Q: What is the Companies Act? A: The Companies Act is a legal framework that governs the incorporation, functioning, management, and dissolution of companies in India.
Q: What is the purpose of the Companies Act? A: The Companies Act aims to regulate the corporate sector, protect investors’ interests, promote corporate governance, and ensure transparency in business operations.
Q: What is the minimum number of members required to form a private company? A: Two or more individuals are required to form a private company, and the maximum number of members in a private company is limited to 200.
Q: How many members are required to form a public company? A: A minimum of seven individuals is required to form a public company.
Q: Can a minor become a member of a company? A: No, a minor (a person below the age of 18 years) cannot become a member of a company.
Q: What is the minimum capital required to start a private limited company? A: There is no minimum capital requirement to start a private limited company in India after the amendment in 2015.
Q: Can a company commence business immediately after incorporation? A: No, a company must obtain a Certificate of Commencement of Business before starting its operations, which requires fulfilling certain conditions.
Q: What is the maximum number of directors allowed in a public company? A: A public company can have a maximum of 15 directors, but this limit can be increased by passing a special resolution.
Q: What is the process for changing the registered office address of a company? A: To change the registered office address, the company must follow the prescribed procedure and obtain approval from the Registrar of Companies (ROC).
Q: What are the penalties for non-compliance with the Companies Act provisions? A: Penalties for non-compliance vary depending on the nature and severity of the offense and can include fines, imprisonment, or both.
Q: Can a director be removed before the expiry of their term? A: Yes, a director can be removed by shareholders through an ordinary resolution before the expiry of their term.
Q: Can a director be remunerated for their services? A: Yes, directors can receive remuneration for their services as per the provisions of the Companies Act, subject to certain limits and approvals.
Q: Can a private company accept deposits from the public? A: No, private companies are not allowed to accept deposits from the public.
Q: Can a company have more than one auditor? A: Yes, a company can have multiple auditors, but they must be appointed at the Annual General Meeting (AGM).
Q: What is the minimum number of board meetings a company must hold in a year? A: A company must hold a minimum of four board meetings in a year, with at least one meeting in each quarter.
Q: What is the maximum interval between two board meetings? A: The maximum gap between two consecutive board meetings should not exceed 120 days.
Q: Can a company issue different classes of shares? A: Yes, a company can issue different classes of shares, such as equity shares and preference shares, each having distinct rights and privileges.
Q: What is the minimum number of members required to call an Extraordinary General Meeting (EGM)? A: Members representing at least 10% of the total voting power can call for an EGM.
Q: Can a company own shares in another company? A: Yes, a company can own shares in another company, and such shares are considered as investments.
Q: What is the process of winding up a company? A: Winding up a company can be either voluntary or by an order of the court, and it involves settling all debts and distributing assets to the stakeholders.
Q: Can a private company offer shares to the public through an Initial Public Offering (IPO)? A: No, private companies cannot directly offer shares to the public through an IPO.
Q: What is the minimum number of directors required for a private company? A: A private company must have a minimum of two directors.
Q: Can a company buy back its shares from the market? A: Yes, a company can buy back its shares, but there are certain conditions and procedures to be followed as per the Companies Act.
Q: Can a company change its name after incorporation? A: Yes, a company can change its name after following the necessary procedures and obtaining approval from the ROC.
Q: Is it mandatory for a company to appoint an internal auditor? A: The appointment of an internal auditor is mandatory for certain classes of companies, as prescribed in the Companies Act.
Q: Can a private company become a public company? A: Yes, a private company can be converted into a public company by following the prescribed procedures and meeting the necessary requirements.
Q: What is the penalty for non-filing of the Annual Return and Financial Statements? A: The penalty for non-filing of the Annual Return and Financial Statements can be substantial and may lead to additional compliance obligations.
Q: Can a company have a foreign national as a director? A: Yes, a company can have a foreign national as a director, subject to certain conditions.
Q: Can a company have a corporate entity as a member? A: Yes, a company can have another company as its member.
Q: What is the process for alteration of the Memorandum of Association? A: The alteration of the Memorandum of Association requires passing a special resolution and obtaining approval from the ROC.
Q: Can a company issue bonus shares to its shareholders? A: Yes, a company can issue bonus shares to its existing shareholders, subject to the availability of sufficient reserves.
Q: Is it mandatory for a private company to appoint an independent director? A: No, a private company is not required to appoint an independent director unless it meets certain specified criteria.
Q: Can a company have a managing director and a whole-time director simultaneously? A: Yes, a company can have both a managing director and a whole-time director, and their roles and responsibilities must be clearly defined.
Q: What is the role of the National Company Law Tribunal (NCLT) under the Companies Act? A: The NCLT is responsible for adjudicating corporate disputes and matters related to the Companies Act.
Q: Can a person be a director in multiple companies simultaneously? A: Yes, a person can be a director in multiple companies, subject to certain restrictions imposed by the Companies Act.
Q: Can a company alter its objects clause in the Memorandum of Association? A: Yes, a company can alter its objects clause by following the prescribed procedures and obtaining approval from the ROC.
Q: Can a director be held personally liable for the debts of the company? A: Generally, directors are not personally liable for the debts of the company, except in cases of fraud or certain specific circumstances.
Q: Can a company accept loans from its directors? A: Yes, a company can accept loans from its directors, but there are restrictions and compliance requirements.
Q: Can a private company issue debentures to the public? A: No, private companies are not allowed to issue debentures to the public.
Q: What is the minimum number of members required for the incorporation of a One Person Company (OPC)? A: A One Person Company can be incorporated with a single member.
Q: Can a company have a person as both a director and a company secretary? A: Yes, a person can hold dual roles as a director and a company secretary, subject to certain conditions.
Q: Is it mandatory for a private company to hold an Annual General Meeting (AGM)? A: Yes, every company, including a private company, is required to hold an AGM within a specified period after the end of the financial year.
Q: Can a director be appointed without the consent of the individual? A: No, a person can only be appointed as a director with their consent.
Q: Can a company accept deposits from its members? A: Yes, a company can accept deposits from its members, subject to certain conditions and compliance requirements.
Q: What is the role of the Registrar of Companies (ROC)? A: The ROC is responsible for administering and regulating the companies registered in a particular state or union territory.
Q: Can a company issue shares at a discount? A: No, a company cannot issue shares at a discount, except in certain specific cases allowed by the Companies Act.
Q: Can a company have different financial years than the standard April to March period? A: Yes, a company can choose a different financial year, but it must be within the allowed range of 12 months.
Q: Can a company convert its shares into stock? A: Yes, a company can convert its shares into stock, and it can also reconvert stock into shares if desired.
Q: Can a company change its Articles of Association? A: Yes, a company can change its Articles of Association, subject to the provisions of the Companies Act.
Q: Can a person be a director in more than one One Person Company (OPC)? A: No, a person can be a director in only one OPC at a time.
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