BUSINESS

ENVIRONMENT WITH
REFERENCE TO
GLOBAL6.53
INTEGRATION
 OBJECTIVES
• WHAT IS BUSINESS ENVIRONMENT?
• WHAT IS INTEGRATION?
• WHAT IS GLOBAL INTEGRATION?
• HISTORY OF GLOBAL INTEGRATION?
• WHAT ARE THE ELEMENTS OF GLOBAL
INTEGRATION?

2
WHAT IS BUSINESS ENVIRONMENT?
• BUSINESS ENVIRONMENT REFERS TO
ANY KIND OF INTERNAL AND
EXTERNAL FORCES WHICH HAVE AN
EFFECT ON THE FUNCTIONING OF THE
BUSINESS IN A POSITIVE OR NEGATIVE
WAY.

3
WHAT IS INTEGRATION?
• INTEGRATION IS A STATE OF AFFAIRS
OR A PROCESS INVOLVING ATTEMPTS
TO COMBINE SEPARATE ECONOMIES
INTO LARGER ECONOMIC REGIONS.
• INTEGRATION MEANS COMBINING AND
JOINING OF DIFFERENT ENTITIES.

4
 WHAT IS GLOBAL INTEGRATION ?
• GLOBAL INTEGRATION
MEANS THE PROCESS
WITH WHICH THE
LOCAL INDIAN MARKET
OPEN UP TO GLOBAL
ECONOMY.
• IT IS THE DEGREE TO
WHICH THE COMPANY
IS ABLE TO USE THE
SAME PRODUCTS AND
METHODS IN OTHER
COUNTRIES.
• IT IS THE SITUATION IN
WHICH SEPARATE
MARKETS FOR THE
SAME PRODUCTS
BECOME 1 SINGLE
MARKET.
• EXAMPLE: TWITTER,
YOUTUBE, AMAZON,
FACEBOOK 5
HISTORY OF GLOBAL
INTEGRATION
• THE ECONOMY OF INDIA HAS
DEVELOPED DRASTICALLY SINCE
INDEPENDENCE FROM THE BRITISH
RULE.
• IN 1947, GOVERNMENT PRIORITIES WERE
TO FOCUS ON SOCIAL UPLIFTMENT OF
PEOPLE ERADICATING POVERTY.
• THEN, THE GOVERNMENT STARTED
ESTABLISHING ITS OWN INDUSTRIES.
• GOVERNMENT ENDED UP WITH A
BALANCE OF PAYMENT CRISIS IN 1991.
• AS A RESULT, INDIA ADOPTED RADICAL
MEASURES TO INTEGRATE ITS ECONOMY
WITH OTHER NATIONS.
6
ELEMENTS OF GLOBAL INTEGRATION

LIBERALIZATION PRIVATIZATION GLOBALIZATION

7
 ELEMENTS OF GLOBAL INTEGRATION
(INDIA’S BUSINESS ENVIRONMENT BEGAN IN 1991)

LIBERALIZATION PRIVATIZATION GLOBALIZATION

LIBERALIZATION REFERS IT IS THE TRANSFER OF IT IS THE SYSTEM OF
TO THE REMOVAL OF THE OWNERSHIO, PROPERTY OR INTERACTION AMONG THE
RESTRICTIONS AND BUSINESS FROM THE COUNTRIES IN ORDER TO
BARRIERS SET BY THE GOVERNMENT TO THE DEVELOP THE GLOBAL
GOVERNMENT. PRIVATE SECTOR IS TERMED ECONOMY
PRIVATIZATION.

7/1/20XX 8
What is LPG Model?
L- LIBERALISATION
P- PRIVATISATION
G- GLOBALISATION

The primary objective of this model was to make the

economy of India the fastest developing economy in the
globe with capabilities that help it match up with the
biggest economies of the world.
 LIBERALIZATION
• THE REMOVAL OR LOOSENING OF RESTRICTIONS ON SOMETHING,
TYPICALLY AN ECONOMIC OR POLITICAL SYSTEM BY GOVERNMENT.

