Companies Act 1956

COMPANIES ACT 1956
SHREYANSHI
MB
Enrolment No.- 817/17
SECTION WISE CONTENT
• What is Company?
• Characteristics of a Company
• Objectives
• Types of company
• Point wise definition of various types of companies
• Registration of a company
• MOA
• AOA
• Amendment of Companies act 1956
• Comparison between companies act 1956 & 2013
• Reference
• The End
WHAT IS COMPANY ?
❖ Section 3(1)(i) of the act defines a company as: " A company formed & registered
under this act or an existing company."
❖ "Existing Company" means a company formed & registered under any of the
earlier Company Laws.
❖ This Act came into force on 1st April 1956.
❖ This Act separated into13 parts having 658 sections & 15 schedules.
❖ Based on the recommendations of company law committee named as the Bhaba

Committee set up in 1950.
CONTINUE........
❖ A Company is an artificial person created by law.

❖ Voluntary association of persons.
❖ A Company means a group of persons associated together for the
attainment of a common goal like:
▪ To carry on some business for profit.
▪ To promote art, science, education or some charitable purposes.
CHARACTERISTICS OF A COMPANY
Separate Legal Transferability of Perpetual

Limited Liability
Entity Shares Succession
Capacity to Sue & Right to own

Common Seal Separate property
being sued property
OBJECTIVES OF COMPANIES ACT 1956
• To protect the interest of shareholders.

• To safeguard interest of creditors.
• To helps the development of companies in India on healthy lines.
• To help the attainment of ultimate ends of the social & economic
policy of the government.
• To equip the government with necessary powers to intervene directly
into affairs of a company in public interest.
TYPES OF COMPANIES
On the basis of On the basis of On the basis of

Incorporation Liability Number of Members
• Statutory Companies • Limited by Shares • Public Company
• Registered Companies • Limited by Guarantee • Private Company
• Unlimited Companies
On the basis of On the basis of

Control Ownership
• Holding Company • Government Companies
• Subsidiary Company • Non-Government
Companies
BASED ON INCORPORATION
• Statutory Company:- It is defined as a company that is created by a special act of
the parliament or by the central or state legislature & it provides services of
values to the public. It is fully financed by the government.
Example:- RBI, SBI, LIC etc.
• Registered Company:- These are come into existence only when they are
registered under the Companies Act, 1956 & a certificate of incorporation has
been issued by the registrar.
BASED ON LIABILITY
• Limited by Shares :- A Company that has the liability of the members
limited by such an amount that is unpaid on their respectively held shares. It is a
corporate entity, that is legally separate from any directors & shareholders.
Most of the private & public companies are limited by shares & it’s the most
popular form of business in India. Ex:- Reliance, Infosys & TATA are limited by
shares.
• Limited by Guarantee :- Company limited by guarantee is termed as

"guarantee Company". It is a company without any shareholders but it is
owned by members called guarantors who agree to nominal amount in
the event of company's being wound up by company.
CONT......
• Unlimited companies:- A company not having any limit

on the liability of its members is called an 'unlimited
company' [Section12(c)].
Example:- partnership firms are the example of unlimited
companies.
BASED ON NUMBER OF MEMBERS
• Public company :- it’s a company with securities (equity & debt)owned &
trade by the general public through the public capital markets. In this the
ownership is shared between the shareholders, including the board,
management & public shareholders. There is no restriction on the maximum
number of the members on the company.
Example :- Air India, BHEL, BPCL etc.
• Private company :- it is formed by a small no. Of shareholders who come

together for a social cause or profit motive. It restricts the right of transfer of
shares. The limits of number of members is 50.
Example :- Reliance industries limited, TCS, Infosys technologies Ltd., etc.
BASED ON CONTROL
• HOLDING COMPANY :- A Company is known as the holding company of

another company if it has control over the other company. A holding company is
the parent of various companies controlled under it which are known as its
Subsidiaries. The benefits of a holding company is more control with less
capital. Example :- Apple Inc., Facebook etc.
• SUBSIDIARY COMPANY :- A subsidiary is a company that belongs to another

