Bhagya

By going through these Maharashtra State Board Secretarial Practice 11th Commerce Notes Chapter 5 Members of a Company students can recall all the concepts quickly.

Maharashtra State Board Class 11 Secretarial Practice Notes Chapter 5 Members of a Company

Meaning of Member-

• Member means a person whose name is entered in the Register of Members of Company and also includes holder of equity shares as per the records of Depository.
• Two pre requisites for person to be a member.
  • agreement in writing to take shares of company.
  • registration of the person so agreeing in Register of Members of the Company.

Member v/s Shareholder-

(i) Member without being a shareholder

• Signatories to the Memorandum of Association
• Company Limited by Guarantee Amount
• Membership by Acquiescence / Estoppel
• Transfer of shares
• On death of a Member / By Succession / Transmission of shares
• On Insolvency of a Member.

(ii) Shareholder without being a Member

• The transferee (Buyer of the Shares)
• Official Receiver in case of insolvency, Legal heir in case of death

Eligibility Of Membership-

1. Cannot be a Member-
I. Individual

• Minor himself
• Insolvent
• Insane

II. Organisation:

• Partnership firm
• Hindu Undivided Family (HUF)

Can be a Member

I. Individual

• Foreigner
• Karta of HUF / partners
• Individual partners

II. Organisation:

• Company
• Co-operative Society
• Limited Liability Partnership (LPP)
• Registered trust

Acquisition of Membership (One can become member of the company).

• By subscribing to the Memorandum
• By application and allotment of shares
• By holding Shares in Dematerialized form
• By transfer
• By transmission of shares
• Nominee of One Person Company (OPC)
• By Acquiescence

Cessation / Termination of Membership (A person ceases to be the member of company)

• Transfer of Shares
• Death or insolvency of a member
• Sale of Shares by the member in buy back offer
• Forfeiture of Shares
• Surrender of Shares to company
• Exercising of lien over the Shares of a member
• Redeemable Preference Shareholders on redemption of Preference Shares
• Person who rescinds(cancel) the contract of membership on the ground, he/she was cheated
• Winding up of the company

Rights of a Member-

(1) Rights of accessing Books and Documents:

• To get copies of Memorandum and Articles of Association, Auditor’s and Directors reports, Balance Sheet, Profit and Loss account.
• To inspect Register of Members, Debenture-holders, etc.

(2) Right to make Fundamental Corporate Decision:

• Change of Registered office of Company
• Increase in Authorized Capital
• Change of objects of the company
• Amend Articles of Association
• Acquisitions, Mergers and Takeovers
• Appointing Sole – Selling agents
• Winding up of the Company

(3) Right to Participate in General Meetings:

• To receive the notice and agenda of all general meetings
• To appoint proxy, vote at meetings
• To call Extra Ordinary General meeting, etc.

(4) Right to appoint and remove a Director

(5) Right with respect to Company’s accounts and its audit:

• To approve the annual accounts at the Annual General Meeting
• To appoint auditors
• To remove auditors

(6) Right to Participate in Profits of the company:
To approve dividend and get the same within 30 days of its declaration

(7) Shareholding Rights:
To receive share certificate, transfer of shares, Rights Issue and Bonus Issue of shares

(8) Right to receive Surplus Assets:
To get share in surplus assets of company (if any), in event of liquidation of company

(9) Right to Class Action Suit:

• against company or its directors
• in the event of any fraudulent, unlawful or wrongful act or omission
• misleading statements in the audit report

Duties and Liabilities of a Member-

• to abide all the contents of Articles of Association.
• to pay full value of shares issued.
• liable for all debts of the Company (Unlimited Liability Company).

Word Meaning:

eligibility – necessary requirements; acquisition – to obtain; cessation – to end; depository – institution where shares are held in electronic form; interchangeable – similar; acquiescence – agreement; estoppel – by any previous law; misrepresents – giving a false details; refuting – rejection; succession – in continuation; deceased – death; transmission – to pass on; insolvency – financially loss incurred by individual or company(liabilities more then assets); sui-juris – legally capable; insane/lunatic – mental imbalance; render – to provide / to give; dematerialized – convert shares from physical form to electronic form ; insanity – mentally ill; administrator – a person who carries out administers or manage the business; forfeiture – to cancel; redeemable – to repay; rescinds – to cancel; fundamental – basic; fradulent – cheating; tribunal – a body formed to solve disputes; redress – to solve; acquired – to obtain; conferred – to give; convenants – contents; accumulated – collected; transferee – a person on whose name the shares are transferred.

By going through these Maharashtra State Board Secretarial Practice 11th Commerce Notes Chapter 4 Documents Related to Formation of a Company students can recall all the concepts quickly.

Maharashtra State Board Class 11 Secretarial Practice Notes Chapter 4 Documents Related to Formation of a Company

Documents Required For Incorporation Of A Company-

1. Memorandum of Association
2. Articles of Association

1. Memorandum of Association:

Definition : “MOA of a company as originally framed or as altered from time to time in pursuance of any provision of any previous Company Law or of this Act.”
(Section 2 (56) — Companies Act, 2013)

Meaning :

• Primary document of a company states its aims and objectives
• Describes relationship between the company and outsiders
• Prepared by the promoters

Signed by:

• 7 persons – Public Company,
• 2 persons – Private Company
• 1 person – One Person Company

Clauses :

• Name Clause
• Address Clause
• Object Clause
• Liability Clause
• Capital Clause
• Association Clause

2. Articles of Association:

Definition : “Articles of Association as originally framed or as altered from time to time in pursuance of any previous Company Law or of this Act.”
(Section 2 (56) — Companies Act, 2013)

Meaning :

• Subordinate document to MOA
• It is like Bye-laws of the company
• Describes powers, rights and duties of Board of Directors
• Describes relationship between the company and its members and also between members.

