Page 140 - DCOM404_CORPORATE_LEGAL_FRAMEWORK

Unit 7: Companies Act, 1956

Registered Company: A company brought into existence by registration of certain documents Notes
under the Companies Act, 1956 is called Registered Company.
Statutory Company: A company which is created by a special Act of the Legislature is called a
Statutory Company.

Unlimited Company: An unlimited company is a company not having any limit on the liability
of its members.

7.14 Self Assessment

Fill in the blanks:
1. The ...................... contains the mechanism regarding organisational, fi nancial, and
managerial and all the relevant aspects of a company.
2. A company is created with the sanction of law and is not itself a human being, called
......................
3. Companies may be formed with ...................... of members or members may guarantee a
particular amount.

4. A company being an artificial person cannot be ...................... by illness and it does not have

an allotted span of life.
5. ...................... provides that if it is necessary for the satisfactory completion of the
investigation into the affairs of a company, the Inspector appointed to investigate may
look into the affairs of another related company in the same management or group.
6. A pure ‘...................... does not have a share capital.

7. ...................... defines a Government Company as any company in which not less than 51%
of the paid-up share capital is held by the Central Government, or by any State Government
or Governments, or partly by the Central Government and partly by one or more State
Governments and includes a company which is a subsidiary of a Government Company.
8. The ...................... and Auditor General of India have the power to direct the manner in
which the accounts are to be audited and to give instructions to the auditor in regard to any
matter relating the performance of his functions.
9. ...................... provides that in case of any alteration in any of the above particulars, the
company has to file with the Registrar of Companies a return of such alteration within the

prescribed time.
10. ...................... makes the application of the provisions regarding books of account to be
kept.

7.15 Review Questions

1. Discuss the meaning of Companies Act, 1956.
2. What are the different advantages of company?

3. “In the case of a company limited by shares, the liability of members is limited to the
nominal value of shares held by them.” Comment
4. Discuss different types of companies. What are the differences between private and public
company?
5. Consider a public and a private company then compares it.

LOVELY PROFESSIONAL UNIVERSITY 135