Companies Act, 2013

Section 3(1) of the Companies Act, 2013, outlines the formation of a company, including the specific provision for the formation of a One Person Company (OPC).

A dormant company under the Companies Act, 2013, is one that has been formed for a future project, has no significant accounting transactions, or is inactive. Therefore, all these descriptions apply.

A small company is defined by its paid-up capital and turnover thresholds and is specifically a private company, meaning it is other than a public company.

Section 2(62) of the Companies Act, 2013, provides the definition and provisions related to a One Person Company (OPC).

Under the Companies Act, 2013, the maximum number of members for a private company is 200, excluding past and present employee members.

Perpetual succession is a fundamental characteristic of a company, meaning the company continues to exist regardless of changes in its membership.

Companies with a large number of members (typically 200 or more) are often required to maintain records in electronic form under the Companies Act, 2013.

The Companies Act, 2013, applies to the whole of India.

Secretarial Audit is mandatory for listed companies and certain public companies based on paid-up capital or turnover thresholds.

A company has a separate corporate personality, which is a legal characteristic. It does not have limited profit (profit is unlimited) and it has perpetual succession, not limited succession.

A company is a separate legal entity with the capacity to sue and be sued, limited liability for members, and traditionally used a common seal (now optional).

Fraud involves a false representation of fact made with the intent to deceive, whereas opinions or intentions do not generally constitute fraud in a legal sense.

Perpetual succession means that the existence of the company is independent of its members; they may come and go, but the company remains.

Incorporation creates a separate legal entity, which allows the company to own property in its own name, distinct from its members.

Under the Companies Act, 2013, a private company that is a subsidiary of a public company is deemed to be a public company.

Section 2(20) of the Companies Act, 2013 defines company to mean a company incorporated under the Companies Act, 2013 or under any previous company law. This broad definition ensures continuity for existing companies while accommodating new incorporations.

Limited liability is a key advantage of incorporation. Limited personality and limited succession are not correct terms; the company has a separate legal personality and perpetual succession.

The maximum number of members for a private company under the Companies Act, 2013, is 200.

A Hindu Undivided Family (HUF) consists of members who are related by blood, making them homogeneous in nature compared to the diverse membership of a company or partnership.

A private company must have at least two members to be incorporated.

The Companies Act requires that the annual audit of a company's accounts be conducted by a Chartered Accountant.

A society registered under the Societies Registration Act is generally not considered a 'body corporate' in the same sense as a company incorporated under the Companies Act.

A company is generally formed by diverse individuals (heterogeneous), whereas a Hindu Undivided Family (HUF) is composed of family members sharing a common lineage (homogeneous). This distinction highlights the difference between a voluntary association of persons and a family-based business structure.

Section 2(1)(c) of the Company Secretaries Act, 1980 defines the term 'Company Secretary' as a person who is a member of the Institute of Company Secretaries of India (ICSI) and is appointed by a company to perform the functions of a company secretary.

Under the Companies Act, 2013, a company limited by liability can be either limited by shares or limited by guarantee. Both are valid forms of incorporation.

Section 409 of the Companies Act. 2013 talks about the appointment of the members of the National Company Law Tribunal. As per clause (3) of the section the qualifications of being the technical member of the tribunal includes a person  who—

• has, for at least fifteen years been a member of the Indian Corporate Law Service or Indian Legal Service out of which at least three years shall be in the pay scale of Joint Secretary to the Government of India or equivalent or above in that service; or
  
• is, or has been, in practice as a chartered accountant for at least fifteen years; or
  
• is, or has been, in practice as a cost accountant for at least fifteen years; or 
  
• is, or has been, in practice as a company secretary for at least fifteen years; or
  
• is a person of proven ability, integrity and standing having special knowledge and experience, of not less than fifteen years, in law, industrial finance, industrial management or administration, industrial reconstruction, investment, accountancy, labour matters, or such other disciplines related to
  
• management, conduct of affairs, revival, rehabilitation and winding up of companies; or
  
• is, or has been, for at least five years, a presiding officer of a Labour Court, Tribunal or National Tribunal constituted under the Industrial Disputes Act, 1947.
  

