1.

What is a Company?

In legal terms., a Company means a company formed and registered under the Companies Act, 1956.

2.

What are the types of companies?

• Private company.
• Public company.
• Apart from this basic classification, there could be companies like a company limited by shares, a company limited by guarantee, an unlimited company etc.

3.

What is a private company?

Section 3 (1) (iii) of The Companies Act, 1956, defines a Private Company as a company which has minimum Paid Up Capital of Rs. One Lac or such higher Paid up Capital as may be prescribed by its Articles of Association and :

• restricts the right to transfer Shares.
• limits the number of its members to fifty.
• prohibits an invitation to the Public to subscribe for any shares in, or debentures of, the Company.
• prohibits any invitation or acceptance of deposits from persons other than its members, directors or their relatives.

4.

What is a public company ?

Section 3(1) (iv) of The Companies Act, 1956, defines a Public Company as a company which

• is not a Private Company.
• has a minimum Paid up capital of Rs. Five Lacs or such higher paid-up capital, as may be prescribed,

5.

How many directors and members are required to form a Company?

• In case of a Private Company  - minimum 2 Directors and 2 members
• In case of a Public Company  - minimum 3 Directors and 7 members
• Maximum number of members in case of Private Company is 50 and an unlimited number in case of a Public Company.

6.

What are Memorandum of Association (MOA) and Articles of Association (AOA)?

• MOA is a document which contains the fundamental provisions of the Company’s constitution. It defines the powers and the areas of operation of the Company.
• AOA  contains rules and regulations relating to the internal management of the company.
• A company cannot be formed without MOA and AOA

7.

What is a Director Identification Number (DIN)?

Every Director, present or proposed, is required to obtain a unique identification from Ministry of Company Affairs which is known as Director’s Identification Number (DIN). DIN is a lifetime Number.

8.

What is digital signature and when is it required?

A digital signature is the electronic signature duly issued by the Certifying Authority that shows the authenticity of the person signing the same. It is used to sign eForms. eForms are electronic versions of various  forms and applications under the Companies Act, 1956 and the rules & regulations there under.

9.

Which forms are required to be filed by a company yearly?

The Annual Return and the Balance Sheet are required to be filed with Registrar of Companies on a yearly basis. Other forms to be filed on a yearly basis depend upon events like allotment of shares (Form 2), change in directorships (Form 32), increase in Authorized Capital (Form 5), change in registered office (Form 18) etc.

10.

What are the statutory requirements regarding holding meetings of a company?

Every company must hold an Annual General Meeting (AGM) of members in each calendar year. There can be any number of Extra-ordinary General Meetings (EGMs) between two AGMs. There should be one meeting of the Board of Directors of the Company in every three calendar months and at least 4 such meetings shall be held in a year