification shares within the prescribed period he ceases to be the director of the company. He can purchase the shares from the company itself or from the stock market.
(a)Statutory Meeting The statutory meeting is held to inform the shareholders in respect of matters relating to: Allotment of shares Receipts and payments made by the company, etc. Incorporation of the company. Details of preliminary expenses. Details of the contracts concluded by the company or changes in the existing contract. Details of further prospects of the company Any special matters which require approval of the shareholders is placed before them at this meeting.
A stock exchange is an entity that provides "trading" facilities for stock brokers and traders to trade stocks, bonds, and other securities. Stock exchanges also provide facilities for issue and redemption of securities and other financial instruments, and capital events including the payment of income and dividends. Securities traded on a stock exchange include shares issued by companies, unit trusts, derivatives, pooled investment products and bonds.
Rank
Economy
Stock Exchange
United States and Europe United States and Europe Japan United Kingdom China
NYSE Euronext
15970
19813
2 3 4 5
6 7
2711 2170
1496 1368
India
Bombay Stock Exchange National Stock Exchange of India BM&F Bovespa Australian Securities Exchange
1631
258
9 10
India Brazil
1596 1545
801 868
11 12 13
14 15
Deutsche Bores
Shenzhen Stock Exchange SIX Swiss Exchange
Partnership Joint Stock Company 1. Meaning: Here 2 or more people come together for It is voluntary association, artificial person doing some business and making profit created by law having a common seal and perpetual succession 2. Formation: Relatively easy, less legal formalities Formation difficult, too many legal involved formalities involved. 3. Capital: It can raise limited capital due to limitation It can raise large capital due to large on the number of members and their members capacity 4. Liability: Liability of partners is unlimited joint and Members liability limited to the face value several of shares 5. Ownership and Management: There is no difference in ownership and There is no difference in ownership and management management
6. Flexibility: More flexible, compared to Joint Stock Companies 7. Continuity and Stability: Lacks continuity and stability, business may come to an end with death, insolvency and insanity of partners
Joint stock company is continuous and stable, business does not come to an end with death insolvency or insanity of partners
No business secrecy
12.Economies of scale: Less economies of scale as compared to Joint Stock Enjoys economies of scale as it undertakes Companies business on a large scale
(vi)
(vii) (viii) (ix) (x)
(xi)
Large financial resources Limited Liability Professional management Large-scale production Contribution to society Research and Development Bargaining Power Government Revenue Economic Development Public Confidence Long Life
(vi)
(vii)
(viii)
(ix)
(x)
(xi) (xii)
Difficult to form Excessive government control Delay in policy decisions Concentration of economic power and wealth in few hands Labour Disputes Lack of Responsibility Lack of Secrecy Double Taxes Lack of contact with customers Lack of contact with employees Conflicts of Interest Not suitable for all types of business
where the volume of business is large huge financial resources are needed suitable for businesses which involve heavy risks which require public support and confidence Examples: production of pharmaceuticals, machine manufacturing, information technology, iron and steel, aluminum, fertilisers, cement