Company Act, 1994, (Part-1)
Company Act, 1994, (Part-1)
Definition
Oxford Dictionary
• “A business organization that makes money by producing or selling goods or services.”
Sec 2 of the Company Act, 1994 states that,
• “Company means a company formed and registered under this Act or an existing
company.”
Justice John Marshall
• “A company is an artificial person, invisible, intangible & existing only in contemplation
of law”
Solomon vs. Solomon & Co. (1897)
• “Company is a legal person, separate from & capable of surviving beyond the lives of
its members.”
Elements/Features
a. Registration or incorporation: COMPULSORY
b. Voluntary association: Free consent
c. Legal entity or personality
d. Contractual capacity: To NP vs AP, & AP vs AP
e. Capital: minimum capital for private: 1 lac & public: 5 lac
f. Management: Chairman, CEO, MD, DMD, Director etc.
g. Permanent existence: Unlike human being
Elements/Features
h. Registered office/location/address.
i. Common seal, logo etc.
j. Limited liability: As per License.
k. Not a citizen: Unlike human being.
l. Transferability: Any percent at any time.
m. Statutory obligations: AGM, Annual report, Auditing, Tax etc.
Types
Generally there are two types of company:
1. Registered
2. Unregistered: Ex: Partnership business
Registered company
a. Chartered Company Ex: East India Co.
b. Statutory Company
Types
Statutory Company: 3 kinds,
a. Domestic Company: Rahim steel
b. Foreign Company: Air India
c. Multinational Company: Beximco Pharma, Crown cement, PRAN
Domestic Company: 2 kinds,
a. Private Company----- i) Limited
b. Public Company ------ i) Limited ii) Unlimited
Limited Company
a. Limited by shares
b. Limited by guarantee
Types
Another Companies:
a. Holding company: The company who holds/controls all subsidiary
companies. Ex: Bashundhara Group of companies/BRAC
b. Subsidiary company: The company who is controlled/governed
by Holding company. Ex: Bashundhara Tissue/Cement. Aarong (A sister
concern)
c. Non-trading or non-profit company: No profit = No tax
d. Investment company: Stock exchange companies.
e. Public financial company: Ex: Jibon Bima Corporation
Differences between Private & Public Co.
Topic Private company Public company