Description
Explains the feature of companies 1956, key elements of formation of company, different kind of companies like based on membership, based on incorporation, based on liabilities, based on control, public vs private company, partnership vs company, merger and acquisitions.
www.a2zmba.com
INTRODUCTION
? Cherished child of English parents
? First passed in India in 1850 ? First amendment in the year 1857 ? Amended several times later
www.a2zmba.com
THE COMPANIES ACT 1956
? Came into force on 1st april 1956
? Based largely on the recommendations of company law
committee (Bhabha committee) ? Largest piece of legislation (658 sections and 15 schedules)
www.a2zmba.com
FEATURES
? Full and fair disclosure of various matters in the
prospectus ? Detailed information of financial affairs of the company to be disclosed in its accounts ? Provision for intervention and investigations by the government into the affairs of the company
www.a2zmba.com
FEATURES (Contd…)
? Restrictions on powers of managing agents and other
managerial personnel ? Enforcement of proper performance of their duties by company management ? Protection of minority shareholders
www.a2zmba.com
FORMATION OF COMPANY
? Documents to be filed
? MOA (Memorandum Of Association) ? AOA (Articles Of Association) ? A statement of the normal / authorized capital ? A notice of address of the registered office of the
company ? List of directors* ? An undertaking* ? A declaration
www.a2zmba.com
FORMATION OF COMPANY ( contd… )
? Certificate of Incorporation ? Certificate of Commencement of Business ? Promoter
? Preliminary or Pre-Incorporation contracts ? Provisional contracts
? Liability of Promoters ? Remuneration of Promoters
www.a2zmba.com
KINDS OF COMPANIES
? BASED ON “MEMBERSHIP”
? Private Company
-Min no. of members: 2 -Max no. of members: 50 -Restricts right to transfer its shares -Prohibits public issue of shares or debentures ? Public Company -Min no. of members: 7 -Max no. of members: Unlimited -Doesn’t restrict right to transfer its shares -Doesn’t Prohibit public issue of shares or debentures
www.a2zmba.com
KINDS OF COMPANIES ( contd…)
•
BASED ON “INCORPORATION” ? Chartered companies -companies which are incorporated under a special charter granted by the king or queen in exercise of royal power. -East India Company(1600) ? Statutory Companies -which are created by special act of parliament or state legislature at central or state govt. level -Reserve Bank of India ? Registered Companies – are companies which are registered under the co.’s act of 1956
www.a2zmba.com
KINDS OF COMPANIES ( contd…)
?
BASED ON “LIABILITIES” ? Co.’s limited by SHARES –companies in which the liability of its members is limited to the extent of the amount unpaid on the shares held by a particular member. ? Co.’s limited by GUARENTEE -the liability of members is limited to a fixed amount which members undertake to contribute to the assets of the company in case of its winding up. ? Unlimited Co.’s –wherein members are liable for the debts of the company irrespective of their interest in the company
www.a2zmba.com
? BASED ON “CONTROL”
A) B)
? Holding Company -51% of the share capital ? Subsidiary Company –less that 51% ? Govt. Companies – MNTC, ONGC ? Foreign Companies – IBM, MICROSOFT
www.a2zmba.com
PUBLIC CO.
VS.
PRIVATE CO.
? Number of members ? Commencement of business ? Invitation to public ? Transferability of shares
? Number of directors
? Statutory meeting ? Restrictions on appointment of directors
? Managerial remuneration
? Further issue of capital
www.a2zmba.com
PARTNERSHIP
? Registration
? Number of members ? Legal status
VS.
COMPANY
? Liability
? Creditors ? Dissolution on death
? Property
? Contracts ? Management ? Life duration
? Agency relationship
? Transfer of interest ? Statutory obligations
www.a2zmba.com
MERGERS AND ACQUISITIONS
? MERGER:
Combination of two companies to form new company or to run business under any one of the merging companies’ name. Eg.:1. NBC Universal; NBC and Vivendi Universal Entertainment 2. US Airways; with America West Airways 3. Sony Ericson; Sony and Ericson 4. NSN; Nokia and Siemens
www.a2zmba.com
? ACQUISITION:
Purchase of one company by another with no new company being formed. Eg.:1. P&G buys Gillette 2. Tata steel acquires Corus 3. Google buys Youtube 4.Vodafone acquires Hutch
www.a2zmba.com
MOTIVES AND BENEFITS OF M&A
? Economies of scale
? Improved market reach ? Reduction in Tax liability
? Diversification of risk
? Limit competition ? Eliminating the financial constraints ? Synergy
www.a2zmba.com
TYPES OF MERGES
? Horizontal merger
? Vertical merger ? Market-extension merger
? Product-extension merger
? Conglomerate merger
www.a2zmba.com
M&A -ITS FINANCING
? All Shares Deals
? Cash ? Hybrids
DEMERGER/SPIN-OFF/SPIN-OUT: -Effective opposite of a merger -One Co. splits into two
www.a2zmba.com
doc_963454476.ppt
Explains the feature of companies 1956, key elements of formation of company, different kind of companies like based on membership, based on incorporation, based on liabilities, based on control, public vs private company, partnership vs company, merger and acquisitions.
