Company Law Notes with Important Questions and Answers
B.Com Program Semester 2
Company Law - Detailed Notes with Important Questions and Answers
B.Com Program Semester 2
UNIT 1: INTRODUCTION TO COMPANY LAW
Definition of a Company:
A company is an artificial legal person, incorporated under the Companies Act, 2013, having a
separate legal identity, perpetual succession, and limited liability.
Characteristics of a Company:
1. Separate Legal Entity
2. Limited Liability
3. Perpetual Succession
4. Transferability of Shares
5. Common Seal (now optional)
6. Capacity to Sue and Be Sued
Types of Companies:
- Private Company
- Public Company
- One Person Company (OPC)
- Section 8 Company
- Government Company
- Holding and Subsidiary Company
- Small Company
Q1. Define a company. What are the characteristics of a company?
Ans: A company is an artificial legal person... [continued]
Q2. Explain different types of companies under the Companies Act, 2013.
Ans: Based on incorporation, liability, number of members etc... [continued]
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UNIT 2: INCORPORATION OF COMPANY
Steps in Incorporation:
1. Name Approval via RUN or SPICe+ Part A
2. Obtaining DSC and DIN
3. Drafting MOA & AOA
4. Filing SPICe+ Form
5. Certificate of Incorporation
MOA vs AOA:
MOA defines scope, AOA governs internal rules.
Q1. Explain the process of company incorporation.
Q2. Differentiate between MOA and AOA.
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UNIT 3: PROSPECTUS AND SHARE CAPITAL
Prospectus:
- Invitation to public to subscribe shares/debentures.
- Must include true material facts.
Types:
1. Red Herring Prospectus
2. Shelf Prospectus
3. Deemed Prospectus
Share Capital:
- Authorized, Issued, Subscribed, Called up, Paid up
Q1. What is a prospectus? Explain types of prospectus.
Q2. Define share capital. Differentiate types.
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UNIT 4: MEMBERSHIP IN A COMPANY
Who is a Member?
- Subscriber to MOA
- Shares held via transfer
- Name in Register
Modes of Becoming a Member:
1. By subscribing
2. By transfer
3. By transmission
Rights & Liabilities:
- Voting, dividends, documents
- Limited liability unless guaranteed
Q1. Define a member. Explain different ways of becoming a member.
Q2. State the rights of members.
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UNIT 5: COMPANY MANAGEMENT
Key Managerial Personnel:
- Directors
- MD
- CEO
- CS
- CFO
Board of Directors:
- Min 3 for public, 2 for private
- DIN required
Meetings:
- Board Meetings
- Annual General Meeting
- Extra-Ordinary General Meeting
Q1. Who are KMPs? Define the composition of the Board.
Q2. What are the statutory meetings in a company?
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UNIT 6: COMPANY MEETINGS
Types of Meetings:
1. AGM
2. EGM
3. Board Meetings
4. Class Meetings
Resolutions:
1. Ordinary Resolution
2. Special Resolution
Notice:
- Min 21 days
- In writing
Q1. Explain types of meetings in a company.
Q2. Differentiate between ordinary and special resolutions.
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UNIT 7: WINDING UP OF COMPANY
Winding Up:
- Process to close company legally.
Types:
1. Compulsory by Tribunal
2. Voluntary by Members or Creditors
Liquidator:
- Appointed to sell assets, pay debts
Effects:
- Company ceases business
- Legal existence ends after dissolution
Q1. What is winding up? Differentiate types.
Q2. Explain the role of liquidator.
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