SupplementaryNotesCompanyLawForDecember,2012Exam

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DIFFERENCEBETWEEN Company Partnership

ContactNo.9331963835,9239521128,9433352926.

Acompanyisadistinctlegalperson.

KUMARLAWCLASSES

A partnership firm is not distinct from the several persons who composeit. Property of the Company belongs to the company and not to the Property of the Partnership firm is the property of the individuals individualscomprisingit. comprisingit. The creditors of a company can proceed only against the company The creditors of a partnership firm are creditors of individual andnotagainstitsmembers. partnersandadecreeagainstthefirmcanbeexecutedagainstthe partnersjointlyandseverally. Membersofacompanyarenotitsagents. Partnersaretheagentsofthefirm. AmemberofacompanycancontractwithhisCompany. Apartnercannotcontractwithhisfirm.

Company
Acompanyconsistsofheterogeneous(variedordiverse)members.

HinduJointFamilyBusiness

HUFconsistsofhomogenous(unvarying)memberssinceitconsists ofmembersofthejointfamilyitself. Company is an artificial person and is formed and registered by HUFiscreatedbytheoperationoflaw. complying with the prescribed formalities prescribed under the CompaniesAct. A person becomes member of a company by acquiring share and A person becomes a member of Joint Hindu Family business by whosenameisenteredintheRegisterofMembers. virtueofbirth. Registrationofacompanyiscompulsory. Noregistrationiscompulsoryforcarryingonbusinessforgainbya HinduJointFamilyevenifthenumberofmembersexceedstwenty.

Company

Corporation

A company is formed and registered by complying with the ACorporationisformedunderanylawforthetimebeinginforce. prescribedformalitiesprescribedundertheCompaniesAct. Acompanyincludesacorporationsole,cooperativesociety. Acorporationincludesacompanybutdoesnotincludecorporation sole,cooperativesociety. CompanyisnarrowtermthanCorporation. CorporationisbroadertermthanCompany. Liabilityofmembersarelimited. Liabilityofmembersareunlimited. Corpusisknownassharecapital. Corpusisknownascapital.

Company
A Company is governed by Companies Act, 1956 and various rules madethereunder. The word Limited or Private Limited is added with the name of a company. EachDirectorrequiredto haveaDirectorIdentificationNumber(DIN)

LimitedLiabilityPartnership(LLP)
LLP is governed by The Limited Liability Partnership Act, 2008 and variousRulesmadethereunder. The word LLP or Limited Liability Partnership is added with the nameofaLLP. Each Designated partner required to have a DPIN before being

SupplementaryNotesCompanyLawForDecember,2012Exam

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ContactNo.9331963835,9239521128,9433352926.

beforebeingappointedasaDirectorofanycompany. appointedasaDesignatedPartnerofLLP. MinimumtwoforprivateCompany andminimumsevenpersonsare Minimumtwopartners arerequiredfortheformationofaLLP. requiredforpubliccompanyaspertheCompaniesAct,1956. Maximum 50 in case of Private Company and Unlimited number of Nocapofmaximumnumberofitspartners. memberinPublicCompanyaspertheCompaniesAct,1956.

PrivateCompany
IncaseofPrivateCompany,Minimum2membersandMaximum50 members. The name of a Private company must end with the word Private Limited. InaPrivatecompany,therighttotransferthesharesisrestrictedby thearticlesofassociation. A private company can commence its business soon after obtaining thecertificateofincorporation. APrivateCompanymusthaveatleast2Directors.

PublicCompany
IncaseofPublicCompany,Minimum 7membersandnoMaximum limitofmembers. ThenameofaPubliccompanymustendwiththewordLimited. ThesharesofaPublicCompanyisfreelytransferable. APubliccompanycancommencebusinessonlyafterobtainingthe certificate of incorporation as well as the certificate of commencementofbusiness. A PublicCompanymusthaveatleast3Directors.

KUMARLAWCLASSES

CompanyLimitedbyShares
Acompanyinwhichtheliabilityofitsmembersis determinedonthe basisoftheamount,ifany,remainingunpaidontheshareISheldby themistermedasacompanylimitedbyshares'. Theliabilityofthemembersislimitedtothe extentofnominalvalue ofsharesheldbythem. The liability can be enforced against the members of the company duringtheexistenceofthecompanyorduringthewindingupofthe company.

