Companies Act 2013: Key Managerial Personnel (KMP)

Characteristics of Joint Stock Company

• Shareholders are the real owners of the company, but they cannot manage the day-to-day affairs due to their large number, scattered location, and frequent changes.
• The Board of Directors is elected by shareholders to manage the company and make policy decisions.

Transferability of Shares

• Shares of a public company are freely transferable, allowing shareholders to sell their shares as desired.
• Membership ends once shares are sold.

Membership

• A private limited company must have a minimum of 2 members and a maximum of 200 members.
• A public limited company must have a minimum of 7 members, with no limit on the maximum number of members.

Capital

• Joint Stock Companies can raise huge capital due to a large number of members.
• Capital can be collected through shares, debentures, bonds, public deposits, and loans from banks and financial institutions.

Government Control

• Joint Stock Companies operate under government control and supervision, requiring compulsory registration.
• Registered companies must follow regulations stated in company law.

Types of Companies

• Forms of business organization include Sole Trading Concern, Joint Hindu Family Business, Partnership Firm, Limited Liability Partnership, Joint Stock Company, and Co-operative Society.

Joint Stock Company

• A Joint Stock Company is a registered association with an independent legal entity, perpetual succession, common capital, and limited liability.
• It is a formal form of business organization developed after the industrial revolution.

Types of Joint Stock Companies

• Types of companies based on incorporation: Statutory Company and Registered Company.
• Types of companies based on the number of members: Private Company, Public Company, and One Person Company.

Company Secretary

• A Company Secretary is included in the definition of Key Managerial Personnel (KMP).
• Appointment of Company Secretary is as per the Companies Act 2013.
• Qualification: A Company Secretary must be a member of the Institute of Company Secretaries of India (ICSI).

Secretary of Government Department

• A Secretary is the administrative head of a Ministry or Department in the Government.
• Qualification: A Secretary needs to possess a graduation degree and pass the Civil Services Examination conducted by the Public Service Commission, and be in Indian Administrative Services (IAS).