Contains :
Rules and regulation for internal management of the Company

Clauses of MOA-

• Name Clause
• Subscription Clause
• Address Clause
• Capital Clause
• Liability Clause
• Object Clause

→ Any Act done beyond the power of MOA is called as “Ultra-Vires” i.e. invalid.

Entrenchment of Articles:

Articles (Provisions) which cannot be altered by passing only a special resolution is called Entrenchment of Articles. It requires 9/10th of the majority to alter the provision.

Doctrine of Indoor Management:

It protects the interest of the outsiders, who enters into contract assuming that the company follows all procedures as per MOA and AOA.

Prospectus:

Contents of Prospectus-

1. Declaration by Company:

Stating-

• all provisions of Companies Act, 2013 is complied
• it does not contain anything contrary to provisions of Companies Act, 2013, Securities Contracts Act, 1956 and SEBI Act, 1992

2. Statement of an Expert:

Statement by –
Company Secretary, Chartered Accountant, Cost Accountant, Valuer,Engineer, etc.

3. Information and Reports:

• name of the issuing company
• registered office address
• number and price of share
• lead merchant banker
• registrar to the issue
• date of opening and closing of issue, etc.

Statutory Requirements For Prospectus-

• Drafting prospectus with SEBI and making available to the Public and Stock Exchange
• Signed by all Directors or authorized attorney
• Registration of Prospectus with ROC
• Issuing prospectus to Public within 90 days from the date of registration
• Dating of Prospectus

→ Mis-statement in Prospectus means untrue or misleading information given in the prospectus.

Liability In Case of Mis-Statement in Prospectus –

1. Civil n Liability:
   To pay compensation for loss suffered by investor
2. Criminal Liability:
   Company or its officers to be fined or imprisoned or both

Word Meaning:

distinction – difference; altered – changed; pursuance – effect of; privileges – benefits; subscriber – member; ultra-vires – act done beyond the legal power; distinct – well defined in existence; constitute – found; emblems – symbol; resemble – same / similar; incorporation – the process of registering a company; domicile – location; immoral – dishonest; contravention – violation / against; incidental – happening by chance; consequential – resulting / thereafter; null and void – not legally considered to be existed; injunction – order; doctrine – set of beliefs; contractual – legal agreement between company and member; authorised – permitted; desirous – intention / need; subordinate – secondary / next to; establishes – builds; arbitration – to settle disputes by negotiation; indemnity – protection; entrenched – unlike to change; elaborate – detailed; accordance – following; proceedings – course of action / steps; disclosures – declaration; abridged – short writing material; prospectus – a printed booklet giving information about company; attorney – legal practitioner; imprisonment – behind the bars / jailed; furtherance – assisting /assistance; mis-statements – wrong information / words; red

By going through these Maharashtra State Board Secretarial Practice 11th Commerce Notes Chapter 12 Correspondence with Statutory Authorities students can recall all the concepts quickly.

Maharashtra State Board Class 11 Secretarial Practice Notes Chapter 12 Correspondence with Statutory Authorities

Ministry of Corporate Affairs (MCA)-

• Powers delegated by Central Government to regulate
• the functioning of the Corporate sector to MCA.
• MCA mainly concerned with

Administration of the following Acts-

• The Companies Act, 2013
• The Partnership Act, 1932
• The Limited Liability Partnership Act, 2008
• The Competition Act, 2002
• Societies Registration Act, 1860

Supervision of Professional Bodies like-

• Institute of Chartered Accountant of India (ICAI)
• Institute of Company Secretaries of India (ICSI)
• Institute of Cost Accountants of India

Objectives of MCA

• To administer provisions and other allied laws of Companies Act. 2O13
• To offer various services to the stakeholders
• T0 identify non-compliance of Companies Act
• To make corporate data available to public
• To encourage companies to improve Porate Governance and adopt responsible business practices
• To promote fair competition

Organizational set up to administer the Companies Act, 2013:

• Ministry of Corporate Affairs (Head Quarters in New Delhi)
• 7 Regional Directors (Incharge of 7 regions in India) (Ahmedabad, Chennai, Hyderabad,
• Kolkata, Mumbai, New Delhi, Shillong)
• 22 Registrars of Companies
• 1 Central Registration Center
• 9 ROCs-cum- Official Liquidators
• Official Liquidators (Officers appointed by High Courts to assist in procedure of winding up of companies)

Registrar of Companies (ROC’s)-

• Appointed by Central Government
• To administer the Companies Act in the State under its jurisdiction
• To look after Registration of Companies falling under its jurisdiction
• Acts as full time field officers with wide powers and responsibilities

Duties of ROC’s-

• To examine document filed by companies
• To order a company to rectify defective or incomplete document
• To take decisions on document filed within 30 days of filing
• To provide company with copy of document filed on payment of prescribed fees

Powers of ROC’s-

• To extend the time of holding Annual General Meeting, by a period not more than 3 months.
• To inspect or call for books of accounts, other books and papers.
• To seek in writing an information or explanation relating to furnished.
• To get Special Court permission to is sue an order for seizure of books and papers of a Company, if  such records are to be destroyed, altered or falsified.
• To strike off or remove the name of a company from the Register.