company, which is usually referred to as the parent company or the holding
company. The parent holds a controlling interest in the subsidiary company,
meaning it has or controls more than half of its stock. Example :- SBI has
subsidiaries like SBI Mutual fund, SBI Caps Ltd., LIC Housing Ltd., etc.
BASED ON OWNERSHIP
• GOVERNMENT COMPANIES :- A Company of which not less than 51% of the

paid up capital is held by the Central Government or by State Government
or Government singly or jointly is known as a government company. It
includes a company subsidiary to a government company.
Examples :- BHEL(Bharat heavy electricals ltd.), Hindustan Steel ltd. etc.
• NON-GOVERNMENT COMPANIES :-Companies or organization that is not a

part of government, are called as non-government companies or
organization (NGO). They are non-profit making, voluntary & service oriented
organizations. Examples :- Butterflies India, Child Rights & You, etc.
INCORPORATION/ REGISTRATION OF A
COMPANY
Printing, Signing &
Preparation of
Availability of Articles of Stamping, Vetting
Memorandum of
Name Association of Memorandum &
Association
Articles
Address of the Statutory Payment of

Power of Attorney
Registered Office Declaration Registration Fees
Certificate of
Incorporation
MEMORANDUM OF ASSOCIATION- MOA
• It is document which sets out the constitution of the company & is the foundation
of the company. It contains the fundamental conditions upon which the company is
allowed to be incorporated .
Various Clauses in MOA -
a) Name clause
b) Registered office clause
c) Objects clause
d) Liability clause
e) Capital clause
ARTICLES OF ASSOCIATION- AOA
• AOA refers to the rules & regulations of a company framed for the
purpose of internal management of its affairs. The AOA of a company
are sub-ordinate to & are controlled by the MOA.
Companies which must have their own articles:-
a) Private companies limited by shares
b) Companies limited by guarantee
c) Unlimited companies
AMENDMENT OF COMPANIES ACT 1956
➢ Since then, the Companies Act 1956 has been amended several times. This act
remained in force for a long time, though amended from time to time.
➢ Some major changes occur in Companies Act, 2013 & it received the assent of
the President on 29th August, 2013.
➢ The Companies Act 2013, were brought into force on 12th September 2013.
➢This Act has replaced the Companies Act 1956 (in a partial manner)& this act is
applicable to the whole of India (including J&K).
COMPARISON BETWEEN COMPANIES ACT 1956
& 2013
1956 2013
• The Companies Act,1956 contains 658 • The Companies Act, 2013 contains 464
sections & 15 schedules. sections & 7 schedules.
• One person can't form a One Person • One person can form a One Person
Company. Minimum 7 person required Company.
for a public co. • Max. 200(other than OPC)
• Max. 50 members allowed in private members allowed in private company.
company. • Under this 15 types of companies can be
• Under this act, only 10 types of formed (Addition of 5 new types of
companies can be formed. companies).
REFERENCE
• https://en.m.wikipedia.org/wiki/Companies_Act_1956
• https://www.taxmann.com/post/blog/6181/the-journey-
of-companies-act-from-1956-to-2021/
• http://www.legalservicesindia.com/article/2306/Distincti
on-between-Companies-Act-1956-and-Companies-Act-
2013.html
THANK YOU
The End

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COMPANIES ACT 1956

❖ This Act came into force on 1st April 1956.

❖ Based on the recommendations of company law committee named as the Bhaba

❖ A Company is an artificial person created by law.

Separate Legal Transferability of Perpetual

Capacity to Sue & Right to own

• To protect the interest of shareholders.

On the basis of On the basis of On the basis of

On the basis of On the basis of

• Limited by Guarantee :- Company limited by guarantee is termed as

• Unlimited companies:- A company not having any limit

• Private company :- it is formed by a small no. Of shareholders who come

• HOLDING COMPANY :- A Company is known as the holding company of

• SUBSIDIARY COMPANY :- A subsidiary is a company that belongs to another

• GOVERNMENT COMPANIES :- A Company of which not less than 51% of the

• NON-GOVERNMENT COMPANIES :-Companies or organization that is not a

Address of the Statutory Payment of

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