COMPANY ACT- B

(1956)
GROUP-
 DIRECTOR
• Sec 2 (13) defines a director as any person occuping the
position of director,by whatever name called”.

• In reality,,directors are the persons who

direct,conduct,manage or superintend a company’s affairs.

• Sec 291 has entrusted the management of affairs of the

company in directors hand.
 APPOINTMENT
The appointment of Director is in the following hands :-

Supscribers to memorandum sec254 clause 64.

Company in general meeting sec 255-57,263,265.

Board of directors S260,262,313.

Central Government S408.

Third parties S255.

 QUALIFICATION
Act does not prescribe any acedamic or professional
qualification for directior.
Regulation 66 of Act provide that Director must
hold at least one share in company.
Sec(270) provides that:-
It must be disclosed in prospectus.
Director must take his Qualification share with in
two month of appointment.
value of share must not exceed Rs.5,000.
Private company may provide additional
qualification such as a person must be B Com.
 DISQUALIFICATION (sec 274)
A person found by a court to be of unsound mind.

A person who has been convicted of an offence under

sec 209A

A person who fails to pay call on shares alone or jointly

with in six month from date fixed for payment.

A person who has being disqualified by court under Sec

203.

A person who is already a director of public company &

has not filled the annual retuns for three continuous
 REMUNERATION SEC(309)
The director may recive remuneration by way of a monthly
Payament.

 or at a specified percentage of net profits of a company.

5% of net profits for one director
10% of net profit for more than one directors.

The director who is nither a whole time employe of a

company nor a managing director a remuneration is paid
Either by a way of monthly,quarterly or annualy payment with
approval of central Govt. or by way of commision.
The resolution shall remain in force for a maximum
period of five years.

The remuneration paid to any director who is neither

in the whole time employment of company shall not
exceed,
1% of net profit.
3% of net profit in any other cases.
However,company in general meeting may with the
approval of central government increase these rates.

This rules is not applicable to private company.

WINDING UP OF COMPANY
It is the process where by its life is ended and Its
property is administered for the benefit of its creditors
and members.

Modes of Winding up Sec (425)

1. Compulsary winding up under an order of court

2. Voluntary winding up.
3. Voluntary winding up under supervision of court.
 WINDING OF UNREGISTERED
COMPANY
As per Sec 582 Unregistered company mean company
consisting more than seven members at the time of
application for winding up is presented before the
court.

cirrcumstances
1. If companyiniswhich company
carrying may
business be for
only wound up of
purpose
are;- winding up its affaies.
2. Company is unable to pay debits.
3. If court feel that it is just equitable that company
should be wound up.
 TYPES OF SHARES
According to the section 2(46) of the Company’s Act 1956,
share means a part in the share capital of the company and
it also includes stock except where a distinction between
stock and share capital is made expressed or implied.
As per the provision of section 85 of the Companies Act,
1956, the share capital of a company consists of two
classes of shares, namely:

 Preference Shares
 Equity Shares
• preference share: A preference share is one, which carries
the following two preferential rights:

(a) The payment of dividend at fixed rate before paying

dividend to equity shareholders.

(b) The return of capital at the time of winding up of the

company, before the payment to the equity shareholder.
Types of preference shares:

Cumulative Preference Shares:In this the amount of divided

if not paid in any year, due to loss or inadequate profits, it
will be paid in the subsequent years before any divided is
paid to the equity share holders.
Non-Cumulative Preference Shares:shares on which
arrear of dividend do not accumulate. Therefore if
divided is not paid on these shares in any year.

Participating Preference Shares: Participation preference

shares are those shares, which, in addition to the basic
preferential rights, also carry one or more of the
following rights
(a) To receive dividend, out of surplus profit left after
paying the dividend to equity shareholders.

(b) To have share in surplus assets, which remains after

the entire capital has been paid on winding up of the
company.
 Non-Participating Preference Shares: Are those shares,
which do not have the following rights:

(a) To receive dividend, out of surplus profit left after

paying the dividend to equity shareholders.

(b) To have share in surplus assets, which remains after the

entire capital has been paid on winding up of the company.
Convertible Preference Shares: Convertible preference
shares are those shares, which can be converted into
equity shares on or after the specified date according to
terms mentioned in the prospectus
Non-Convertible Preference Shares: which cannot be
converted into equity shares. Preference shares are
always being to be non-convertible, if the Article of the
company is silent.

Redeemable Preference Shares:Are those shares which

can be redeemed by the company on or after the certain
date after giving the prescribed notice. These shares are
redeemed in accordance with the terms and sec. 80 of
the Company’s Act 1956.

. Irredeemable Preference Shares: shares which cannot

be redeemed by the company during its life time, in
other words these shares can only be redeemed by the
Equity shares:
section 85 (2)Equity share are the share which is not a
preference share. The rate of divident is not fixed.

The board of directors recommend the rates at AGM.

 These shares are also known as ‘Risk Capital’.

The rate of dividend depends on the profit earned by the

company.

The equity shareholders have the right to vote on each and

every resolution placed before the company and the holders of
these shares are the real owners of the company.
 
 SHARE CAPITAL
Share capital of the company can be explained as a fund or
sum with which a company is formed to carry on the
business and which is raised by the issue of shares.

The amount collected by the company from the public

towards its capital, collectively is known as share capital and
individually is known as share.

Investment in the shares of any company is a basis of

ownership in the company and the person who invest in the
shares of any company, is known as the shareholder, member
and the owner of that company.
 TYPES OF MEETING
For a meeting, there must be at least 2 persons attending
the meeting. One member cannot constitute a company
meeting even if he holds proxies for other members.

The Act has made provision for the following different types
of meeting of shareholder
i. Statutory Meeting s.165
ii. Annual General Meeting s166-168
iii.Extraordinary General Meeting s.169
iv. Class Meeting. s.170
Annual General Meeting sec
(166-168)

Every company must in each year hold an annual general

meeting. Not more than 15 months must elapse between
two annual general meetings. However, a company may
hold its first annual general meeting within 18 months
from the date of its incorporation. In such a case, it need
not hold any annual general meeting in the year of its
incorporation as well as in the following year only.
 CONCLUSION
The company act-II 1956 contains the various
sections for appointment of director,his
qualification,disqualification.criteria for winding of
a company,shares,types of shares and Also
specifies the period of meetings to be conducted
by a company during a year.

so for a company to work properly should follow

the rules as per the specific sections in the act.
THANK YOU!