Types of Companies - Company Law

These flashcards cover essential concepts of company law, types of companies, attributes, advantages, and regulations according to the lectures.

What is meant by the incorporation of a company?

The legal process used to form a corporate entity, making it a separate legal entity recognized by law.

What distinguishes a statutory company from a registered company?

A statutory company is formed by a special act of parliament and is fully financed by the government, while a registered company is established under the general provisions of the Companies Act.

What are the key benefits of incorporation?

Protects owner's property from company liabilities, allows quick ownership transfer, offers lower tax rates, and facilitates capital appreciation through stock sales.

Define a statutory corporation.

A body corporate formed by a special act of legislation, fully owned by the government, and answerable to the parliamentary legislature.

List one advantage of a statutory corporation.

Administrative autonomy allows for independent management and decision-making, free from government interference.

What is the difference between a company limited by guarantee and one limited by shares?

A company limited by guarantee has members who act as guarantors up to a specific amount, while a company limited by shares has liability based on unpaid share capital.

What is the required minimum paid-up capital for a public company?

A public company must have a minimum paid-up capital of Rs 5 Lakhs.

What attributes characterize a private company?

A private company limits members to 200, restricts share transfer, and must include 'Private Limited' in its name.

What are the essential features of a One Person Company (OPC)?

An OPC has only one member, limited liability, and is treated as a separate legal entity distinct from its promoter.

Describe the purpose of a Section 8 Company.

It is a non-profit organization aimed at promoting charitable activities and cannot distribute profits among its members.

What are the main qualifying criteria for a dormant company?

A dormant company must not conduct significant accounting transactions, have all necessary compliance up to date, and must not have any outstanding liabilities.

What must a company do to declare itself dormant?

Pass a Special Resolution, file Form MSC-1 with the Ministry of Corporate Affairs, and obtain the Registrar of Companies' approval.

What is a producer company?

A body corporate formed by producers engaged in primary produce activities, combining elements of a private limited company with cooperative principles.