CS Executive:Setting Up & Closure [Ch-4 Legal Status of Companies]

Types of co. 

• Pvt. Co. 
• Public co.  
• One Person Company 
• Corporate personality 
• Ltd. Liability 
• Perpetual succession 
• Separate property 
• Share transfer-ability 
• Capacity to sue/be sued 

SMALL CO.

•  

  Paid-up doesn't exceed 50 lakhs  or such higher amt. not more than 10 cr. 
• Turnover= preceding year doesn't exceed 2 cr. Or such higher amt. not more than 100 cr. 
• Nothing applicable to : holding/subsidiary, section 8 co., co./body corporate governed by special act. 

• Advantages 

• Annual return filing 
• BM: only 2 in a year 
• No CFS 
• No auditor's rotation 

HOLDING CO.

• Control composition of BOD 
• Exercises/control more than half voting power indivually or otherwise. 
• CFS and separate financial statements of holding co. 
• Specific disclosures for investments in subsidiaries. 

SUBSIDIARY

• (2[87]) 

  No. co. other than [sub-rule 2, of co rules, 2017] shall have more than 2 layers. 
• Subsidy of govt. co. called govt. co. 
• Treated as related party 
• Associate co. not a subsidiary 
• If investor co. is subsidiary,can have more than 2 layers for any regulation. 

ASSOCIATE CO.

• Significant influence: at least 20 % of voting but less then 50%. 
• Considered as related party 
• CFS includes statements of assct. Co. (129)  
• Promoter/relative/relative of KMp with assct. Co. can't be independent directors (149[6]) 
• Non-cash transactions with assct. Require OR. 

INACTIVE/DORMANT CO.

• Inactive co. obtains the "dormant co." status. 
• MSC-1 for obtaining status. 
• MSC-2 certificate allowing status of dormant co. 
• Statements in MSC-3 within 30 days 
• MSC-4 change to active co. 
• MSC-5 status of active co. 
• Co. remains dormant for 5 consecutive years, registrar initiates striking-off process. 
• Rotation of auditors inapplicable 
• APPROVAL of shareholders : 3/4th 
• Listed co. ineligible 

GOVT. CO. [2(45)] 

• "state" and "ltd." in name 
• [56(1)] and (89,90) not applicable 
• AGM (96[2]) applicable 
• No director's consent if allotted by CG/SG. 

• Auditor provisions 

• Appointment of first auditor by C & AG within 60 days from registration. 
• Failed, BOD shall appoint within next 30 days. 
• Hold office until first AGM. 
• Supplementary audit on auditor's report by C & AG.