Section 275 of the Companies Act 2013 talks about the appointment of the Company liquidators in case of winding up. As per clause (2) of the section, the provisional liquidator or the Company Liquidator, shall be appointed from a panel maintained by the Central Government consisting of the names of chartered accountants, advocates, company secretaries, cost accountants or firms or bodies corporate having such chartered accountants, advocates, company secretaries, cost accountants and such other professionals as may be notified by the Central Government or from a firm or a body corporate of persons having a combination of such professionals as may be prescribed and having at least ten years’ experience in company matters.

Secretarial Audit is a process of verification of compliance with the provisions of various laws and rules by a company. It is essentially a compliance audit performed by a practicing company secretary.

Rule 8 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 mandates that every listed company and every other public company having a paid-up share capital of Rs. 10 Crore or more must appoint whole-time key managerial personnel.

As per rule 9 of the Companies (Incorporation ) Rules, 2014, an application for the reservation of a name shall be made in Form No. INC.1 along with the fee as provided in the Companies (Registration offices and fees) Rules, 2014. 

• As per Section 2 (24) of Companies Act, 2013, Company Secretary or Secretary means a Company Secretary as defined in clause (c) of sub-section (1) of section 2 of the Company Secretaries Act, 1980 who is appointed by a company to perform the functions of a Company Secretary under this Act. As per Company Secretaries Act, 1980 “Company Secretary” means a person who is a member of the Institute of Company Secretaries of India.
• Following Companies need to appoint whole time company secretary :

According to the Companies Act, 2013, a public company must have at least 3 directors, while a private company must have at least 2 directors.

As per rule 9 of the Companies (Incorporation ) Rules, 2014, an application for the reservation of a name shall be made in Form No. INC.1 along with the fee as provided in the Companies (Registration offices and fees) Rules, 2014. 

A small company is defined under Section 2(85) as a company other than a public company, with a paid-up share capital not exceeding Rs. 50 Lakhs (or higher prescribed limit) and a turnover not exceeding Rs. 2 Crores (or higher prescribed limit).

As per Section 2(62) of the Company’s Act 2013, a company can be formed with just 1 Director and 1 member which is known as One Person Company. It is a form of a company where the compliance requirements are lesser than that of a private company. Only a natural person who is an Indian citizen and resident in India shall be eligible to incorporate and act as a member and nominee of an OPC. For the above purpose, the term "resident in India" means a person who has stayed in India for a period of not less than one hundred and eighty two days during the immediately preceding one financial year.

Only a natural person who is an Indian citizen and resident in India shall be eligible to act as a member and nominee of an OPC. For the above purpose, the term "resident in India" means a person who has stayed in India for a period of not less than one hundred and eighty two days during the immediately preceding one financial year.

 A Certificate of Incorporation ( is a legal document that is issued by Ministry of Corporate Affairs once a company is successfully registered with them. The Certificate  Of Incorporation is a proof that the company is now registered with the Registrar of Companies. According to Rule 36(13) of the Companies Incorporation Rules, 2014, the certificate of incorporation shall be issued by the Registrar in Form No. INC-11.

A partnership firm is not a legal person and cannot be a member of a company. However, since a Section 8 company is a company, the general rule applies that a partnership firm cannot be a member in its own name.

Section 2(69) defines a promoter as a person who has been named in the prospectus, has control over the affairs of the company, or on whose advice the Board is accustomed to act. Professional capacity (IV) is explicitly excluded from the definition.

Under the Companies (Incorporation) Rules, 2014, Form INC-2 was used for One Person Company (OPC) incorporation, while Form INC-7 was used for other companies (though these forms have since been updated/replaced in practice, this reflects the historical context of the question).

Non-current investments are those held for a period exceeding 12 months. Mutual funds, government securities, and bonds can all be classified as non-current investments depending on the company's intent and holding period.

The Companies Act, 2013 aims to promote transparency, accountability, and good governance. While profitability is a goal of the business itself, it is not an explicit legislative object of the Act.

LIC is one of the financial institutions to be established in India after independence. The full form of LIC is life insurance corporation and it was established in 1956. The main aim behind the establishment was to spread the message of life insurance in the country. Also, it was required to mobilize people's savings.

Corporate governance is widely recognized as a culture and mindset that goes beyond mere legal compliance. Legislation provides a framework, but effective governance requires ethical leadership.

The conversion of a private limited into an OPC (One Person Company) is allowed as per the Companies Act, 2013, which provides a mechanism to convert one class of company into another.That the annual turnover of the company must be less than Rs. 2 crores during the past three consecutive financial years.