CompanyLimitedbyGuarantee
A company having the liability of its members limited by its memorandum to such amount as the members may respectively undertaketocontributetotheassetsofthecompanyintheeventof itsbeingwoundupistermedasa'companylimitedbyguarantee'. Theliabilityofthemembers istopaytheamountguaranteedbyhim onlyifthecompanyiswoundupwhileheisamemberorwithinone yearafterheceasestobeamember. The liability can be enforced against the members of the company during the winding up of the company. The members cannot be asked to pay the guaranteed amount during the life time of the company.

HoldingCompany

SubsidiaryCompany

DefinedunderSection2(19)oftheCompaniesact. DefinedunderSection2(47)oftheCompaniesact. Holding Company means a holding Company within the meaning of ACompanyshallbedeemedtobeasubsidiaryCompanyofanother Section4oftheCompaniesact. if,thatothercompanyholdsmorethanhalfofthenominalvalueof itsequitysharecapitalorcontrolsthecompositionofitsBoardorit is a subsidiary company of any company which is subsidiary companyoftheothercompany.

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MemorandumofAssociation

ArticlesofAssociation

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KUMARLAWCLASSES

AOA of the company is a document which regulates the internal managementofthecompany. AOA being only the byelaws of the company can be altered by a specialresolution. AOAaresubordinatetothememorandum.Itcannotalterorcontrol thememorandum. Everycompanymusthaveitsownmemorandum. A company limited by shares need not register its AOA. In such a casetableAapplies. A company cannot depart from the provisions contained in its Anythingdoneagainsttheprovisionsofarticles,butwhichisintra memorandum,andifitdoes,itwouldbeultraviresthecompany. viresthememorandum,canberatified.

MOA is the charter of the company and defines the scope of its activities. MOA cannot be altered except in the manner and to the extent providedbytheact. MOAisasupremedocumentofthecompany.

ShelfProspectus
ItisdefinedunderSection60AoftheCompaniesact,1956. 'Shelf Prospectus' means a prospectus issued by any financial institutionorbankforoneormoreissuesofthesecuritiesorclassof securitiesspecifiedinthatprospectus. A Company filing a Shelf Prospectus with the Registrar shall not requiretofileprospectusafreshateverystageofofferofsecurities byitwithinaperiodofvalidityofsuchprospectus.

InformationMemorandum
ItisprovidedunderSection60BoftheCompaniesact,1956. A public company making an issue of securities may circulate information memorandum to the public prior to filing of a prospectus. However, It shall require to file an Information Memorandum at everystageofofferofsecuritiesbyit.

PreferenceShareCapital

EquityshareCapital

Preference shares are those shares which enjoy preference as Equitysharesarethoseshareswhodonotenjoyanypreferenceas regardspaymentofdividendandrepaymentofcapital. regardspaymentofdividendandrepaymentofcapital. Therateofdividendonpreferencesharesisfixed. The rate of dividend on equity shares is not fixed and usually dependsontheprofitabilityofthecompany. Preferenceshareholdersarepaidtheircapitalfirst. Equity shareholders are paid their capital after the preference shareholdersarepaid. Preferenceshareholdersdonothavenormalvotingrights. Equityshareholdershavenormalvotingrights. Preference shareholders receives dividend in preference of equity Equitysharesreceivedividendafteritispaidtopreferenceshares. shareholders.

NominalCapital
This is the sum stated in the memorandum of association of a companylimitedbysharesasthecapitalofthecompanywithwhich it is registered. It is the maximum amount which the company is authorizedtoraisebyissuingshares.

IssuedCapital
It is that part of the authorised or nominal capital which the company issues for the time being for public subscription and allotment.Thisiscomputedatthefaceornominalvalue.

SupplementaryNotesCompanyLawForDecember,2012Exam

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Thisisthecapital,onwhichthecompanyhadpaidtheprescribedfee atthetimeofregistration;henceitisalsocalledRegisteredCapital.