National Company Law Tribunal (NCLT)-

Power of (NCLT)-

• To hear and give decisions on proceedings related to compromise, arrangement and reconstruction of a company.
• To hear and give decision on winding up petitions.
• To hear and give decisions on petition for extension of time for repayment of deposits.
• To make call for holding AGM or EOGM of a company
• To direct company to not dispose off funds of a company and to freeze the assets of a company used against the interest of the company.
• To hear and give decisions on grievances of rejection in transferring shares and securities
• To hear and give decisions on grievances of rejection in transferring shares and securities.

National Company Law Appellate Tribunal (NCLAT)-

• Set by Central Government in June, 2016.
• To hear appeals against the orders of NCLT / National Financing Reporting Agency.
• To hear appeals against the order passed by Insolvency and Bankruptcy Board of India.

Structure of National Company Law Appellate Tribunal-

Chairperson (Head):
Maximum 11 Members:

• Judicial members
• Technical members

Operation of NCLAT

• Any person aggrieved by an order of the Tribunal, may within 45 days from the date of order may file an appeal to NCLAT.
• NCLAT may confirm, modify or set aside the order.
• An appeal against the NCLAT order may be filed to Supreme Court within 60 days from date of receipt of NCLAT order.

Securities and Exchange Board of India (SEBI)-

• Statutory body
• Head office – Mumb
• Established in 1992

Objectives of SEBI-

• To regulate the functioning of securities markets and Stock Exchanges in India.
• To protect investors and safeguard their rights.
• To regulate the market intermediaries.
• To develop a code of conduct for fair practices for market intermediaries.

Precautions to be taken by Secretary while Corresponding with Statutory Authorities:

• Prompt Reply
• Legal aspects
• Clarity
• Brevity
• Courtesy

Word Meaning:

allied – joined / connected; fair – honest; stakeholder – a person having an interest in the business; liquidators – a person appoint to wind up the affairs of company; defective – wrong; prescribed -to advise; vested – given; delegated – to give responsibility of certain work; furnish – to provide; alter- to change; falsified – to alter wrong information; quasi – partly; jurisdiction – official power to make legal judgments or decisions; seizure – to take back; empowered – power to do something; oppression – ill treatment; dispose off – give it away; freeze – temporary stopping the rights; grievances – problems; rejection – to not approve; appeal – to request; bankruptcy – failure to run the business; aggrieved – a person who does not accepts the order passed by lower jurisdiction body; safeguard – to protect; code of conduct – set of rules; intermediaries – middle person to do certain work / agent; explicit – to state clearly; calamity – sudden damage; portal – a website; instances – example; challan – form to filled to pay taxes; petition – a formal written request; default – failure to pay; regulator – a person / organization supervise certain activity.

By going through these Maharashtra State Board Class 11 Political Science Notes Chapter 4 Constitutional Government students can recall all the concepts quickly.

Maharashtra State Board Class 11 Political Science Notes Chapter 4 Constitutional Government

Introduction:
In this chapter, we will study the meaning of the Constitution and Constitutionalism. We will also study about Federation and compare the Parliamentary and Parliamentary system

Constitution:
Meaning: The constitution is the highest law of the country. It reflects the objectives of the State and the rights and aspirations of its citizens. It establishes the rule of law and sets limits on government authority. A constitution is a living document that indicates the way in which a country is governed. The primary function of the constitution is to lay out the basic structure of the government according to which the people are to be governed.

Components: A constitution has three distinct but interrelated components.

• Set of Rules – A Constitution is a set of rules that describes the structure, powers and functions of the three organs of government to ensure that each organ functions within its jurisdiction. It lays down the limitations on what the government can do or cannot do.
• Set of Rights- A constitution lists the rights and duties of citizens. It also lists the means of protecting the rights e.g., in India, the judiciary is entrusted with protecting fundamental rights. The rights guaranteed by the constitution are not unlimited i.e. they are subject to reasonable limitations or restrictions.
•  Set of Objectives and Values – A constitution enumerates the values and objectives that it seeks to fulfil for e.g., the Indian Constitution seeks to ensure the values of justice, liberty and equality.

Constitutionalism:
Constitutionalism refers to the idea that there should be limitations on the powers of the government which may be specified in the Constitution or may arise due to historical developments. The Magna Carta (Great Charter) (1215) and Bill of Rights (1689) in England were attempts to restrict the powers of the Monarchs.

As the concept of separation of legislative, executive, judicial powers became popular, so also, the idea of restricting powers of the government as a whole emerged. The origins of constitutionalism can be traced to the Social Contract Theory propounded by John Locke. He believed that people should have the right to change the government if it committed any wrongdoings.

The first ten amendments to the American Constitution (collectively called the Bill of Rights) imposed restrictions on the government. The Indian constitution also restricts government jurisdiction so that it doesn’t violate Fundamental Rights.

Any constitution is subject to amendments. Thus, it is possible that certain governments may use their amendment powers to remove restrictions on policies and actions.

In any democracy, constitutionalism refers to restrictions on the power of the government, adherence to the spirit of the constitution as well as ‘Constitutional Morality.

Types Of Constitutions:

1. Written Constitution – Most world constitutions are written and have been created by a specially appointed body e.g., Indian Constitution was framed by the Constituent Assembly. There is a single, written document that contains all necessary provisions.
2. Unwritten Constitution – In this case, some provisions are written while other provisions are governed by constitutional convention or precedents. There is no single written document. United Kingdom is the best example of an unwritten constitution.

Types Of Democratic Governments:
The two main types of democratic governments are Parliamentary System (as seen in the United Kingdom, India, Canada, Australia, Japan, etc.) and Presidential System (which exists in the U.S.A., Argentina, Mexico, Brazil, etc.). This distinction is based mainly on the nature of Legislature-Executive relationship.