•  LIBERALIZATION MEANS WITHDRAWAL OF CONTROLS AND

REGULATIONS BY THE GOVERNMENT ON ESTABLISHMENT AND
RUNNING OF INDUSTRIES IN THE COUNTRY.
 PRIVATISATION AND GLOBALISATION

•
PRIVATISATION REFERS TO THE PARTICIPATION OF PRIVATE ENTITIES IN
BUSINESSES AND SERVICES AND TRANSFER OF OWNERSHIP FROM THE PUBLIC
SECTOR (OR GOVERNMENT) TO THE PRIVATE SECTOR AS WELL.

• GLOBALISATION STANDS FOR THE CONSOLIDATION OF THE VARIOUS

ECONOMIES OF THE WORLD.
 REASONS FOR IMPLEMENTING
LPG MODEL
• LARGE AND GROWING FISCAL
IMBALANCES
• GROWING INEFFICIENCY IN THE USE OF
RESOURCE
• LOW FOREIGN EXCHANGE RESERVES
• HIGH INFLATION RATE
 WEAKNESSES OF THE LPG MODEL OF
DEVELOPMENT

• THE MODEL BYPASSES AGRICULTURE AND AGRO BASED INDUSTRIES WHICH ARE A
MAJOR SOURCE OF GENERATION OF EMPLOYMENT FOR THE MASSES. IT DID NOT
DELINEATE A CONCRETE POLICY TO DEVELOP INFRASTRUCTURE, FINANCIAL AND
TECHNOLOGICAL SUPPORT, PARTICULARLY THE INFRASTRUCTURAL NEEDS OF AGRO-
EXPORTS
•  THIS HAS A VERY NARROW FOCUS SINCE IT LARGELY CONCENTRATES ON THE
CORPORATE SECTOR WHICH ACCOUNTS FOR ONLY 10 PER CENT OF GDP.
• BY FACILITATING IMPORTS, THE GOVERNMENT HAS OPENED THE IMPORT WINDOW TOO
WIDE AND CONSEQUENTLY, THE BENEFITS OF RISING EXPORTS ARE MORE THAN OFFSET
BY MUCH GREATER RISE IN IMPORTS LEADING TO A LARGER TRADE GAP.
• BY PERMITTING FREE ENTRY OF THE MULTINATIONAL CORPORATIONS IN THE
CONSUMER GOODS SECTOR, THE MODEL HAS HIT THE INTERESTS OF THE SMALL AND
MEDIUM SECTOR ENGAGED IN THE PRODUCTION OF CONSUMER GOODS. THERE IS
DANGER OF LABOUR DISPLACEMENT IN THE SMALL SECTOR IF UNBRIDLED ENTRY OF
MNCS IS CONTINUED.
 WHAT IS COMPANY ?

• A Company can be defined as an “ artificial person”, invisible,

intangible, created under laws, with a discrete legal entity ,
perpetual succession and common seal.
Presentation on types of companies

CO PRESENTED BY - KALPANA
VERMA
ABHAY KUMAR
PATEL
 What is a
Company ?

Company is a legal entity

formed by a group of
individuals to engage in and
operate a business enterprise.

Company is basically a
business organization selling
goods or services.
 COMPANIES BASED ON SIZE
PUBLIC COMPANY PRIVATE COMPANY

A public company is a corporation A company whose shares may not be

whose ownership is distributed amongst offered to the public for sale and which
general public shareholders through operates under legal requirements less
publicly-traded stock shares. strict than those for a public company.
[private ownership]

•Indian Oil Corporation Ltd. (BSE: Flipkart,

530965, NSE: IOC)
Ola,
•State Bank of India (BSE: 500112, NSE:
SBIN) Snapdeal
 TWO TYPES OF PRIVATE COMPANY
SMALL COMPANY ONE PERSON COMPANY
the paid-up capital limit from INR 50 Lacs to INR 2 The concept of the one person company
Crores in the Union Budget 2021 while the turnover
threshold by enhancing from INR 2 crores to 20 crores. (OPC) allows a single person to run a
company limited by shares. A sole
proprietorship is an entity that is run and
1.Health Care and Virtual Medicine. ...
owned by one individual where there is
2.Accommodation and Food Services. ...
no distinction between the owner and
3.Arts, Entertainment, and Crafts. ... the business.
4.Personal Trainers (online) ...

 eBay and Amazon

 COMPANIES BASED ON STOCK
LISTED UNLISTED

A listed company is a public company. It has The unlisted company refers to those
issued shares of its stock through an exchange, companies that aren’t listed on any stock
with each share representing a sliver of exchange, so they are privately owned. Since
ownership of the company. Those shares can they are unlisted, they do not have the privilege
then be bought and sold by investors, rising or to procure funds. They
falling in value according to demand. A
company must apply to an exchange to be Unlisted entities have more control over
listed. business affairs.