ContactNo.9331963835,9239521128,9433352926.

SubscribedCapital

CalledupCapital

It is that portion of the issued capital at face value which has been Itisthatportionofthesubscribedcapitalwhichhasbeencalledup subscribed for or taken up by the subscribers of shares in the ordemandedonthesharesbythecompany. company.

ReserveCapital
Reserve Capital is that part of the uncalled capital of a company whichthelimitedcompanydecidebypassingaspecialresolution,not tocallexceptinthespecifiedevent. Reservecapitalcanbeusedbythecompanyonlyincaseofwinding upofthecompany. Reservecapitalisnotdisclosedinthebalancesheetofthecompany. Reservecapitalcannotbeusedforthatpurpose.

CapitalReserve
Capital reserve is created out of capital profits (profit due to reevaluation of assets) and therefore it is not available for distributionasdividendtotheshareholders. Capitalreservecanbeusedbycompanyatanytimeforpurchasing longtermassetsbythecompany. Capitalreserveisshownontheliabilitiessideofthebalancesheet. Capital reserve can be used by the company to write off capital losseswhicharisesduetosellingofassetsatlowerpricesthanthe bookvalueofthatasset

KUMARLAWCLASSES

Shares
Asharehasanominalvalue. Asharecannotbetransferredintosmallfractions. Sharescandirectlybeofferedtopublic.

Stock
Stockhasnonominalvalue. Stockcanbetransferredintoanyfractions. Unlike the shares, stock cannot be offered by the company to the public in the first instance. Only fully paid up shares can be convertedintostockbythecompany. Stockdiscloses theconsolidatedvalueofthesharecapital.Fraction ofstocksdoesnotbearanynumber. Astockisalwaysfullypaidup.

Allsharesbeardistinctivenumber. Asharemaynotbefullypaidup.

BonusShares
Bonussharesmeansnewsharesgivenfreeofcosttoalltheexisting shareholdersofthecompany,inproportiontotheirholdings. Forexample,acompanyannouncingbonusissueof1:5,isissuingone (new)bonusshareforeveryfivesharesheldbytheshareholdersof thecompany.

RightShares
Rights issues are a proportionate number of shares available to all theexistingshareholdersofthecompany,whichcanbeboughtata givenprice(usuallyatadiscounttocurrentmarketprice)forafixed periodoftime. For example, a company announcing rights issue of 2:3 at Rs. 100 per share (current share price Rs. 130 per share), is issuing two (new)rightssharesforeverythreesharesheldbytheshareholders ofthecompanyatRs.100pershare.

SupplementaryNotesCompanyLawForDecember,2012Exam

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Equity

Debenture
Debentureholdersarecreditorsofthecompany. Debentureholdercanenjoytherightsofalenderonly. Debentureholdersdonothaveanyvotingright,andtherefore,they areunabletoexerciseanysuchinfluence. Debentureholdersareentitledtointerestatafixedratewhichthe companymustpaywhetherornotthereareprofits. Debentures are normally issued for a specified period after which theyarerepaid.

ContactNo.9331963835,9239521128,9433352926.

KUMARLAWCLASSES

Shareholdersareownersofthecompany. Ashareholderenjoystherightsofproprietorshipofacompany. Ashareholderhasarightofcontrolovertheworkingofthecompany byattendingandvotinginthegeneralmeeting. Ashareholderisentitledtoreceivedividendwhenthereareprofits. The rate of dividend varies from year to year depending upon the amountofprofit. Shareholders cannot be paid back (except in case of redeemable preferenceshares)solongasthecompanyisagoingconcern.

PreferenceShares
PreferenceShareholdersareeffectivelyownersoftheCompany. PreferenceShareholdersreceiveprofitintheformofdividends. If there is no profit, the payment of dividend to Preference Shareholderscanbepostponed. Incaseofdissolution,PreferenceShareholdersholdersarepaidlater thanDebentureholder.

Debentures
DebentureholdersarecreditorsoftheCompany. Debentureholdersreceiveafixedrateofinterest. Interestispaidtodebentureholdersregardlessofwhetherornota profithasbeenmade. In case of dissolution of firms debenture holders are paid first as comparedtoPreferenceshareholder.

