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Company form of Business Organisation

NIOS · Class 12 · Business Studies

Quick revision notes for Company form of Business Organisation — NIOS Class 12 Business Studies. Key concepts, formulas, and definitions for last-minute revision.

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Key Topics to Revise

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1. Meaning and Definition of Company

  • A company is a voluntary association of persons with large and fluctuating membership
  • It is an artificial person created by law with separate legal identity
  • Defined under Section 2(20) of Companies Act 2013
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2. Characteristic Features of a Company

  • Incorporated Association: Must be registered under Companies Act; minimum 7 members for public, 2 for private, 1 for OPC
  • Legal Entity Distinct from Members: Company and members are separate; company can sue and be sued; members cannot claim ownership of company assets
  • Artificial Person: No physical body; exists in law only; depends on directors and officers for operations
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3. Kinds of Companies

  • Two main categories: Private Companies and Public Companies
  • Private Companies: (i) One Person Company (OPC) - only 1 member, (ii) Small Company - specific criteria on capital and turnover
  • One Person Company Features: Only adult Indian citizen resident in India can incorporate; minimum 2 meetings of Board per year; no AGM mandatory; can dispense with company secretary signature on annua
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4. Formation of a Company (Four Stages)

  • Stage 1 - Promotion Stage: (i) Discovery of idea, (ii) Take action to investigate and collect market data, (iii) Promoter assembles resources
  • Promoter Definition: Person who conceives business idea and takes measures for enterprise establishment; stands in fiduciary position; defined in Section 2(69)
  • Stage 2 - Registration/Incorporation Stage: Filing documents with Registrar of Companies

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Key Concepts

A voluntary association of personsEight key characteristics define a companyA company with minimum paidA company that is not privateFormation involves four stages

Frequently Asked Questions

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Sources & Official References

Content is aligned to the official syllabus. Refer to the board website for the latest curriculum.

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