• They include local subsidiaries of Bunge,

State Bank of India (BSE: 500112, NSE: SBIN) Vodafone, Samsung, IBM, Hyundai, Honda,
Cognizant, Mondelez and Hewlett Packard,
•Hindustan Petroleum Corporation Ltd. (BSE: among others. Government companies include
500104, NSE: HINDPETRO) state power utilities and defence firms.
OTHER TYPES OF COMPANIES

FOREIGN

DORMANT GOVERNMENT

NIDHI
FOREIGN COMPANIES

A 'foreign company' is defined as an entity which is incorporated outside India, but has
a place of business in India or conducts any business in india.
Example-Nestle , Gillete, HUL.

GOVERNMENT COMPANIES

 Government company means any company in which not less than fifty-one per cent of
the [paid-up share capital] is held by the Central Government, or by any State
Government or Governments, or partly by the Central Government and partly by one or
more State Governments. HAL, SAIL, BHEL. (Paid-up capital is the amount of money
a company has received from shareholders in exchange for shares of stock)
NIDHI COMPANY

A Nidhi Company is a kind of Non-Banking Financial Company (NBFC). Nidhi

Companies are formed to borrow and lend money to its members.
They are also known as Permanent Fund, Benefit Funds, Mutual Benefit Funds and
Mutual Benefit Company.  VIRAMKHAND GOMATI NAGAR LUCKNOW UTTAR
PRADESH SHABAB ISLAMIC INVESTMENT AND MUTUAL BENEFITS (INDIA) LTD. 

DORMANT COMPANY

the word “Dormant” means inactive or inoperative. A dormant company is an excellent

opportunity to start a company for a future project or hold an asset/intellectual property
without having significant accounting transactions.
Good leaf traders private limited, Ncore technology private limited.
JOINT STOCK COMPANY

A joint-stock company is a business entity in which shares of the company's stock can be
bought and sold by shareholders.
•Indian Oil Corporation Ltd.
•Tata Motors Ltd.
•Reliance Industries Ltd

JOINT VENTURE COMPANY

A joint venture (JV) is a business arrangement in which two or more parties agree to

pool their resources for the purpose of accomplishing a specific task.
Caradigm venture between Microsoft Corporation and General Electric (GE) for GE health-
related technologies.
 BUSINESS ENVIRONMENT &
LEGAL ASPECTS OF BUSINESS

UNIT 4
COMPANIES ACT
 MEANING OF DIRECTOR

 Section 2(34) of the Companies Act, 2013 defines a ‘Director’ to mean a Director
appointed to the Board of a company.
 A Director is an individual who directs, manages, oversees or controls the affairs of
the company.
 A Director is a person who is appointed to perform the duties and functions of a
company in accordance with the provisions of the Companies Act,2013.
APPOINTMENT & POWERS OF
DIRECTORS
 APPOINTMENT OF DIRECTORS

IN CASE OF PUBLIC COMPANY

• 2/3 of the total Directors appointed by the shareholders.
• Remaining 1/3 appointed as per Articles and failing which, shareholders shall
appoint the remaining.

IN CASE OF PRIVATE COMPANY

• Articles prescribe the manner of appointment of any Director.
• In case, Articles are silent, Directors must be appointed by the shareholders.
REQUIREMENTS OF DIRECTORS IN A
COMPANY
 POWERS OF
DIRECTORS

GENERAL SPECIFIC
POWERS POWERS
 GENERAL POWERS

• INSPECT THE BOOKS OF ACCOUNTS OF THE COMPANY

• ISSUES NOTICES OF THE COMPANY’S MEETINGS
• RECEIVE HIS REMUNERATION
• ATTEND THE MEETINGS OF THE BOARD OF A COMPANY
 SPECIFIC POWERS

