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The Companies Act 1994
The Companies Act 1994
to the registered. Prospectus and alternative are not essential in a public company. If submitted to
the registered.
Minimum Capital Sec- 148(1) A private company must collect minimum capital which is
essential for its purpose, all of, share and business is mandatory. Sec-148 (13) To all of, share
business are not mandatory.
Numbers of Directors. Sec-90 A private company must have at least 2 directors Sec- 90(21)(2) A
public company must have at least 3 directors.
Managerial Remuneration. This rule does not apply to a private company. In this case of public
company there is certain limit of remuneration. Schedule 1 (170.)
Index of members of company. Sec-35 (1) A private company need index not mandatory. A
public company need index mandatory.
Appointment of Directors Sec- 91(1)(b) This rule does not apply in private company. Company
shall be appointed directors by the members among their members in general meting.
Company own share In a private company a person can get financially assistance for processing
the own share. This rule is not using this company.
Issue of share warrant. Sec- 46 (1) This rule does not apply in private company. A public
company is its authorized by it articles may, with respect to any full paid up shares or stock
under a common seal, it can issue shares warrant.
2 (3). State the procedure for the conversation of a public company into a private company?
Section 232. Amendment of Articles for conversion of a public company into private company:
1. A public company, having not more than fifty members at the time of conversion, may be
converted into a private one by passing a special resolution altering its articles so as to exclude
provisions, if any, in the articles of association applicable to public company and include therein
provisions applicable to a private company.
2. If the company has secured creditors, their written consent shall have to be obtained before
passing a resolution as per provision of sun-section (1) and the shares enlisted with the Stock
Exchange shall have be delisted.
According to Section 87 (2) of the Companies Act 1994, A resolution shall be a special
resolution when it has been passed by such a majority as is required for the passing of an
extraordinary resolution and at a general meeting of which not less than twenty-one days notice
specifying the intention to propose the resolution as a special resolution has duly been given:
provided that if all the members entitled to attend and vote at any such meeting so agree, a
resolution may be proposed and passed as a special resolution at a meeting of which less than
twenty-one days notice has been given. Again Section 87 (1) suggests that An extraordinary
resolution has to be passed by a majority of not less than three-fourths of such members entitled
to vote as are present in person or by proxy. That means a special resolution requires two
criteria: (i) twenty-one days notice for the general meeting specifying the intention to propose
the resolution as a special resolution (ii) resolution has to be passed at the general meeting by a
majority of not less than three-fourths of such members who are entitled to vote as are present in
person or by proxy
3 (1). Define memorandum of association and article?
Memorandum of Association:
The memorandum of association of a company, often simply called the memorandum (and then
often capitalised as an abbreviation for the official name, which is a proper noun and usually
includes other words), is the document that governs the relationship between the company and
the outside
Article of Association Definition:
The Articles of Association or just Articles are the rules, regulations and bye-laws for the internal
management of the affairs of a company. They are framed with the object of carrying out the
aims and objects as set in the memorandum of Association.
3 (2). State the contents of Memorandum and Article of association?
Contents of Memorandum:
The Memorandum of every company shall contain the following clauses1. The name clause:
a. Undesirable name to be avoided.
b. Injunction if identical name adopted.
c. Limited or Private Limited as the word or words of the name.
d. Prohibition of use of certain names.
e. Use of some key words according to authorized capital.
2. The registered office clause.
3. The objects clause. .
4. The capital clause..
5. The liability clause.
6. The association clause.
Contents of Article:
Articles usually contain provisions relating to the following matters:
1. Share capital, rights of shareholders, variation of these rights, payment of commissions, share
certificates.
2. Lien on shares.
3. Calls on shares.
4. Transfer of shares.
5. Transmission of shares.
6. Forfeiture of shares.
7. Conversion of shares into stock.
8. Share warrants.
9. Alteration of capital.
10. General meetings and proceedings thereat.
11. Voting rights of members, voting and poll, proxies.
12. Directors, their appointment, remuneration, qualifications, powers and proceedings of Board
of directors.
13. Manager.
14. Secretary.
15. Dividends and reserves.
4. Short Note:
i. Joint stock company.
ii. The doctrine of indoor management.
iii. Doctrine of ultra vireos.
5 (1). State how the memorandum can be altered?
5(2). What are the legal effects of the memorandum of association?
ALTERATION OF OBJECTS:
(1) Subject to the provisions of this Act, a company may, by special resolution, alter the
provisions of its memorandum with respect to the objects of the company, so far as may be
required to enable it-a. To carry on its business more economically or more efficiently.
b. To attain its main purpose by new or improved means.
c. To carry on some business which may conveniently or advantageously be combined with the
objects specified in the Memorandum.
d. To enlarge or change the local area of its operations.
e. To restrict or abandon any of the objects specified in the Memorandum.
f. To sell or dispose of the whole, or any part, of the undertaking, or of any of the undertakings,
of the company; or
g. To amalgamate with any other company or body of persons.
Procedure of alteration:
i. Special resolution.
ii. Copy of special resolution to be filed.
iii. Certification of registration.