SweatEquity
SweatEquitySharesmeansequitysharesissuedbythecompanyto employeesordirectorsatadiscountorforconsiderationotherthan cashforprovidingknowhowormakingavailablerightsinthenature of intellectualproperty rights or value additions, by whatever name called. Sweat Equity is grant of shares at discount or without monetary considerations. SweatEquitycanbeissuedtothepromotersoftheCompany. Minimumlockinperiodof3yearsforSweatEquity.

EmployeesStockOption(ESOP)
EmployeeStockOption(ESOP)meanstheoptiongiventothewhole timedirectors,officersoremployeesofacompany,whichgivessuch directors,officersoremployeesthebenefitorrighttopurchaseor subscribeatafuturedate,thesecuritiesofferedbythecompanyat apredeterminedprice. ESOP/ESOS is grant of option to purchase share at predetermined pricegiventoemployees. ESOP/ESOScannotbeissuedtothepromotersorpromotergroup. Lockinperiodof1yearforESOS/ESPS.

AlterationofShareCapital
Itisgovernedbysection94oftheCompaniesAct,1956. Itisrequiredtobedonebyordinaryresolution. Itdoesnotrequiredconfirmation bythecourt Alterationofsharecapitalmaybedoneinthefollowingmanner: 1.Increasingitsnominalcapitalbyissuingnewshares. 2.Consolidatinganddividingalloranyofitssharecapitalintoshares oflargedenomination.

ReductionofShareCapital
Itisgovernedbysection100oftheCompaniesAct,1956. Itisrequiredtobedonebyspecialresolution Itrequiresconfirmationbythecourt. Reductionofsharecapitalmaybedoneinthefollowingmanner: 1.Extinguishingorreducingtheliabilityofmembersinrespectofthe capitalnotpaidup. 2.Writing off or canceling any paid up capital which is in excess of

SupplementaryNotesCompanyLawForDecember,2012Exam

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3.Convertingfullypaidupsharesintostockorviceversa. theneedsofthecompany. 4.Sub dividing its shares or any of them into shares of smaller 3. Paying off any paid up share capital which is in excess of the amount. needsofthecompany. 5. Canceling shares which have not been taken up and diminishing theamountofsharecapitalbytheamountofthesharessocancelled.

Loan
Aloanisrepayabletheminuteitisincurred. Obligationtorepayisimmediate.

Deposit
Deposits are repayable upon the maturity date fixed or in accordancetothetermsoftheagreement. Noimmediateobligationtorepay.

KUMARLAWCLASSES

Deposit

Debenture

Deposit are repayable after the expiry of six months but not later NosuchlimitincaseofDebenture. than thirty six months from the date of acceptance or renewal of suchdeposits. Depositsarenottransferable. Debenturesaretransferable.

Debenture
Itisaninstrumentofdebt. Debentureneednotbefullypaidup. Itcanbetransferredwholly. Itisidentifiedbydistinctnumber.

DebentureStock
Itisadebtorsumsecuredbyaninstrument. Debenturestockmustbefullypaidup. Itcanbetransferredinfraction. Nodistinctnumber

Mortgage
Amortgageiscreatedbytheactoftheparties.

Charges

A charge may be created either through the act of parties or by operationoflaw. AmortgagerequireregistrationundertheTransferofPropertyAct. A charge created by operation of law does not require the registration But a charge created by act of parties requires registration. Amortgageisforafixedterm. A chargemaybeinperpetuity. A mortgage is a transfer of an interest in specific immovable A charge only gives a right to receive payment out of a particular property. property. A mortgage is a transfer of an interest in a specific immovable Thereisnosuchtransferofinterestinthecaseofacharge.Charge property. does not operate as transfer of an interest in the property and a transferee of the property gets the property free from the charge providedhepurchasesitforvaluewithoutnoticeofthecharge.

ShareCertificate

ShareWarrant

The holder of a share certificate is a registered member of the The bearer of a share warrant is not a registered member of the company. company.

SupplementaryNotesCompanyLawForDecember,2012Exam

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Holderofasharecertificateisessentially amemberofthecompany.