Tangible assets are physical assets that have a material existence. Vehicles are physical items, whereas software, mining rights, and goodwill are intangible assets.

Section 203 of the Companies Act, 2013 explicitly lists the Company Secretary as a Key Managerial Personnel (KMP) for certain classes of companies.

Section 135 of the Companies Act, 2013 requires companies meeting certain criteria to spend at least 2 percent of their average net profits made during the three immediately preceding financial years on Corporate Social Responsibility (CSR) activities.

Secretary does not have a power to cast a vote. He/she is not included in the voting power in the board meeting. 

The Memorandum of Association (MOA) is the charter of the company and must contain the name, registered office, objects, liability, and capital clauses.

Common Seal is the official signature of the company and each company shall have only one seal, on its incorporation.

According to the Schedule III of the Companies Act, 2013, long-term borrowings like bonds should be disclosed in the notes to accounts in descending order of maturity or conversion.

Shareholders are the owners of a company because they hold the equity capital, which represents ownership interest in the entity.

A Hindu Undivided Family (HUF) business consists of members of the same family, making the membership homogeneous by definition.

The Companies Act, 2013 extends to the whole of India.

A company is a legal entity created through registration under the Companies Act or by a special Act of Parliament. The judiciary (High Court) does not have the power to create a company.

Companies were given a transition period to switch to the new format of the Register of Members as prescribed under the Companies Act, 2013. This period was set at 6 months from the commencement of the relevant rules.

Section 88 of the Companies Act, 2013 specifically mandates that every company must keep and maintain a register of members, debenture-holders, and other security holders.

Under Section 135 of the Companies Act, 2013, certain profit-making companies are required to spend at least 2% of their average net profits made during the three immediately preceding financial years on Corporate Social Responsibility (CSR) activities.

A partnership firm is a person in the eyes of the law and can become a member of a company, including a Section 8 company, provided it is registered as a partnership firm.

Section 8 of the Companies Act, 2013 deals with companies formed for charitable purposes, which are commonly referred to as Section 8 companies. This replaces the old Section 25 from the 1956 Act.

A Section 8 company must apply its profits to the promotion of its objects and is strictly prohibited from paying dividends to its members. Therefore, statement (ii) is incorrect, making (i) and (iii) the correct conditions.

According to Section 2(45) of the Companies Act, 2013, a Government company is one in which at least 51% of the paid-up share capital is held by the Central or State Government(s).

None of the listed items are correct characteristics of a company. Profits are not transferable in all companies (e.g., private companies), company property is not joint property of shareholders, and the common seal is now optional under the 2013 Act.

The landmark case of Salomon vs. Salomon & Co. Ltd. established the principle of separate legal entity, confirming that a company is distinct from its members.

In a company limited by guarantee, the liability of members is limited to the amount they have undertaken to contribute to the assets of the company in the event of its winding up.

Preference shares carry preferential rights regarding both the payment of a fixed dividend and the repayment of capital in the event of the company being wound up.

Because the company is a separate legal entity, the transfer of property from shareholders to the company is a transfer between two distinct legal persons, making the transaction subject to duty.

A company is defined as an artificial person created by law, having a separate entity, perpetual succession, and a common seal.

Similar to question 494150, a Section 8 company must apply its profits to its objects and cannot pay dividends. Thus, (i) and (iii) are the correct conditions for granting a license.

Under the Companies Act, 2013, the definition of 'Body Corporate' excludes co-operative societies registered under any law relating to co-operative societies and any other body corporate which the Central Government may notify.

As established in Section 2(45), a Government company requires at least 51% of the paid-up share capital to be held by the government.

The auditor of a Government company is appointed or reappointed by the Comptroller and Auditor General of India (CAG).

A company is a legal person capable of owning property in its own name, and members have no proprietary interest in the company's assets. Therefore, both statements are incorrect.

Section 8 of the Companies Act, 2013 allows associations not for profit to be registered without using the words 'Limited' or 'Private Limited' in their names.

The advantages of incorporation include corporate personality and the capacity to sue in its own name. 'Greater social responsibility' is not a standard legal advantage of incorporation, and a 'detailed winding-up procedure' is generally considered a disadvantage.

Under the Companies Act, 2013, the use of a common seal is now optional for a company.

Key Managerial Personnel (KMP) are the employees of a company who hold key positions in the company and greater responsibility of overall functioning of the company including the responsibility to protect the interest of the stakeholders. 

