1

What is a Company?

Ans.

It is a voluntary association of persons formed for doing business. A company has a distinct name and limited liability.

2

What are the features of a company?

Ans.

1. Juristic person 
2. Has a separate legal entity 
3. Is capable of rights and duties of its own 
4. May have perpetual succession.

3

What are the basic laws regulating a company in India?

Ans.

Companies in India are governed by the Companies Act, 1956. Other acts also apply specifically. For example, companies have to also abide by the Income Tax Act, 1961, the Competition Act (As the replacing Act for M.R.T.P. Act), etc.

4

What are the fundamental documents to be filled for incorporation of a company?

Ans.

The following are the documents required to incorporate a company in India:
1. Memorandum of Association 
2. Article of Association
3. Prospectus or a Statement in lieu of Prospectus, as the case may be
4. Consent letters from the Directors of the company
5. Power of Attorney for the witnesses
6. A number of duly filled forms as required by the Ministry of Corporate Affairs

5

What is compulsory winding up/closure?

Ans.

Compulsory Winding up is when
1. Company passes a special resolution to that effect
2. It is a result of a statutory default
3. It is unable to pay its debts.
4. The Company law tribunal is of the opinion that the company should be wound up
5. The company has been defined as a ‘Sick Company’ beyond the scope of rehabilitation as defined under the SICA 
6. The company has acted against the interests of the sovereignty and integrity of India, the security of the State, friendly relations with foreign States, public order, decency or morality.

6

What is voluntary winding up/closure?

Ans.

Voluntary winding up is by:
1. Passing an ordinary resolution in the general meeting if: - (i) the period fixed for the duration of the company by the articles has expired; or (ii) some event on the happening of which company is to be dissolved, has happened.
2. Passing a special resolution to wind up voluntarily for any reason whatsoever.

7

Is registration of a company’s documents compulsory?

Ans.

Yes, all the company’s documents are required to be registered with the Registrar of Companies.

8

Is stamp duty levied on a company’s documents?

Ans.

Yes. The Memorandum of Association attracts a fixed stamp duty. The stamp duty on Article of Association is paid on ad valorem basis on the authorized capital of the company. The Prospectus or Statement in lieu of Prospectus is exempted from stamp duty requirement. However, Companies incorporated under the Section 25 of the Companies Act, does not attract stamp duty on Memorandum of Association and Articles of Association.