Parliamentary System: It makes a distinction between Head of State (President of India) and Head of Government (Prime Minister and his Council of Ministers).

The main features of the parliamentary system are –

• There is a fusion of legislature and executives powers – The executive i.e., the Ministry is drawn from the legislature and is subordinate to it.
• There are two executives i.e., nominal executive (President of India or Monarch in England) and real executive (ministry). All powers are exercised by the real executive in the name of the nominal executive.
• It is a responsible government – The Prime Minister and the Council of Ministers stay in power only as long as they have the required majority in the Parliament. In case, the Ministry loses majority support, the Prime Minister has to resign along with the Council of Ministers.
• It may exist either as a Republic or as a Constitutional Monarchy depending on the nature of the powers of the nominal executive. In a Republic, the nominal executive is elected e.g., in India, while in a Monarchy, he/she assumes position on the basis of heredity e.g., in England.
• Most Parliamentary systems have a Bicameral Parliament for e.g., in England, Parliament consists of House of Commons (lower house-directly elected) and House of Lords (upper house-hereditary basis)

Presidential System: The main features of a Presidential system are –

• The President who is directly elected by the citizens for a fixed tenure is both, the Head of State and Head of Government. Thus, there is only one executive.
• The Legislature is also directly elected. Generally, members of the executive are not permitted to belong to the legislature.
• There exists a separation of legislative and executive powers as well as a system of checks and balances for e.g., Legislature can impeach the President, while the President can exercise the ‘Veto Power’ to reject any law passed by the Legislature.
• The President can continue in office irrespective of whether or not he/she enjoys majority support in the Legislature.

Federalism:
A federation refers to a political structure in which there are two sets of governments i.e. one for the whole
country and governments in each of the federal units (called Provinces or States). There is a distribution of powers between the Federal government (also known as Union or Central Government) and the State Governments. Federal governments are preferred in countries having large size and heterogeneous population.

A Federation may be performed by two processes –

1. Small political units ‘come together to establish a single, large political unit for e.g., thirteen colonies came together to fight for independence from British rule and the U.S. federation came into being. This is called centripetal process.
2. States are created by the Union government for e.g., in India, States were reorganized on the basis of language and other regional aspirations. This is the centrifugal process.

The main features of a federation are –

• Dual set of government i.e., Union and State governments.
• Division of power between the two sets of governments for e.g., in India, jurisdiction is distributed
  between the Union (Centre) and States on the basis of the Union, State and Concurrent lists (as stated in Seventh Schedule of the Constitution)
• A written constitution to enable a clear distribution of government powers.
• Independent judiciary – to resolve Centre-State or State-State disputes.

The Indian Federation differs greatly from the U.S. federation. India has been described as ‘quasi federation’ or a ‘federation with an unitary spirit’ as the division of powers favours the Central government for e.g., it has full control over the Union list and Residuary subjects and it’s laws have precedence over state laws even in case of the Concurrent list.

Unitary system: countries that are small in size prefer to have a single, central, government. This is called an Unitary System. This is seen in Cuba, France, Bolivia, Israel, Portugal, Sri Lanka, etc. Some hitherto unitary system change to a quasi-unitary form through establishment of provinces and distribution of political power to somewhat autonomous units for e.g., UK has an unitary system. However, its regions i.e., Scotland, Wales, Northern Ireland have their own assemblies with some degree of autonomy. These are known as ‘Holding Together’ federations.

By going through these Maharashtra State Board Class 11 Sociology Notes Chapter 2 Contribution of Western and Indian Sociologists students can recall all the concepts quickly.

Maharashtra State Board Class 11 Sociology Notes Chapter 2 Contribution of Western and Indian Sociologists

→ France is said to be the birthplace of sociology as the foundations of sociology were laid by Auguste Comte and Emile Durkheim.

→ Sociology was later continued in other countries in Europe and the western world.

Introduction to Western Sociologists:

1. Auguste Comte (1798-1857).
2. Emile Durkheim (1858-1917)
3. Karl Marx (1818-1883)

(1) Auguste Comte (1798-1857).

• Auguste Comte is popularly known as the ‘Father of Sociology’.
• His full name was ‘Isidore Auguste Marie Francois Xavier Comte.
• He was a mathematician and philosopher, yet expressed the need for ‘reconstruction of society’.

Three Stages pf Evolution:

1. Theological Stage
2. Metaphysical Stage
3. Positive/Scientific Stage

(2) Emile Durkheim (1858-1917)

• Emile Durkheim has written on social facts, social solidarity, collective representation, social values and morality, crime and punishment.
• He has elaborated an analysis of suicide as a social fact and phenomenon in his book. ‘Le Suicide’.
• Durkheim, “suicide refers to every case of death which results directly or indirectly from a positive or negative act, carried out by the victim himself, knowing that it will produce this result”.

Forms of Suicide:

1. Fatalistic Suicide
2. Altruistic Suicide
3. Egoistic Suicide
4. Anomic Suicide

(3) Karl Marx (1818-1883)

• Karl Marx is also known as the architect of communism.
• In his ‘Communist Manifesto’ he said that at every stage in history, there is a war between the classes.
• According to Marx, the economic factor forms the basis of class.

Theory of ‘Class Conflict’ :

• The Importance of Property
• Class Solidarity and Antagonism
• Polarization of Classes
• Revolution
• Surplus Value
• Dictatorship of Proletariat
• Pauperization
• Emergence of the Communist Society
• Alienation

Introduction to Indian Sociologists:

• ‘Sociology’ and ‘Social anthropology’ were brought to India by British scholars living in India.
• Indian scholars trained in Britain and USA played a major role in the development of their two disciplines.
• A separate department was started in the University of Mumbai (then Bombay) in the year 1919.
• Indian sociologist played a major role in the development of sociology in India, with their specific
  contributions.