Secretarial Standards are the standards issued by the Institute of Company Secretaries of India constituted under the section 3 of the Company Secretaries Act 1980. Secretarial Standards provide clear view of the laws when the laws are not clear. These are approved by the Central Government. Secretarial Standards provide clarity to the laws which does not imply that these are alternatives to the original law. 

The first and foremost task in the direction of formation of company is the selection of a name to be given to the proposed company. Having decided to launch a company, the promoter has to select a name for it and submit an application to the registrar of companies of the state in which the registered office of the company is to be situated, for its approval. The proposed name may be approved if it is not considered undesirable. It may happen that another company exists with the same name or a very similar name or the preferred name is misleading, say, to suggest that the company is in a particular business when it is not accepted but some alternate name may be approved. Therefore, three names, in order of their priority are given in the application to the Registrar of Companies before formation of company.

Section 8 companies cannot pay dividends to members (making I incorrect) and can convert into other types of companies (making III incorrect). Statements (II) and (IV) are correct.

Section 205 of the Companies Act 2013 specifies the functions to be performed by the Company Secretary. These functions are:

OPC is one person company which has only one person as member and there is no prescribed capital. According to Section 92, every company has to prepare an annual return in the prescribed form containing the particulars as they appear in the financial statements. The annual return is to be signed by a director and company secretary, in case of normal company.

The case of Kelner vs. Baxter established that a company cannot ratify a contract entered into by promoters before the company's incorporation, as the company did not exist at the time of the contract.

Section 141 of the Companies Act, 2013 specifically deals with the eligibility, qualifications, and disqualifications of auditors. The other sections listed pertain to different aspects of company law.

As per the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, one of the primary duties of a Company Secretary is to ensure that the company complies with applicable secretarial standards. While the other options describe general responsibilities, this is the specific statutory duty defined in the rules.

The appointment of Auditors in a Company is Governed under Section 139 of the Companies Act. 

Section 139(6) of the Act,2013 says that, the first auditor of a company must be appointed by the BOD within 30 Days from the date of registration of the Company. In case of failure of the Board to appoint such auditor, the board shall inform the members of the company, who shall within ninety days at an Extra Ordinary General Meeting appoint the auditor

Section 141(3) disqualifies persons who hold security or interest in the company, but it provides an exception for relatives holding security of a face value not exceeding Rs. 1 lakh. An officer/employee or a person with significant indebtedness is explicitly disqualified.

For (I): Rs. 50,000 securities is below Rs. 1 lakh threshold - eligible. For (II): Partner's debt of Rs. 3,00,000 to subsidiary exceeds Rs. 5 lakh threshold - should be disqualifying, but this appears to be an error in the question. (III) Partner as GM in company disqualifies. (IV) Relative's guarantee for loan disqualifies. The question claims A is correct, but (II) should actually disqualify.

The Serious Fraud Investigation Office (SFIO)  is a fraud investigating agency in India under the jurisdiction of government of India. It  is a coordinating agency with Income Tax and CBI. 

Section 143(1) of the Companies Act, 2013 mandates that an auditor must inquire into whether loans and advances made by the company are properly secured and whether the terms are prejudicial to the interest of the company.

Rule 10 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 lists the duties of a Company Secretary, which include providing guidance to directors and representing the company before regulators. Formulating business strategies and calling meetings on his own are not statutory duties of the CS.

 The minutes of proceedings of each meeting shall be entered in the books maintained for that purpose along with the date of such entry within thirty days of the conclusion of the meeting.

Auditors have the right to sign the audit report, attend and speak at general meetings, and visit branch offices. They do not have the right to advise the company on financial policies, as this would compromise their independence.

An auditor can be an internal auditor who works as an employee of the organization, or an external auditor who operates as an independent professional. Hence, an auditor may function in either capacity.

As per the Companies Act, 2013, only a natural person who is an Indian citizen and resident in India can incorporate an OPC. Artificial persons, non-residents, and persons who already hold an OPC are ineligible.

Section 464 of the Companies Act, 2013 limits the number of persons in an association or partnership to 100, as prescribed by Rule 10 of the Companies (Miscellaneous) Rules, 2014.

Section 8 of the Companies Act, 2013 allows for the formation of companies with charitable objects, which can be licensed to omit the words 'Limited' or 'Private Limited' from their names.