Company Administration: meaning of company

Company and its basic information

1. UNIT-1 Introduction to Company

2. Introduction: Joint stock company is a type of corporation or partnership involving two or more individuals that own shares of stock in the company, certificates of ownership are issued by the company in return for each financial contribution and the shareholders are free to transfer their ownership at any time by selling their shareholding.

3. Meaning of a Company: Company refers to a voluntary association of different persons created by law as a separate body for specific purposes. Or Company refers to a voluntary association formed and organised to carry on a business. This is an organization or collection of individuals, whether natural persons, legal persons or a mixture of both.

4. Meaning of Joint stock company: Joint stock company refers to a company having a joint stock or capital that is divided into units of ownership of interest. Such as shares which may be transferred without consent of the other shareholders.

5. Definition of joint stock company: Under sec 3(1) of Indian companies Act 1956, “ A joint stock company means a company formed and registered under this Act1956(or) any of the previous company’s law 1850.” 2013

6. Features of Joint stock company: Artificial person sue and can be sued Common seal Compulsory Incorporation Perceptual succession Limited liability Share capital Legal entity Large membership Separation of ownership and management

7. Advantages of joint stock company: Limited liability Continuity and stability Professional management Large capital Economies of scale/ Large scale of production Bargaining power Large membership Transferability of shares Employment Government revenue Research and development Economic development Higher profits

8. DISADVANTAGES OF JSC Lacks Flexibility No business secrecy Excessive government regulation Difficult formation Delay in decision making Lack of contact with customers Not suitable for all types of business Exploitation of shareholders

9. STEPS IN FORMATION OF A JSC 1. PROMOTIONAL STAGE: A. idea about business B. investigation C. assemble various factors D financial sources E. preparation of essential documents 2. INCORPORATION STAGE: Filing of Document MOA AOA List of directors Written consent of directors Declaration qualifying shares Prospects Statutory declaration

10. b. Payment of registration fee c. Certificate of incorporation 3. CAPITAL SUBSCRIPTION STAGE 4. CERTIFICATE OF COMMENCEMENT Issue of prospects Allotment of shares Minimum subscription