By going through these Maharashtra State Board Class 11 Sociology Notes Chapter 1 Introduction to Sociology students can recall all the concepts quickly.

Maharashtra State Board Class 11 Sociology Notes Chapter 1 Introduction to Sociology

→ Initially, sociology as a discipline emerged in Europe, but sociology emerged as an independent and separate discipline in the mid 19th century. Sociology is the science of social relationships and social behaviour. The French philosopher Auguste Comte is considered to be the ‘Father of Sociology’.

Nature of Sociology:

1. Empirical Science
2. Theoretical and Applied Science
3. Factual Science
4. Holistic Science

The emergence of Sociology: The roots of the emergence of sociology as a scientific discipline can be traced during the French Revolution and Industrial Revolution of European history which embodied tremendous Social, Political, and Economical changes. This period of change in European Society is known as the ‘Enlightenment period.’

Factors that affect the emergence of sociology:

1. Commercial Revolution
2. Industrial Revolution
3. French Revolution
4. scientific revolution
5. Urbanization

→ The subject matter of Sociology is very wide, because all aspects of social interactions are included in Sociology.

Scope of Sociology:

• Bio-Sociology
• Sociology of Art
• Sociology of Market Research
• Visual Sociology
• Diaspora Sociology

Importance of Sociology:

• studies society in a scientific manner
• gives knowledge about social diversities
• develops a scientific approach
• career-oriented
• solution to social problems
• keeps people updated and alert

By going through these Maharashtra State Board Secretarial Practice 11th Commerce Notes Chapter 11 Correspondence with Banks students can recall all the concepts quickly.

Maharashtra State Board Class 11 Secretarial Practice Notes Chapter 11 Correspondence with Banks

Bank – Definition-

(a) “Banking means accepting for the purpose of lending or investment of deposits of money from the people repayable on demand or otherwise and withdrawable by cheque, draft, order or otherwise.
– Banking regulation Act 1949

(b) “A Bank is an institution which deal in money and credit”.
– Cairns Cross

Functions of Commercial Bank-

1. Primary Functions:

1. Accepting Deposits
2. Lending Money:

1. Accepting Deposits

• Demand Deposits
• Time Deposits

Demand Deposits

• Savings Account
• Current Account

Time Deposits:

• Fixed Deposits
• Recurring Deposits

2. Lending Money:

1. Loans
2. Advances

Loans:

• Short Term Loan
• Medium Term Loan
• Long Term Loan

Advances:

• Overdraft
• Cash Credit
• Discounting Bill

2. Secondary Functions:

1. Agency Functions
2. Utility Functions

1. Agency Functions:

• Collection of Cheques and Bill
• Collection of Dividend, Interest, Salary
• Payment of Rent, Insurance, Electric Bill
• Purchase and Sales of Securities

2. Utility Functions

• Safe Deposit Vault
• Letter of Credit
• ATM, Credit Card, Debit Card
• Travellers Cheque
• RTGS, NEFT, NACH, ECS.

Demand Deposits :
The deposits which are payable on demand are called Demand deposits. There are 2 types of Demand Deposits i.e. Savings Deposits and Current Deposits.

Time Deposits :
The Deposits which are not repayable on demand are called ‘Time Deposits’. There are ‘2 types of Time Deposits i.e. Fixed Deposits and Recurring Deposits.

Loans :
A loan granted for a specific time period against personal security, gold or silver and other movable or immovable assets is called term loan.

Advances :
An advance is a credit facility provided by the bank to its customers for a shorter period to meet day-to-day requirements of a business.

Overdraft:
Overdraft is a credit facility granted by Bank to its Current Account holders against certain collateral securities. Banks allow its customers to overdraw an amount upto particular limit.

Cash Credit:
It is a facility, where bank allows the borrower to withdraw upto a specific limit as and when he needs by opening separate account.

Precautions By Secretary While Corresponding with Bank-

1. Legal procedure
2. Prompt reply
3. Brevity Conciseness
4. Secrecy
5. Accuracy
6. Clarity
7. Courtesy

Circumstances For Correspondence With Banks-

1. Opening a Current A/c
2. Request for issue of letter of credit
3. Stop payment of cheque
4. Request for anting overdraft facility

Word Meaning:

aids – to help; negotiable – flexible /to bargain; lending – to give money for certain period of time; discounting – deducting the amount; idle – to sit without work / not in use; assistance – to help; surplus – excess/extra; remittances – transfer / to pass on; channelize – planning; executor – a person who is appointed to carry out the work; commercial – business / trading; attorney – legal person; e-statement – statement received in mail of an individual; settlement – payment; overdraft – borrowing money in excess of funds available in individual account for certain period; precautionary – to take care / prevention; recurring – repeatedly; inconvenience – difficulty; periodically – at regular intervals; regretted – to be sorry; immovable – cannot be moved from one place to another for certain days month/years; hypothecation – any commodity kept as a security against a loan; sanctioned – to allow /to approve; specimen – sample; collateral securities – an asset kept as a security for taking loan.

By going through these Maharashtra State Board Secretarial Practice 11th Commerce Notes Chapter 3 Formation of a Company students can recall all the concepts quickly.

