Questions and Answers
What is the primary characteristic of a company limited by guarantee?
What distinguishes a government company from other types of companies?
What is NOT a limitation of a private company?
What is the minimum number of members required to form a public company?
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Which of the following accurately describes an unlimited company?
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What does 'perpetual succession' mean in the context of company law?
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What defines a foreign company?
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What is true regarding the concept of the corporate veil?
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What is required to form a producer company?
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Study Notes
Body Corporate Overview
- A body corporate is an incorporated association of persons with perpetual succession, a common seal, and a legal entity separate from its members.
- Defined under Section 2 (11) of the Companies Act, 2013, it includes companies incorporated outside India but excludes cooperative societies and other specified bodies.
Types of Corporation
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Corporation Sole
- Consists of a single person with corporate status, e.g., Presidents or public trustees.
- Not considered a body corporate under the Companies Act but can be members of a company.
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Corporation Aggregate
- Made up of a group of persons forming a single entity, like a limited company or trade union.
Companies Act Provisions
- Foreign companies operating in India must comply with local regulations, such as delivering documents to the Registrar of Companies.
- The term "corporation" or "body corporate" is broader than "company," with a company classified as a corporation aggregate.
Common Seal and Juristic Personality
- A metallic common seal is mandatory for corporate documents, unless opted out post-2015 amendments.
- Companies can sue and be sued in their name due to their separate legal existence, allowing them to enter contracts.
Quorum for General Meetings
- Public companies need a minimum of:
- Five members if fewer than 1,000 members are present.
- Fifteen members if between 1,001 and 5,000 members are present.
- Thirty members if more than 5,000 members are present.
- Private companies require only two members for a quorum unless specified otherwise in the articles.
Managerial Remuneration
- No limits on remuneration in private companies.
- Public companies cannot exceed 11% of net profits for total managerial remuneration; individual directors cannot exceed 5% without government approval.
Public Deposits
- Public companies may accept public deposits, subject to regulation, while private companies are restricted from doing so.
Basis of Liability for Companies
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Company Limited by Shares
- Liability limited to the unpaid amount on shares held by members.
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Company Limited by Guarantee
- Liability limited to the amount members agree to contribute if the company is liquidated.
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Unlimited Company
- Members' liability is unlimited.
Different Types of Registered Companies
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Producer Company
- Engaged in activities related to primary produce, formed by at least ten producers or two producer institutions.
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One Person Company
- Allows a single individual to operate a company, limiting liability.
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Small Company
- Defined by eligibility criteria based on turnover and paid-up capital.
Key Definitions
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Government Company
- At least 51% of the capital is held by the government.
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Private Company
- Limits membership to 200, restricts transferability of shares, and does not invite public subscriptions or deposits.
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Public Company
- Any company not classified as a private company, requiring at least seven members for incorporation.
Additional Concepts
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Perpetual Succession
- The continued existence of a company irrespective of the life of its members.
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Foreign Company
- Incorporated outside India while conducting business in India.
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Corporate Veil
- The distinction between the company as a legal entity and its shareholders, protecting members from personal liability.
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Description
This quiz explores the concept of body corporate as defined in the Companies Act, 2013. Learn about its characteristics, legal status, and distinctions from other entities like co-operative societies. Test your knowledge on this important aspect of corporate law.