• ISSUE SECURITIES
• INVEST THE FUNDS OF THE COMPANY
• MAKE LOANS ON BEHALF OF THE COMPANY
• CAN FILL CASUAL VACANCIES OF THE BOARD
DUTIES AND LIABILITIES OF DIRECTORS
DUTIES OF DIRECTORS
LIABILITIES OF DIRECTORS
Continue…

 Breach of fiduciary duty

 Ultra vires act
 Negligence
 Mala fide acts

CONCLUSION:
Becoming a company director has become a very serious business and should not
be undertaken lightly or unadvisedly. If you are invited to become a company director
or already a director , it is very important that you understand your duties and
responsibilities and the potential consequences of their breach.
 Definition of meeting

A meeting is a gathering of two or

more people that has been convened
for the purpose of achieving a
common goal through verbal
interaction, such as sharing
information or reaching agreement.
Meetings may occur face to face or
virtually, as mediated by
communications technology, such as
a telephone conference call or a
videoconference.
 Meetings

The Companies Act provides for the following types of

meetings:
A. Meetings of the shareholders: Statutory Meeting
Annual General Meeting Extra-ordinary General
Meeting Class Meetings under certain circumstances
the Court can order certain meetings.
B. Other Meetings: Meetings of the creditors Meetings
of the debenture holders.
C. Meetings of directors.
 Procedure at meeting

 List of members

 Discussion of matters relating

formational aspect
 Adjournment
 Rules of procedure regarding meetings

The general rules of procedure as regards shareholders' meeting can be summarized as

follows:
1. Proper authority: The Board of directors is the proper authority to pass a resolution at a
duly convened Board meeting to arrange a meeting.
2. Notice: Notice of every meeting must be given to all members entitled to vote upon the
matters which are proposed to be dealt with in the meeting, the legal representatives of
deceased or insolvent members coming under the above category, and the auditors of
the Company. Notice must be given at least 21 days before the Meeting.
3. Meetings may be called with a shorter notice under the following circumstances:
 In the case of an annual general meeting, if it is agreed to by all the members entitled to
vote thereat.
 In the case of any other meeting of a company with a share capital, if it is agreed to by
members holding not less than 95% of such part of the paid up share capital of the
company as given a right to vote at the meeting.
 Resolution

Resolution mean decisions taken

at a meeting. A motion, with or
without amendment is put to
vote at a meeting. Once the
motion is passed, it becomes a
resolution. A valid resolution can
be passed at a property convened
meeting with the required
quorum.
Resolutions are to be voted upon, in the first instance, by
show of hands. The Chairman's declaration of the results
of voting by show of hands is conclusive. A poll is to be
taken, if the Chairman so directs in all cases, if it is
demanded by members holding at least 1/10th of the
voting power or paid up capital , in the case of public
companies if it is demanded by 'at least 5 members
present and entitled to vote, and in the case of private
companies if it is demanded by-any one member if not
more than seven members are present and by two
members if more than seven members are present.
 The Act classifies resolutions into the following types :
.

RESOLUTIONS

RESOLUTION
ORDINARY SPECIAL REQUIRING
RESOLUTION RESOLUTION A SPECIAL
NOTICE
 ORDINARY RESOLUTION {SEC- 189(1)}

An ordinary resolution is passed at

general resolution with majority
votes.
As provided in sub-section (1) of
section-114.
SPECIAL RESOLUTION {SEC- 189(2)}

It is only on special matters and requires majority of

3/4th to pass it.

The notice has to be duly given in the general

meeting.
A copy of every special resolution has to be filled with

registrar along with the explanatory statement within

30 days of passing resolution.
 RESOLUTION REQUIRING A SPECIAL NOTICE {SEC-
190}

It is a different kind of ordinary resolution of which a

notice of intention to move a resolution has to be

given to the company by the proposer.
Notice has to be given within 14 days of proposed

date of meeting.
Company should give notice to the members by

advertising in newspapers/feeds.
 WHAT IS MEETING?
z

A meeting is when two or more people come together to discuss

one or more topics, often in a formal or business setting, but
meetings also occur in a variety of other environments. Meetings
can be used  as form of group decision making.
TYPES OF MEETINGS
 z Meeting of the Shareholders
 Statutory Meetings:

Statutory meeting is the first meeting of the members of a

public company. It is held once in the life of a public company
that limited by shares. Statutory means legal, so this meeting
is totally based on law. Must be certified by at least Two
directors.