Maharashtra State Board Class 11 Secretarial Practice Notes Chapter 3 Formation of a Company

Formation of a Company-

• it means registering or incorporating a company with the Registrar of Companies (R.O.C.)
• it must be registered with ROC of the concerned state where a company is situated.
• ROC is an authority as per the companies Act which can incorporate or register the companies.
• 3 types of companies can be formed depending on number of promoters.

Promoter-

• is a person who takes an initiative efforts to form a company.
• Promoter can be an individual, a partner, a company, an association or a syndicate.

Companies Based On Minimum Number Of Promoter-

1. Public Company – 9Promoters
2. Private Company – 2Promoters
3. One person Company – 1Promoter

Companies Based On Capital Structure-

MOA – Memorandum of Association is a document stating the aims and objectives of the company.

AOA – Articles of Association is a document stating rules and regulations for internal management.

Promotion – It means taking all necessary steps to incorporate a company as per the rules and regulation of the Companies Act, 2013.

Prospects:

• a document issued by public company.
• inviting public to subscribe or buy the shares of prospects issuing company.

Annual Return :

• yearly statement prepared by the company.
• giving information about company’s ownership, its activities and financial position of the company.
• filed with Registrar of Company.

Stages In Formation Of A Company:

1. Promotion Stage
Steps:

• Idea of starting business
• Deciding objects of the business, amount of capital, scale of operation, etc.
• Preparing documents — MOA and AOA
• Approaching investors for capital
• Nominating first directors and first subscribers to MOA and AOA
• Forming contracts (Pre- incorporation Contracts or preliminary contracts)

2. Incorporation state
Steps:

• Obtain Digital Signature Certificate (DSC)
• Register DSC in the name of Director with MCA
• Obtain Director Indentification Number (DIN)
• Apply for Reservation of Name
• Finalize Memorandum of Association and Articles of Association
• Signing, Stamping and Dating of Memorandum and Articles of Association
• Prepare other necessary documents
• Decidingaddressfor communication
• Obtain a statutory declaration
• Filing of application and documents for Incorporation with ROC
• Obtaining Certificate of Incorporation

Commencement of Business Stage
Steps:

• Filing of Declaration. by Director
• Filing a verification of registered office
• Obtain licence from Sectoral Regulator
• Obtain Certification of Commencement of business

Role of Promoters:

• Decide objects of business, amount of capital, size of business operation
• Generate idea of starting business
• Entering Pre-incorporation conträcts Preliminary contracts
• Prepare documents MOA and AOA
• Approach investors for raising capital
• Nominate first directors and first subscribers to MOA and AOA

Fiduciary Duty- It is a duty of person to act in good faith and trust which is put upon him by another person.

Steps in Promotion of a Company-

• Come up with an idea or activity
• Preparing financial plan
• Preparing draft of MOA and AOA
• Entering Preliminary contracts
• Appointing first Directors

DSC- Digital Signature Certificate is a signature of a person in digital or electronic form
It is used to sign on e-documents.

MCA- Ministry of Corporate Affairs administers the Companies Act, 2013.

DIN-

• Director Identification Number is to be applied in electronic form SPICe – 32 at the time of incorporation.
• A person to be appointed as a Director must have a DIN.
• It is a 8 digit identification number.

CRC- Central Registration Centre is an authority which provides speedy incorporation related services.

PAN-

• Permanent Account Number
• Issued by Income Tax Department
• 10 digit Alpha-numerical code
• Proof of identification of a person paying Tax

Contents Of Certificate Of Incorporation-

• Pan and tan of a Company
• Name of a Company
• Date of issue of Certificate of Incorporation
• Signature of ROC with date and seal
• CIN

TAN-

• Tax Deduction and Collection Account Number
• Issued by Income Tax Department
• 10 digit alpha-numerical code
• Issued to all persons —responsible for deducting or collecting Tax

CIN – 

• Corporate Identity Number
• Issued by ROC at time of Incorporation of Company
• 21 digit alpha – numerical code

Indicates

• Listed or Unlisted company
• Industry code
• State of Company’s location
• Year of incorporation
• Type of ownership
• Registration number

Word Meaning:

incorporation – to enroll; commencement – to start; promoters – persons who carry the process of formation of a company; extent – amount/size; guaranteed – confirmed; accustomed – usually; nominated – suggested/ put forward; subscribers – members; fiduciary – financial; compensates – returning back in terms of money; reimbursing – to pay back / repay; preliminary – starting, initial; database – records; pursuant – according to; description – detailed; convicted – declared; preceding – coming before something; stating – to declare; integrated – jointly / combined; distinct – well defined in existence; borrowing – to get or receive something; declaration – a report, statement; sectoral – specific area; regulators – a person or body who supervises (looks after) particular area; prospectus – a printed booklet giving details of company.

By going through these Maharashtra State Board Secretarial Practice 11th Commerce Notes Chapter 10 Correspondence with Directors students can recall all the concepts quickly.

Maharashtra State Board Class 11 Secretarial Practice Notes Chapter 10 Correspondence with Directors

Directors

• Collectively as a ‘Board’ exercises powers and authorities
• Elected representatives of the shareholder
• Called as Brain of the company
• Responsible for decision making, framing plans and policies.
• Holds important position in management of a company.

Precautions While Corresponding with Directors-

• Politeness
• Accuracy
• Brevity
• Initiative
• Prompt Reply

Circumstances for Corresponding with Directors-

• Notice and Agenda of Board Meeting
• Asking to disclose personal interest of Director in a contract
• Report to the Director who was absent for a meeting.
• Reminding provision regarding absenteeism at the Board Meetings.

