Samacheer Kalvi 12th Commerce Notes Chapter 26 Companies Act, 2013
→ The concept of “company” or corporation in business is not new, but was dealt with, in 4th century BC itself during Arthashastra days. The earliest business associations in England were the merchant guilds. Some of the merchant Associations or guilds who have regulated the company.
→ A royal charter established the East India company in the year 1600.
→ The Joint Stock Companies Act was passed in India by introducing the concept of limited liability in the year 1857.
→ In 1913 the Indian companies Act of 1913 was passed. The Act introduce the institution of private companies in the corporate sector.
→ Body corporate means a corporate entity which has a legal existence. According to section 2 (11) “Body Corporate” or corporation includes private company, public company and small company, limited liability partnership and foreign company incorporated outside India but does not include a co-operative society.
→ Promotion stage begins when the idea to form a company comes in the mind of a person. The person who envisage the idea is called a promoter. The memorandum of association is the charter of a company. It is a document, which amongst other things, defines the area within which the company can operate. It contain the name clause, liability clause and subscription clause.
→ A business person invest in the business and in case of company raise the capital by issue of shares. They use this money to meet its requirements by way of acquiring business premises and stock in Trade.
→ A share certificate is an instrument in writing that is a legal proof of the ownership of the number of shares stated in it.
→ A share warrant is a negotiable instrument, issued by the public limited company only against fully paid up shares.
→ When a company needs funds for extension and development purpose without increase its share capital, it can borrow from the general public by issuing certificates for a fixed period of time and at fixed rate of interest. Such a loan certificate is called debenture.