ContactNo.9331963835,9239521128,9433352926.

Thebearerofasharewarrantcanbeamemberonlyifthearticles soprovideandonlyforthepurposesasdefinedinthearticles. Theissueofasharecertificatedoesnotrequiretheapprovalofthe Share warrant can be issued only if the articles authorise its issue CentralGovernment. andtheCentralGovernmenthasaccordeditspreviousapproval. Bothpublicandprivatecompaniesmustissuesharecertificates. Sharewarrantscanbeissuedonlybypubliccompanies. Asharecertificateisissuedinrespectofpartlyorfullypaidshares. Asharewarrantcanbeissuedonlyinrespectoffullypaidshares.

ForfeitureofShare
ForfeitureisinitiatedbytheCompanyfornon paymentofcalls. Byforfeitureofshares,thecompanypenalizesthemember. Forfeitureofsharesmaybeinitiatedfornon paymentofcall.

SurrenderofShare
Itisinitiatedbytheshareholdersonhisownforanyotherreason. In surrender of shares, new shares are bought in exchange of surrenderofoldshares. Surrender shares may be accepted in the good faith in its own interest the shares which the shareholder is voluntarily surrendering.

KUMARLAWCLASSES

TransferofShare
Transferisavoluntaryactofamember. Considerationisalwaysinvolvedintransfer. Transfer is effected as transfer ofproperty when a member intends tosellit. Incaseoftransfer,thememberhastoexecuteavalidinstrumentof transfer.

TransmissionofShare
Transmissionisbyoperationoflaw. Noquestionofconsideration,hencenostampduty,etc. Transmissiontakesplaceonlyonthedeath,bankruptcyandlunacy ofthemember. Incaseoftransmission,executionofinstrumentisnotpossible.

LienonShare
Lien can be exercised in respect of amount due on the shares and amountsdueonotheraccounts. A lien is a kind of security for a debt and to be retained until the paymentofdebtinfull. Alienisenforcedbysaleofsharestoadjusttheoutstandingdues. Intheeventofexerciseoflien,bysaleofshares,surplus,ifany,isto bereturnedtothemember. Incaseoflien,itdoesnotresultinreductionofcapitalassharesare soldtorecoverthedueamount.

ForfeitureofShare
Rightofforfeitureisexercisedforamountsdueonsharesonly. Forfeitureislikeapenaltyclausetoenforcethepaymentofmoney dueonsharesintime. Forfeitureisactofdeprivinghimofrightsinforfeitedshares. In the event of forfeiture, the member cannot claim refund of moneyalreadypaidbyhim. Incaseofforfeitureitmayresultinreductionofcapitalifsharesare notsoldorreissued.

SharesinPhysicalForm
Sharecertificatesareissuedinphysicalform. Stampdutyistobepaidontransferdeed.

SharesinDematerializedform
Sharesareissuedinelectronicform. Nostampdutyispaidontransfer.

SupplementaryNotesCompanyLawForDecember,2012Exam

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Therearechancesoftheft,lossetc. Nochanceoftheft,forgeryorloss. Notrequiredtoopenaccountwithanybody. Itisnecessarytoopenademataccountwithdepositoryparticipant. Transfer of shares takes longer time due to physical transit of Immediatetransferofshares,asittakesintheelectronicform. documents.

WholeTimeSecretary
Section 383A(1) of the Companies act, 1956 provides that every companyhavingpaidupcapitalofnotlessthan5croresshallhavea WholeTimeCompanySecretary. The whole time Secretary shall be appointed as a whole time employeeoftheCompany. Thewholetimesecretaryhasstatutoryandgeneraldutiesprescribed intheCompaniesact.HealsoactsasPrincipalofficerundervarious acts. He also acts as officer in default as per Section 5 of the Companiesact.

SecretaryinWholeTimePractice
Section2(45A)ofthecompaniesact,1956providesthataSecretary whoshallbedeemedtobeinpracticewithinthemeaningofsection 2(2)oftheactandwhoisnotinfulltimeemployment. HeisamemberoftheInstituteofCompanySecretariesofIndiaand hasacertificateofPracticeissuedbytheICSI. Unlike,thewholetimesecretary,hedoesnothaveanystatutoryor Administrativeduty.Hisareaofpracticehavebeenspecifiedandhe mustcomplywiththesame.