Secretary-

• Executive officer of a Joint Stock Company
• Provides assustance and guidance to the Directors
• Implements decisions taken Board of Directors
• Acts as a link between the Directors and other management staff
• Called as – eyes, ears, hands and mouthpiece of the ‘Board’

Word Meaning –

collectively – together; key position – important position; cautious – careful; tactful – understanding; prompt – quickly; queries – question; empathy – ability to understand others; goodwill – reputation; numerical – in numbers; factual – real; brevity – in brief; lengthy – long; irrelevant – unimportant; circumstances – situation; consecutive – continuous; periodicity – at regular time gap; disclose – tell; accelerate – quickly; sole – single; consideration – attention; vacated – to leave; diligently – doing work carefully; skip – fail to attend; scheduled – planned; disclosure – declaration; expert – person who is knowledgeable on particular subject; forwarded – sent; constantly – always.

By going through these Maharashtra State Board Secretarial Practice 11th Commerce Notes Chapter 2 Joint Stock Company students can recall all the concepts quickly.

Maharashtra State Board Class 11 Secretarial Practice Notes Chapter 2 Joint Stock Company

Evolution of Business Organization –

1. Sole Trading Concern
2. Joint Hindu Family Business
3. Partnership Firm
4. Limited Liability Partnership
5. Co-operative Society
6. Joint Stock Company

Sole Trading Concern
Owned, managed and controlled by one person. It is also called as ‘One Man Business’. A person who conducts the business is called “Sole Trader”.

Features of Sole Trading Concern –

1. Not suitable for large scale business operations
2. No separate Law or Act but follow all laws of land
3. Only one owner
4. Do not have separate legal status
5. Capital contribution is very small
6. Liability is unlimited
7. No division of profit or loss
8. Decisions of business by Sole trader
9. Maximum business secrecy

Joint Hindu Family Business-

• When a Hindu Undivided Family conducts business, inherited by it as per Hindu Law, it is called a Joint Hindu Family Business.
• Exists only in India governed by Hindu Succession Act 1956.

Features of Joint Hindu Family Business-

• Karta decision maker
• Membership is by birth only
• Karta : Manager, controller and co-ordinator
• Limited liability of ‘Co-parceners’
• Liability of Karta is unlimited
• Profit sharing ratio keeps on changing
• Head of family as “Karta”
• Other family Members are ‘Co-parceners’
• No limit on minimum and Maximum number of members
• Engaged in the business

Partnership Firm-

• The business organization which is owned, managed and controlled by two or more person is called a partnership firm.
• Owners are called Partners, Organization is called a firm.
• It is governed by Indian Partnership Act, 1932.

Features of Partnership Firm-

• Partners share profit and losses in agreed ratio
• NO separation of ownership and management
• Agreement between two or more persons
• Number of members Minimum : Two, and Maximum fifty for general business
• Joint owners as well as joint managers Liability of partners unlimited, joint and several
• Capital contributed by partners
• DO not enjoy separate legal status

Limited Liability Partnership (LLP)-

• It has a combination of features of both partnership and joint stock company.
• Partners have limited liability
• Governed by the Limited Liability Partnership Act of 2008.

Features of Limited Liability Partnership-

1. Separate legal entity i.e. a body corporate
2. Number of partners- Minimum- two. Maximum- unlimited.
3. No minimum requirements of capital contribution.
4. Simple to form and easy to operate.
5. Liability of each partner is limited to his share as written in the agreement.
6. Low cost of formation.
7. No restriction on joining and leaving the LLP except as stated in partnership agreement.
8. Double taxation is avoided, no tax on profit share.

Co – operative Society-

• It is a voluntary association of persons formed to achieve certain economic objectives.
• It is service oriented.
• Governed under the Maharashtra State Co-operative Societies Act 1960.

Features of Co- operative Society-

• Compulsory Registration
• Membership open to all.
• Number of members- Minimum- ten, Maximum- no limit.
• Limited liability of a member.
• Aim is not maximization of profit but to provide services to its members.
• Independent legal status.
• Democratic in nature, equality in voting right One member one vote’.
• Control and supervision by the state government.

Joint Stock Company (JSC)-

• It is a more formal form of business organization.
• Satisfies requirement of modern industry
• Convenient to conduct large scale business industry
• Types of  Joint Stock Companies
  • Public
  • Private
  • Government
  • Statutory etc.

Definition of Joint Stock Company-

• According to Section 2(20) of the Companies Act 2013. “Company means a company incorporated under this Act or under any previous company law.”
• According to Prof. H. L. Haney “A Joint stock company is a voluntary association of individual for profit, having its capital divided into transferable shares, the ownership of which is the condition of membership.”

Features of Joint Stock Company- 

1. Voluntary Association –

• Membership is open to all
• Can become a member or leave subject to the provisions of Articles of Association of the company.

2. Incorporated Association-

• Registration or incorporation is compulsory.
• After registration an association obtains the status of a Joint Stock Company.

3. Separate Legal Entity

• Members are the owners and are liable in limited way.
• Members are conferred with rights and duties.

4. Artificial Person

• Created by law.
• Legal process and own independent personality.
• Legal rights to enter into contracts, purchase and sell assets and property etc.

5. Perpetual Succession

• Continuous in existence.
• Not affected by death, insolvency or retirement of any of any members.
• Very long and stable life.

6. Common Seal

• It is a device that acts as a signature of the company.
• Affixed on all the important documents and contracts.
• Usually signed by two directors and the secretary as a witness after the seal is affixed.

7. Limited Liability

• Shareholders have limited liability.
• Shareholder is liable to pay only the unpaid amount of his shares.
• Shareholder is not concerned with debts and liabilities of the company.

