Professional Documents
Culture Documents
NAME
ROLL.NO.
ARITRA BANERJEE
B070543CE
AVINASH KUMAR
B070462CE
B.JAGADEESH REDDY
B070549CE
MAYANK PANWAR
B070311CE
B070587CE
RAGHUL RAVINDRAN
B070423CE
B070449CE
Definition
A Joint Stock Company is a voluntary association of
individuals for profit, having its capital divided into
transferable shares, the ownership of which is the condition
of membership.
A company is an incorporated association of persons
formed usually for the pursuit of some commercial purpose.
Section 3(1) of Indian Companies Act, 1956-Company
means a company formed and registered under this Act or
an existing company
Its
Incorporation
a voluntary association of persons formed and incorporated
under the existing law.
Artificial person
created by legal process and not by natural birth. Even though
it has no natural personality, it has legal personality
Common Seal
every company by law must have a common seal on which its
name is engraved. The common seal can serve as its
signature.
1.
2.
Perpetual succession
men may come and men may go but a company remains
forever. It can be wound up only under the provisions of the
act.
Limited liability
usually the liability of members of a company is limited to
the extent of uncalled or unpaid value of shares held by them.
Share capital
The capital required by the company is raised by issuing
shares.
The member who holds the shares of a company can transfer
its ownership any other person, without the companys
permission.
4) Financial Sources
5) Preparation of Essential Documents like Memorandum,
Articles and Prospectus of company.
The promoters carryout these various activities to give the
company its physical shape in the form of
Giving a name to the company
Sanctioning of Capital Issue
2) Payment of Registration Fee the registration fee is paid to the Registrar for
Application and documents filing fee
Registration fee
Stamp fee on Memorandum and Articles
3) Certificate of Incorporation If the registrar finds all the documents right, he issues
the certificate of incorporation to promoters.
b) Allotment of Shares
c) Minimum Subscription certified that the shares have been allotted up to an amount, not
less than the minimum subscription.
3) Unlimited Companies
i) The liability of the members is unlimited.
ii) In the event of winding up of the company. the private
property of the member can be used to pay the debts of the
firm.
iii)Due to the high risk involved, such companies are not found
in India.
On the basis of Membership
1) Private Limited Company
A private limited company is the one which by its articles
i) Limits the maximum number of its members to 50, minimum
being 2.
2) Foreign Companies:
i) company which is registered in one country but carries out
its operations in India.
2. Formation
Comparatively simple, certificate of Comparatively difficult as the procedure
incorporation is adequate
is lengthy.
3. Number of Directors:
It must have at least two directors
4. Transfer of Shares:
The shares are not freely transferable
5. Issue of Prospectus:
It is allowed to issue prospectus
6. Commencement of Business:
It can start the business after the It requires trading certificate for starting
receipt of certificate of incorporation. business
7. Suitability:
Suitable for business on a small scale
8. Invitation:
It cannot invite public to subscribe for It invites public to purchase securities of
securities of the company
the company.
9. Allotment:
It can allot shares immediately after Shares cannot be allotted unless
incorporation
minimum subscription is collected.
10.
Qualification shares:
The directors need not
qualification shares
11.
Directorship:
There is no restriction on the number
of directorship
12.
Quorum:
Two members present in the meeting is a
quorum at general meeting
iv) can raise funds from general public through open invitations
by selling its shares or accepting fixed deposits.
v) required to write either public limited or limited after their
names.
Examples :Hyundai Motors India Limited, Steel Authority of
India Limited, Jhandu Pharmaceuticals Limited etc.
3) Government Company
i) the Govt (either state or central Gvt or both) holds a majority
share capital i.e., not less than 51%.
ii) companies having less than 51% share holding by the govt
can also be called Govt companies provided control and
management lies with the Govt.
4) Indian Company
i) A company having business operations in India and registered
under the Indian Companies Act, 1956
ii) company may be formed as a public limited, private limited
or government company.
5) Foreign Company
i) a company formed and registered outside India having
business operations in India.
3.Bonus Shares:
A part of the companys profit is transferred to reserves.
Out of such reserves a company issues bonus shares. Such
shares are issued to the equity share holders of the company
free of charge. Infact bonus shares are also equity shares.
5.Qualification Shares:
The articles of a company usually require a director to
hold certain number of shares to be eligible as a director. Such
shares are called qualification shares.
The directors must obtain qualification shares within 6
months from his appointment as a director. If he does not
purchase the qualification shares within the prescribed period
he ceases to be the director of the company. He can purchase
the shares from the company itself or from the stock market.
(a)Statutory Meeting
The statutory meeting is held to inform the shareholders in
respect of matters relating to:
Allotment of shares
Receipts and payments made by the company, etc.
Incorporation of the company.
Details of preliminary expenses.
Details of the contracts concluded by the company or changes
in the existing contract.
Details of further prospects of the company
Any special matters which require approval of the
shareholders is placed before them at this meeting.
Rank
Economy
Stock Exchange
Market Capitalization
(USD Billions)
Trade Value
(USD Billions)
United States
and Europe
NYSE Euronext
15970
19813
United States
and Europe
NASDAQ OMX
4931
13439
Japan
Tokyo Stock
Exchange
3827
3787
United Kingdom
London Stock
Exchange
3613
2741
China
Shanghai Stock
Exchange
2717
4496
Hong Kong
2711
1496
Canada
Toronto Stock
Exchange
2170
1368
India
Bombay Stock
Exchange
1631
258
India
National Stock
Exchange of India
1596
801
10
Brazil
BM&F Bovespa
1545
868
11
Australia
Australian
Securities
Exchange
1454
1062
12
Germany
Deutsche Bores
1429
1628
13
China
Shenzhen Stock
Exchange
1311
3572
14
Switzerland
SIX Swiss
Exchange
1229
788
15
Spain
BME Spanish
Exchanges
1171
1360
Partnership
Joint Stock Company
1. Meaning:
Here 2 or more people come together for It is voluntary association, artificial person
doing some business and making profit
created by law having a common seal and
perpetual succession
2. Formation:
Relatively easy, less legal formalities Formation difficult, too many legal
involved
formalities involved.
3. Capital:
It can raise limited capital due to limitation It can raise large capital due to large
on the number of members and their members
capacity
4. Liability:
Liability of partners is unlimited joint and Members liability limited to the face value
several
of shares
5. Ownership and Management:
There is no difference in ownership and There is no difference in ownership and
management
management
6. Flexibility:
More flexible, compared to Joint Stock
Companies
7. Continuity and Stability:
Lacks continuity and stability, business may
come to an end with death, insolvency and
insanity of partners
8. Business Secrecy:
Can be maintained to a certain extent
No business secrecy
9. Government Regulation:
Minimum government regulation
10.
Taxation:
Less compared to joint stock companies
12.Economies of scale:
Less economies of scale as compared to Joint Stock Enjoys economies of scale as it undertakes
Companies
business on a large scale
13.Bargaining Power:
Generally weak bargaining power
15.Legal status:
No legal status
16.Act:
Governed by Partnership Act, 1932
(i)
(ii)
(iii)
(iv)
(v)
(vi)
(vii)
(viii)
(ix)
(x)
(xi)
(i)
(ii)
(iii)
(iv)
(v)
(vi)
(vii)
(viii)
(ix)
(x)
(xi)
(xii)
Difficult to form
Excessive government control
Delay in policy decisions
Concentration of economic power and wealth in few hands
Labour Disputes
Lack of Responsibility
Lack of Secrecy
Double Taxes
Lack of contact with customers
Lack of contact with employees
Conflicts of Interest
Not suitable for all types of business