www.a2zmba.com
INTRODUCTION
? Cherished child of English parents
? First passed in India in 1850 ? First amendment in the year 1857 ? Amended several times later
www.a2zmba.com
THE COMPANIES ACT 1956
? Came into force on 1st april 1956
? Based largely on the recommendations of company law
committee (Bhabha committee) ? Largest piece of legislation (658 sections and 15 schedules)
www.a2zmba.com
FEATURES
? Full and fair disclosure of various matters in the
prospectus ? Detailed information of financial affairs of the company to be disclosed in its accounts ? Provision for intervention and investigations by the government into the affairs of the company
www.a2zmba.com
FEATURES (Contd…)
? Restrictions on powers of managing agents and other
managerial personnel ? Enforcement of proper performance of their duties by company management ? Protection of minority shareholders
www.a2zmba.com
FORMATION OF COMPANY
? Documents to be filed
? MOA (Memorandum Of Association) ? AOA (Articles Of Association) ? A statement of the normal / authorized capital ? A notice of address of the registered office of the
company ? List of directors* ? An undertaking* ? A declaration
www.a2zmba.com
FORMATION OF COMPANY ( contd… )
? Certificate of Incorporation ? Certificate of Commencement of Business ? Promoter
? Preliminary or Pre-Incorporation contracts ? Provisional contracts
? Liability of Promoters ? Remuneration of Promoters
www.a2zmba.com
KINDS OF COMPANIES
? BASED ON “MEMBERSHIP”
? Private Company
-Min no. of members: 2 -Max no. of members: 50 -Restricts right to transfer its shares -Prohibits public issue of shares or debentures ? Public Company -Min no. of members: 7 -Max no. of members: Unlimited -Doesn’t restrict right to transfer its shares -Doesn’t Prohibit public issue of shares or debentures
www.a2zmba.com
KINDS OF COMPANIES ( contd…)
•
BASED ON “INCORPORATION” ? Chartered companies -companies which are incorporated under a special charter granted by the king or queen in exercise of royal power. -East India Company(1600) ? Statutory Companies -which are created by special act of parliament or state legislature at central or state govt. level -Reserve Bank of India ? Registered Companies – are companies which are registered under the co.’s act of 1956
www.a2zmba.com
KINDS OF COMPANIES ( contd…)
?
BASED ON “LIABILITIES” ? Co.’s limited by SHARES –companies in which the liability of its members is limited to the extent of the amount unpaid on the shares held by a particular member. ? Co.’s limited by GUARENTEE -the liability of members is limited to a fixed amount which members undertake to contribute to the assets of the company in case of its winding up. ? Unlimited Co.’s –wherein members are liable for the debts of the company irrespective of their interest in the company
www.a2zmba.com
? BASED ON “CONTROL”
A) B)
? Holding Company -51% of the share capital ? Subsidiary Company –less that 51% ? Govt. Companies – MNTC, ONGC ? Foreign Companies – IBM, MICROSOFT
www.a2zmba.com
PUBLIC CO.
VS.
PRIVATE CO.
? Number of members ? Commencement of business ? Invitation to public ? Transferability of shares
? Number of directors
? Statutory meeting ? Restrictions on appointment of directors
? Managerial remuneration
? Further issue of capital
www.a2zmba.com
PARTNERSHIP
? Registration
? Number of members ? Legal status
VS.
COMPANY
? Liability
? Creditors ? Dissolution on death
? Property
? Contracts ? Management ? Life duration
? Agency relationship
? Transfer of interest ? Statutory obligations
www.a2zmba.com
MERGERS AND ACQUISITIONS
? MERGER:
Combination of two companies to form new company or to run business under any one of the merging companies’ name. Eg.:1. NBC Universal; NBC and Vivendi Universal Entertainment 2. US Airways; with America West Airways 3. Sony Ericson; Sony and Ericson 4. NSN; Nokia and Siemens
www.a2zmba.com
? ACQUISITION:
Purchase of one company by another with no new company being formed. Eg.:1. P&G buys Gillette 2. Tata steel acquires Corus 3. Google buys Youtube 4.Vodafone acquires Hutch
www.a2zmba.com
MOTIVES AND BENEFITS OF M&A
? Economies of scale
? Improved market reach ? Reduction in Tax liability
? Diversification of risk
? Limit competition ? Eliminating the financial constraints ? Synergy
www.a2zmba.com
TYPES OF MERGES
? Horizontal merger
? Vertical merger ? Market-extension merger
? Product-extension merger
? Conglomerate merger
www.a2zmba.com
M&A -ITS FINANCING
? All Shares Deals
? Cash ? Hybrids
DEMERGER/SPIN-OFF/SPIN-OUT: -Effective opposite of a merger -One Co. splits into two
www.a2zmba.com
doc_963454476.ppt