8. Separation of Ownership and Management

• Shareholders are real owners of the company, but large and scattered.
• Unable to manage the day to day affairs of the company.
• Board of Directors look after the management and policy decisions of the company. They are elected representative of shareholders.

9. Transferability of shares

• Shares of public company are freely transferable.
• Shares of private company are not freely transferable.

10. Number of Members

• Owned by a large number of persons.
• Private limited company — minimum 2 members maximum — 200 members
• Public limited company — minimum 7 members maximum — no limit

11. Capital

• Raise huge capital.
• In form of shares, debentures, bonds, public deposits
• Obtain loans from banks and financial institutions.

12. Government Control

• Company is controlled and supervised by the Government.
• Registered company follow rules and regulations of company law.
• Accounts are audited.
• Copy of profit and loss, balance sheet, financial statement are submitted to the registrar.
• To protect the financial interest of small investors.

Types of Companies-

1. On the basis of Incorporation
2. On the basis of number of members
3. On the basis of liability of members
4. On the basis of control
5. Other types

On the basis of Incorporation:

• Statutory Company
• Registered Company

On the basis of number of members

• Private Company
• Public Company
• One Person Company (OPC)

On the basis of liability of members-

• Company limited by shares
• Company limited by Guarantee
• Unlimited liability Company

On the basis of control-

1. Holding Company
2. Subsidiary Company

Others types –

1. Government Company
2. Foreign Company
3. Dormant Company
4. Listed Company
5. Small Company
6. Associate Company
7. Company not for profit

On the basis of Incorporation-

1. Statutory Company
2. Registered Company

Statutory Company:
Companies incorporated by Special Act passed by Central or State legislative, e.g. Reserve Bank of India, State Bank of India, Unit Trust of India, Life Insurance Corporation, etc.

Registered Company:
Companies incorporated under the Companies Act, 2013 or any previous company law.

On the basis of Number of Members

Private Company (SECTION 2(68)):

• Restrict the right of members to transfer its shares.
• Maximum number of members upto 200.
• Prohibits any invitation to the public for any securities or deposits of company.
• Company limited by shares or company limited by guarantee or an unlimited company.
• Must add the words “Private Limited” at the end of its

Public Company (Section 2 (71)):

• Has no restriction on the transfer of its shares.
• Minimum number of members should be seven.
• Has minimum paid up share capital.
• Does not prohibit any invitation or acceptance.
• Must add the word “Limited” after the name of the company.

One Person Company (Section 2 (62)):

• Single Promoter who has limited liability.
• Can have one or more directors.
• No need to hold Annual General Meeting.
• Better form of sole proprietorship.

On the basis of Liabilities of Members:

Company Limited By Shares Section 2(22):

• Have share capital and liability limited to the unpaid part of face value of shares purchased by member.
• May be a public company or a private company.
• Most popular type of companies.

Company Limited By Guarantee: Section 2(21)

• May or may not have a share capital.
• Member promises to pay a fixed sum of money specified in the Memorandum of the company.
• Non-profit making companies.
• Purpose of promotion of art, science, culture etc.

Unlimited Liability Company Section 2(92)

• Not having any limit on the liability of its members.
• Members are fully liable to cover the debts of the company.
• Can be either a private or . a public company or a one person private company.

On the basis of Control –

1. Holding Company Section 2(46)
2. Subsidiary company section2(87 )

Holding Company Section 2(46):

• Company holds more than one half of thetotal share capital of another company
• Has power to appoint or remove Directors of another Company.

Subsidiary company section2(87):
Company which is controlled by holding company.

Other Types-

1. Government Company:
Section 2(45):
Company in which not less than 51% of the paid up share capital is held by

• Central Government or
• State Government or Governments or
• Partly by Central Government and partly by one or more State Governments
• Subsidiary company of a government company. e.g. H.M.T, BHEL, ONGC etc.

2. Foreign Company:
Section 2(42):
Company incorporated outside India, but having a place of business in India.
e.g. Bata India Ltd, Nestle India Ltd.

3. Dormant Company:
Registered for a future project or has not made any significant accounting transactions in last two years or has not filed financial statements or annual returns in last two years, after making application u/s 455.

4. Listed Company: Section 2(52)
Company which has any of its securities listed on any recognized stock exchange following SEBI’s guidelines and the provisions of the Companies Act.

5. Small Company:
Section 2 (85):

• Paid up share capital of which does not exceed 50 lakh or such higher amount as may be prescribed
• whose turnover as per last profit and loss account does not exceed 2 crores or such higher amount as may be prescribed.

6. Associate Company: Section 2(6)
Company which controls at least 20% of total capital or of business decisions over a subsidiary company.

7. Company not for profit:
Registered u/s 8 of Companies Act.

Word Meaning:

revolution – complete change; radical – entire; anticipation – expectation; evolved – to come in existence; inadequate – insufficient/ not enough; emerged – came into existence; proprietor – single owner of business; operations – working; inherited – getting from ancestors; contribution – collection; formation – coming into being; achieve – to get; differs – unlike; democratic – representatives are elected; stability – fixed; Managerial ability – ability to manage various works at a given time; Statutory – owned by Government company; enactment – passed by; reveal – tells; conclude – end; Perpetual succession – Continuation; obtains – to get; conferred – grant; scattered – spread all over; desires – want; registrar – a person who looks after registration of company; obligations – responsibilities; penalized – fine; prohibit – restricted/stop from doing something; promoter – person who starts with an idea of starting an organization: memorandum – written document specifying the policies of a company; liquidation – converting assets into cash; significant – important; insolvency – financial loss to an individual or company.