KUMARLAWCLASSES

ManagingDirector
Managing Director is defined under Section 2(26) of the Companies act,1956. A Managing Director means a director who, by virtue of an agreement with the company or of a resolution passed by the companyingeneralmeetingorbyitsboardofdirectorsorbyvirtue of its memorandum or articles of association is entrusted with substantial powers of management which would not otherwise be exercisablebyhimandincludesadirectoroccupyingthepositionofa managingdirector,bywhatevernamecalled. OnlyaDirectorcanbeappointedas ManagingDirector. TheremaybetwoormoreManagingDirectorsinaCompany. AManagerbyvirtueofhisofficehasthemanagementofthewhole orsubstantiallythewholeoftheaffairsofacompany.

Manager
ManagerisdefinedunderSection2(26)oftheCompaniesact,1956. A Manager means an individual who subject to the superintendence,controlanddirectionoftheBoardofDirectorshas the management of the whole or substantially the whole of the affairs of a company and includes a director or any other person occupyingthepositionofamanagerbywhatevernamecalledand whetherunderacontractofserviceornot. ManagermayormaynotbeaDirector. ThereshallonlyoneManagerinaCompany. A Managing Director is entrusted with substantial powers of managementwhichwouldnototherwisebeexercisablebyhim.

WholeTimeChairman

PartTimeChairman

A chairmancummanaging director (CMD) is sometimes called a A director, who is not a wholetime director of the company, is wholetimechairman. calledaparttimechairman.

Motion

Resolution

Motion is a proposal submitted for a discussion. A motion becomes a Adecisionadoptedbymeansofaresolution. resolutiononlyaftertherequisitemajorityofmembershaveadoptedit.

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Adjournment

Postponement
Postponement of a meeting is to put off or defer the holding of a meetingbeforethedateoriginallyfixedforthemeetinghasarrived. Postponementistheactoftheconveningauthority

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Adjournment means suspending a meeting after it has been duly commenced to be resumed at a later time or date fixed in that meetingitselfatthetimeofsuchadjournmentortobedecidedlater on. Adjournmentistheactofmeetingitself.

StatutoryBooks
The Companies Act, 1956, requires certain books to be kept by a companyformaintainingarecordofitsdifferentactivitiesinorderto safeguard the interests of the shareholders and creditors. These booksareknownasStatutoryBooks. Fewofthemareasfollows: (1). Register of investments not held by it in its own name (2). Registeroffixeddeposits.(3).RegisterofSecuritiesboughtback(4). Registerofcharges(5).RegisterandIndexofMembers(6).Register and Index of Debenture holders (7). Minutes Book of Board and General Meetings (8). Dividend Register (9). Register of directors, managing directors, manager and secretary (10). Register of DirectorsShareholdings.

StatisticalBooks
Althoughthereisnolegalcompulsion,acompanyusuallymaintains anumberofstatisticalbooksinordertokeepcompleterecordsof thenumerousdetailsconnectedwiththebusinessoperations. Fewofthemareasfollows: (1).ShareApplicationandAllotmentBook(2).ShareCallBook(3). Share Certificate Book (4). Share Transfer Book (5). Debenture InterestBook(6).DirectorsAttendanceBook(7).DividendMandate Register (8). Share Warrants Register (9). Register of lost share certificates(10).Registeroflostsharecertificates.

KUMARLAWCLASSES

Statutoryaudit
The Statutory Auditor is appointed by the Company in accordance withtheprovisionofSection224oftheCompaniesact. First Auditor is appointed within one month of incorporation of the Company. Under Statutory audit, Auditors Report is submitted to the ShareholderattheAnnualGeneralMeeting.

Specialaudit
Section 233A of the Companies act empowers the Central Government to appoint either any Chartered Accountant or the companys own auditor to conduct a special audit in certain circumstances. Under Special Audit, auditors submit their report to the Central Government.

