Ans. A Company is an artificial legal person having its own separate existence, distinct from its owners.
Ans. Perpetual existence means that the company can continue indefinitely until it is dissolved as per law. The existence of company is independent of the existence of its members.
Ans. Minimum number of members required for a private limited company are 2 and for a public limited company, the minimum required members are 7. Another form of company structure gaining popularity these days is a One Person Company which can be formed by a single member.
Ans. The maximum number of members allowed in a private limited company is 200. There is no limit on maximum number of members in case of a public limited company.
Ans. There must be at least 2 directors in a private limited company and at least 3 directors in a public limited company.
Ans. MOA stands for Memorandum of Association. MOA is the main document of the company defining the constitution, powers and the objects of the company. AOA stands for Articles of Association. AOA is subordinate to MOA and contains rules and regulations governing the working of the company for achieving its stated objectives.
Ans. Since company is a separate legal person distinct from its owners, the company alone is responsible for meeting the liabilities incurred by it. The owners can be held liable for the liabilities of the company only to the extent of their capital contribution in the company. The personal assets of the owners are therefore safe in case the company is unable to discharge its liabilities. However, the limited liability holds good as long as there isn’t any fraud committed by the owners. In case of any fraud, owners may be asked to pay up out of their personal assets. This is also known as lifting of corporate veil.
Ans. DIN stands for Director Identification Number. It is an 8-digit number designed to uniquely identify a director. Every person who is desirous of becoming director in a company needs to obtain DIN. A person can be allotted a single DIN even though he/she may be a director in more than 1 companies.
Ans. Company of Incorporation is issued by the Registrar of Companies once the process of formation of company is complete. A private limited company can commence its business as soon as it receives Certificate of Incorporation.
Ans. LLP combines the features of partnership firm and company. In case of LLP, each partner has liability limited to the capital investment made by that partner in the firm as opposed to a regular partnership firm where each partner has unlimited liability.
Ans. (a) PAN, Photograph, ID proof and Address Proof of Director and Shareholder
(b) Address proof of registered office
(c) DIN of directors
Yes government fees is required to be paid for company registration. The amount of fees varies from state to state.
Ans. A company is required to get its accounts audited each year irrespective of the turnover or the profit earned by the company.
Ans. As per the Companies Act, 2013, the name of the proposed company should not be identical to the name of an already existing company. The name of the company should not be undesirable and should not contain any offensive words or words like state, government etc.
Ans. The entire registration process is online. There is no need to visit the office of Registrar of Companies for getting the company registered.
Ans. A private limited company is eligible of being registered as a Start-up which allows it to claim various tax benefits, subsidies and easy access to finance and capital.
Ans. A company can raise loans from banks and other financial institutions. It can also raise deposits from general public. A public limited company can also raise money from general public by way of an IPO and by getting its shares listed on a stock exchange.
Ans. There is no minimum paid up capital requirement for starting a private limited companybut there must be an authorized capital of Rs. 1 lakh. However, for a public limited company, minimum paid up capital of Rs. 5 lakhs is required.
Ans. Authorized capital is the maximum amount of capital that the company can raise. It represents the maximum value of shares that a company can legally issue. Paid up capital is the actual amount of capital raised by the company by way of issue of shares. Paid up capital will always be less than or equal to the authorized capital.
Ans. Any person whether natural or artificial can become shareholder in a company. Shareholder can be an individual, HUF, partnership firm, association or even any other body corporate.
Ans. As per Companies Act, 2013, only an individual can become a director in a company.