Introduction to Company
A company is a voluntary association of persons formed for the purpose of doing business, having a distinct name and limited liability. It is a judicial person having a separate legal entity distinct from the members who constitute it, capable of rights and duties of its own and endowed with the potential of perpetual succession. It is an association or collection of individual real persons and/or other companies, who provide some form of capital This group has a common purpose or focus and an aim of gaining profits. The group or association of persons can be made to exist in law and then a Company itself is considered as "legal person". The name company arose because, at least originally, it represented or was owned by more than one real or legal person.
A joint-stock company is a type of corporation or partnership involving two or more individuals that own shares of stock in the company certificates of ownership are issued by the company in return for each financial contribution, and the shareholders are free to transfer their ownership interest at any time by selling their share holdings to others.
In modem corporate law, the existence of a joint-stock company is often synonymous with company.
Incorporation and limited liability As a consequence joint-stock companies are commonly known as corporations or limited companies The company is managed on behalf of the shareholders by the Board of Directors, elected at an Annual General Meeting The shareholders can also accept or reject an Annual Report and audited set of accounts Individual shareholders can sometimes stand for directorships within the company, should a vacancy occur, but this is uncommon. The shareholders are usually liable for any of the company debts that exceed the company's ability to pay However, the limit of their liability only extends to the face value of their share holding.
Overview of Companies Act 2013
The Expert Committee had recommended that private and small companies need to be given flexibility and freedom of operations and compliance at a low cost companies with higher public interest should be subject to a stricter regime of Corporate Governance Government companies and public financial institutions should be subject to similar parameters with respect to disclosures and Corporate Governance as other companies are subjected to.
The Report of the Committee had sought to bring in multifarious visionary concepts which is accepted and acted upon would really simplify the voluminous and cumbersome Companies Act in the country The Companies Act, 2013 received the assent of the President on August 29, 2013, and was notified in the Gazette of India on 30.08.2013.
The Companies Act, 2013 introduced new concepts supporting enhanced disclosure, accountability, better board governance. Better facilitation of business and so on It includes associate company, one person company, small company, dormant company, independent director, women director, resident director, special court, secretarial standards, secretarial audit, class registered valuers, rotation of vigil mechanism, corporate social responsibility E-voting etc.
a)The Companies Act 2013 has undergone amendments (four times so far a) The Companies (Amendment) Act, 2015.
b) The Insolvency and Bankruptcy Code, 2016.
e) The Companies (Amendment) Act, 2017.
d) The Companies (Amendment) Act, 2019.
e) The Companies (Amendment) Act, 2020 amended the Companies Act, 2013.
The Ministry has come out with several circulars, notifications, Orders and various amendment roles to facilitate better and smooth implementation of the Act. This whole ecosystem I called the Companies Law and should be read collectively and comprehensive as described below:
a) Companies Act, 2013 is not a standalone piece of legislation but a complete ecosystem as it contains Orders, Rules, Notifications and Circulars. One should read each section of the Act, with relevant Rule, Notification and Circular
b) Act is a superior authority in law passed by the Legislature, as Notifications and Rules are notified by the Executive under the powers derived from the Act itself.
c) Wherever a section of the Companies Act, 2013 use words as may be prescribed, it is an indication the Legislature has delegated powers to the Executive on that particular point as section 469 empowers the Central Government to make rules for sections which do not delegate such powers to the Central Government.
d) Rules cannot change policy framework in any manners and cannot override substantial provision of the section empowering the Rules
e) Exemption Notifications and Schedules deals with the policy framework of the law, rules deals with the procedures.
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