 Annual General Meetings:

Every public company will hold Annual General Meeting of

its members every year. This meeting is to be call and held by
the directors of the company. Mandatory for every type of
company or for that matter.
 Extra-ordinary General Meetings:

All general meetings other than annual general

meeting and statutory meeting are known as Extra-
Ordinary General Meetings. This meeting is held
on the special occasions or it can say in the
emergency situations when directors think that is
necessary. For example; at the plan of merger.

 Class Meetings:

A class meeting is a meeting of shareholders, where

the only shareholders in attendance that can vote
are those that hold a particular class of shares. The
Company has different kinds of shares.
 z
BOARD MEETING
 A Board of Directors generally must conduct a
Board Meeting to make company’s decisions,
frame the general policy of the company, directs
its affairs, appoints the company officers.

 Usually – director may at any time summon a

meeting of the directors.

 Board of Directors will hold the responsibility

for the overall success and failure of the
corporation.
 Meeting of Debenture Holders
z

The special meeting of the holders of

Debentures that is to be convened as
provided by the Interim Order to consider
and, if deemed advisable, approve the
Arrangement (unless each and every holder
of Debentures consents in writing to a
resolution approving the Arrangement, to
the extent and in the manner permitted
pursuant to the Interim Order).
 MEETING OF THE CREDITORS
z

 The directors or their appointed lower can invite

this type of meeting. Moreover this type of meeting
may be arranged by the order of the court.

 The creditors who will be present in the meeting or

the presence of three- fourth credit holders of the
total credit can take the decision and the court will
give the instruction on the basis of this decision and
the creditors are bounded to abide by the decision.
 AUDITOR

Meaning

• An auditor is the person authorized to review

and verify the accuracy of the financial records
& ensure that companies comply with tax laws

• They protect business from fraud,point out

discrepancies in accounting methods and
occasions,work on consultancy basis,helps
organization to spot ways to boost operational
efficiency
 Types of Auditor

01 External Auditor 02 Internal Auditor

 Types of Auditor

External Auditors
They are independent Auditors appointed
under either private or statuary audit
arrangements with no connection with
company.

Internal Auditors
They are the auditors who are employed by
an Enterprise and use the same technique
employed by the external auditors.
 Appointment

Non-Government Company
Government Company
• Appointed by the board of • Appointment by the controller and
directors.This has to be done within auditor general of India This has to
30 days from the date of registration. be done within 60 days from the
registration.
• Appointment can also be done by • Appointment can also be done by
the members at extraordinary the board of directors within 30 days
general meeting within 90 days of of incorporation.
information. • Members can also appoints at an
extraordinary general meeting within
60 days of information.
 Rights of Auditor

Right to access the Right to get

01 books of records
02 explanations from
company staff

Right to receive notice Right to visit branches

03 of general meeting
04
 Right to examine the Right to correct any
01 cost records
02 wrong information

Right to comment on Right to receive

03 inadequacy of
04 remuneration for his
accounting system in work
his report
L i a b i l i ti e s
Civil liabilities
01

Criminal liabilities
02

Liabilities under
03 companies act 2013

Liabilities for
04 professional
misconduct
L i a b i l i ti e s

Liabilities towards
01 third party

Liabilities under
02 income tax act
What is meant by winding up of a
Company?
Winding up is the process of liquidating a company. While winding
up, a company ceases to do business as usual. Its sole purpose is to
sell off stock, pay off creditors, and distribute any remaining assets to
partners or shareholders.

Tuesday, February 2, 20XX Sample Footer Text 68

The modes of winding up may be discussed under the following three heads,
namely:-
1. Compulsory winding up by the court. 
2. Voluntary winding up without the intervention of the court. 
3. Voluntary winding up with the intervention of the court i.e., under the
supervision of the court.

Tuesday, February 2, 20XX Sample Footer Text 69

Mode 1 : Compulsory Winding up by the Tribunal.