Dividend
Dividendispaidonpreferenceandequityshares A dividend becomes a debt only after it has been declared by the company. Generally,Dividendisnotdeclaredandpaidincaseofloss. Dividendisanappropriationofprofits.

Interest
Interest is paid on debentures and long term and short term loans/borrowingsincludingfixeddeposits. Interest is a debt which like all debts is paid out of the companys assetsgenerally. Interestispaidevenincaseofloss. Interestisachargeonprofits.

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Members'VoluntaryWindingUp

Creditors'VoluntaryWindingUp
Acreditors'voluntarywindingupisonewherenosuch declaration isfiled.

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A members' voluntary winding up results where, before convening the general meeting of the company at which the resolution of windingupistobepassed,themajorityofthedirectorsfilewiththe Registrarastatutorydeclarationofsolvency. Inamembers'voluntarywindingup,thecreditorsdonotparticipate directlyinthecontroloftheliquidation,asthecompanyisdeemedto besolvent Thereisnomeetingofcreditorsinamembers'voluntarywindingup.

KUMARLAWCLASSES

Inacreditors'voluntarywindingup,thecompanyisdeemedtobe insolvent and, therefore, the control of liquidation remains in the handsofthecreditors. Inacreditors'voluntarywindingup,meetingofcreditorshavetobe calledatthebeginning. Inamembers'voluntarywindingup,theliquidatorcanexercisesome Inacreditors'voluntarywindingup,hecandosowiththesanction of his powers with the sanction of a special resolution of the of the Court or the Committee of Inspection or of a meeting of company. creditors.

WindingupsubjecttotheSupervisionoftheCourt
In the case of winding up subject to the supervision of Court, LiquidatormaybeappointedbytheCourt. After commencement of winding up any transfer of shares/disposition of property can take place only with the permission of the Court in the case of winding up subject to the supervisionofCourt. After commencement of winding up subject to the supervision of Court, any attachment, distress or execution against the company withouttheleaveoftheCourt,isvoid.

VoluntaryWindingup
Inthecaseofvoluntarywindingup,Liquidatorisappointed bythe members/creditorsandtheCourthasnoroleinthisregard. Transfer of shares/disposition of property in the case of voluntary windingupcantakeplaceonlywiththepermissionoftheliquidator.

However,itisnotsointhecaseofvoluntarywindingup.

LimitedLiabilityPartnership(LLP)

ProducerCompany

Suitableforpartnershipconcernssetupbyprofessionalsviz.Charted Thesecompaniesareformedbythemanufacturers,producers Accountants, Company Secretaries etc. though anybody can join an etc. LLP. Twoormorepersonscarryingonalawfulbusiness. Any ten or more individual producer or two or more producer institutionsortheircombination. LimitedtotheLimitedLiabilityAgreement. Limitedtotheamountofunpaidshare,heldbythem. Appointmentofdirectorsisnot required.Organizationisrunbythe Minimumfiveandmaximumfifteendirectors. designatedpartners/partners. CapitalcontributionasgivenintheLLPagreement. Thesharecapitalofproducercompanyisdividedintoequityshares only. Mayconverttootherformsofbusiness. Noconversionclauseexists.

10

SupplementaryNotesCompanyLawForDecember,2012Exam

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Theword'LLP'wouldformpartofitsname.

The word'ProducerCompanyLimited'wouldformpartofitsname.

Trust

Bailment
Baileedoesnotbecometheownerofthebailedproperty. Theobligationofbaileeis legal Abailmentmaybeonlyinrespectofmovableproperty Inabailment,generallypropertycomes backtothebailer

ContactNo.9331963835,9239521128,9433352926.

Atrusteebecomestheownerofthetrustproperty. Theobligationoftrusteeisequitable. Atrustcanbecreatedbothinrespectofmovablepropertyaswellas immovableproperty. Inatrust,generallypropertydoesn'tcomebacktotheauthor.

Agency
Anagenthasnotitletotheproperty. Anagentactsonbehalfoftheprincipal. Anagentisnotpersonallyliable,ifheactsonbehalfoftheprinciple.

Trust
Atrusteeisthefullownerofthetrustproperty. Atrusteeactsinhisownright. Ontheotherhand,atrusteeispersonallyliable.

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