CS Executive:Setting up & Closure [Ch-2 Companies]

• Types of companies 

• On incorporation
• Statutory co. : registered under an act of parliament. 
• Registered co. : registered under co. act 

• On liability 

• Unlimited companies 
• Co. limited by guarantee 
• Co. limited by shares 

• Other forms 

• Section 8 
• Govt. co. : any govt. holds 50% or more shares. 
• Foreign co. : co. incorporated outside India. 
• Holding/subsidiary co.  
• Associate/ joint venture co. 
• Investment co. 
• Producer co. 
• Nidhi co. 
• Dormant co. 
• NBFCs 
• Listed co. 

• Pvt. Co. 

1. Members:2-200 
2. 2 directors 
3. No paid-up capital 
4. INCORPORATION
1. Inc-32 (SPICe): reservation of name, allotment of DIN, incorporation, PAN/TAN, issuance of section 8 certificate. Direct approval without reservation of name. 
2. Apply for name approval 
1. Login to MCA. 
2. Details to be mentioned: entity type, CIN name, propsed name, comment, choose file, submission, fee payment, validity of name. 

1. Preparation of docs 

1. INC-9: declaration by first subscriber/director. 
2. DIR-2: declarations from first directors with identity/residential address copy. 
3. NOC from property owner. 
4. Office address proof, utility bills copy of 2 months or newer  
5. All subscribers have digital signature. 
2. Fill the form (INC-32) 
3. Maximum 3 DINs can be applied through a SPICE form. Incorporate with any 3 directors and appoint other directors after incorporation. 
4. Engagement letters from the promoters. 
5. Verification of all records. 
6. All docs are legibly attached, visit of the registered office,  

• PUBLIC CO. 

• The incorporation of public co. is similar to that of a private company and compliance of all statutory compliance. 

• OPC 

• Appointment of nominee by subscriber after receipt of consent. 
• Form SPICE INC-32 
• The financial statements (any) not include cash flows 
• Annual return can signed by CS (not in practice) or a director. 
• Need not conduct an AGM, nor make an AGM report. 
• 1 director is satisfactory. No independent directors needed. 
• Remuneration can be given exceeding 11%. 
• "one person co." mentioned. 

• NIDHI CO. 

• Accepting deposits and lending money to members (NBFC). 
• Nidhis don't engage in chit funds, hire-purchase,investment or trading. 
• NDH-4 with 60 days of incorporation, violation may lead to prevention from filing sh-7 and/or PAS-3.  

• INCORPORATION 

• Public co., paid up capital of 5 lakhs. 
• Shan't issue preference shares, if issued, redeemed accordingly. 
• "nidhi ltd." as part of the company. 
• No other object except from the prescribed. 

• REQUIREMENTS 

• Within 1 year from incorporation, (1.) 200 members or more, net-owned funds (NOF) of 10 lakhs or more, unencumbered term deposits of 10% or more, (4.) NOF:deposits = 1:20. 
• NOF means the paid-up capital + free reserves - accumulated losses- intangible assets. 
• Non-compliance with (1.) and (4.) above, then RD will be NDH-2. 
• Filing in a return in NDH-1 within 90 days of it's financial year. 

• Restrictions and Prohibitions: 

• Open current a/c with its members. 
• Acquire any other business. 
• Pledge any assets lodged by its members for security. 
• Enter into a partnership agreement. 
• Issue fully paid equity shares of nominal value of ten rupees or less. Allot a minimum of ten shares or shares equivalent to 100 rupees. A savings a/c or a recurring deposit holder shall hold at least one share of 10 rupees. 
• Any FD from 6 months to 60 months. 
• Max. balance in a savings a/c may be 1 lakh or less (including interest) and Return On Investment not more than 2%. 
• Investment in unencumbered term deposits be 10% or more on o/s deposits on the last day of second-last month. 

• LOANS 

• 2 lakhs	Total from members: 2 crores or less
  7.5 lakhs	2 crores-20 crores
  12 lakhs	20 crores-50 crores
  15 lakhs	More than 50 crores

• No loans unless profits in preceding 3 FY years. 
• Rate of interest on a loan not more than 7 and a half %. 
• 10 year tenure of a director, re-appointment eligibility after 2 years. 
• Dividend not more than 25%. 
• Half-yearly return NDH-3. 

• PRODUCER CO. 

• Members are primary producers. 

• Objects of producer companies: 

• Production,harvesting, procurement, grading, pooling, handling, marketing, selling, export of primary produce,. 
• processing 
• manufacturing 
• Providing education & insurance of producers 

• FOREIGN CO. 

• File with the registrar within 30 days: 

  Certified charter copy, status or memorandum/articles.  
• registered address 
• Details of director, secretary. 
• Opening and closing of a place of business in India. 
• No conviction of any KMPs 

• Sections applicable 
  

1. 382, 381, 375-379, 71 (debentures), 92 (filing annual return), 135 (CSR), 128 (books and accounts in principal place), 209A (a/c inspection), 233A (special audit), 233B (audit of cost a/c), 234-46 (investigations).  

• BRANCH OFFICE (BO) 
• 
  
• Permission to set up BO taken from RBI under FEMA,1999 provisions. 
  
• RBI ROUTE: 100% FDI permissible, GOVT. ROUTE : 100% FD not permissible. 
• Track record of profit in preceding 5 FYs. 
• Paid-up capital+ free reserves- intangible assets, net worth of 100,000 usd or more. 
• Not allowed to undertake retail trading, manufacturing and/or producing activities. 
• Special permission for BOs in Special Economic Zones. 
• Certain docs to registrar within 30 days. Section 380 co. act, 2013.