Winding up of a Company by an order of the court is called the

compulsory winding up. Section 433 of the Companies Act lays
down the circumstances under which a Company may be
compulsorily wound up.

Tuesday, February 2, 20XX Sample Footer Text 70

Section 271 of Companies Act ,
2013 provides grounds for winding
up of a company by NCLT:
• (a) If the Company has by special resolution, resolved that the
Company may be wound up by the court.
• (b) If default is made in delivering the statutory report to the
Registrar or in holding the statutory meeting.

Tuesday, February 2, 20XX Sample Footer Text 71

• (c) If the Company does not commence its business within a
year from its incorporation or suspends it for a whole year.
• (d) If the number of members is reduced, in the case of a
public Company below seven, and in the case of a private
company below two.

Tuesday, February 2, 20XX Sample Footer Text 72

 For commencing proceedings under section 271 , a petition is to be
made to the tribunal. According to section 272 , this petition may
be made by any of the following persons .

• A) The company ;

• B) Any contributory or contributories ;

• C) All or any of the person specified in clauses A and B;

• D) The Registrar ;

• E) Any person authorized by the Central Government in that behalf.

Tuesday, February 2, 20XX Sample Footer Text 73

Mode 2: Voluntary Winding Up

A voluntary winding up occurs without the

intervention of the court. Here the
Company and its creditors mutually settle
their affairs without going to the court..
The Process of Voluntary Winding up of
solvent company is now shifted from
the Companies Act,. 2013 to Insolvency
and Bankruptcy Code, 2016 w.e.f. 1st
April , 2017.
Tuesday, February 2, 20XX Sample Footer Text 74
A corporate person is liable to opt
for voluntary liquidation under two
conditions:
(a)Either the company has no debt or that it will be able to pay its debt in
full from the proceeds of assets to be sold in the voluntary liquidation.

AND

(b) The company is not been liquidated to defraud any person.

Tuesday, February 2, 20XX Sample Footer Text 75

Section 488 provides for two types
of voluntary winding up;

• (a) Member’s voluntary winding up and

• (b) Creditor’s voluntary winding up.

Tuesday, February 2, 20XX Sample Footer Text 76

Procedure of Voluntary winding:

• Step 1: Declaration/Announcement of Solvency by Board or

Elected Partners .

• Step 2: Find an Insolvency Expert as Liquidator.

• Step 3: Summon A Board Meeting .

• Step 4: Arrange A General Meeting.

• Step 5: Filings with the Registrar of Companies and IBBI 

• Step 6: Liquidator Takes Charge of The Company .

• of Shareholders
Tuesday, February 2, 20XX Sample Footer Text 77
• Step 7:Making Public Announcement .

• Step 8: Preliminary Reports and Statements.

• Step 9: Opening of A Bank Checking Account.

• Step 10: No-Objection Certificate from Tax Authorities 

• Step 11: Realization of Company’s Assets 

• Step 12: Distribution and Supply 

• Step 13: Completion of the Company’s Liquidation 

• Step 14: Liquidation stretching beyond the 12 months duration and

Annual Reports 

Tuesday, February 2, 20XX Sample Footer Text 78

• Step 15: Final Report on Liquidation

• Step 16: Final Report Filing 

• Step 17: Application to National Company Law Tribunal (NCLT) 

• Step 18: NCLT Orders 

• Step 19: Sending The NCLT Order To The Company Registrar

Tuesday, February 2, 20XX Sample Footer Text 79

The court will issue such an order
only under the following
circumstances:
(a) If the resolution for winding up was obtained by fraud by
the company; or
(b) If the rules pertaining to winding up are not being properly
adhered to; or
(c) If the liquidator is found to be prejudicial or is negligent in
releasing the assets of the company.
The Court may exercise the same powers as it has in the case
of compulsory winding up under the order of the court.
Tuesday, February 2, 20XX Sample Footer Text 80
 Summary

According to Halsburry's Laws of England, “Winding up is a

proceeding by means of which the dissolution of a company is brought
about & in the course of which its assets are collected and realised;
and applied in payment of its debts; and when these are satisfied, the
remaining amount is applied for returning to its members the sums
which they have contributed to the company in accordance with
Articles of the Company.” Winding up is a legal process.

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