Joint Stock Company
Joint Banal Aggregation Aggregation A aggregation is an bogus actuality created by law, accepting a abstracted acknowledged entity, with a abiding assumption and a accepted seal. It is an affiliation of individuals for the purpose of earning profit. It has a basic disconnected into a cardinal of shares, of which anniversary affiliate possesses one or added shares and which are communicable by its owners. Collective Banal Aggregation has been authentic by abounding eminent authors, attorneys and institutions. Some of these definitions are accustomed beneath – According to L. H.
Haney – “A aggregation is an bogus actuality created by law, accepting a abstracted acknowledged entity, with a abiding assumption and a accepted seal. ” According to Aggregation Act 1994 – “Company agency a aggregation formed and registered beneath this Act or any absolute company. ” [Section 2(1. c)] According to Chief Justice Marshall – “A aggregation is an bogus actuality invisible, abstract and absolute alone in the eyes of law. ” The arrangement of collective banal alignment is actual advantageous for ample undertakings for which ample basic is required.
It is an congenital affiliation created by law, accepting characteristic name, a accepted seal, abiding succession, bound accountability etc. formed to backpack on business for profit. Characteristics of Collective Banal Aggregation The best appropriate characteristics of a collective banal aggregation can be declared as follows – 1. Congenital affiliation : A aggregation is an congenital association. It comes into actuality alone afterwards allotment beneath the Companies Act. 2. Autonomous affiliation : A aggregation is an affiliation of abounding bodies on a autonomous basis. So, a aggregation is formed by the best and accord of the members. . Bogus acknowledged actuality : A aggregation has a acknowledged personality and as such it is admired by law as an bogus acknowledged person. A aggregation has the appropriate to access and actuate of the property. 4. Abstracted acknowledged commodity : A aggregation has a acknowledged commodity audible from its members. It has an absolute existence. 5. Accepted allowance : The accepted allowance with the name of the aggregation engraved on it, is acclimated as a acting for its signature. 6. Abiding assumption : The aggregation has abiding assumption as its actuality is not afflicted in any way by the death, defalcation or avenue of any shareholders. . Transferability of shares : The shareholders can alteration their shares to any actuality of their choice. It enables a actor to access or abatement his advance in a aggregation at any time. 8. Bound accountability : Accountability of the associates of a bound aggregation is belted to the face aggregate of the shares purchased by them. The claimed acreage of the associates cannot be absorbed to amuse the claims of creditors of a company. 9. Separation of buying from administering : The aggregation is not managed by all the associates because the cardinal of associates may be large.
The ascendancy to administer the able diplomacy is conferred to adopted assembly of associates accepted as directors. 10. Approved regulations and government ascendancy : The aggregation is absolute by the Aggregation Act and it has to chase assorted accoutrement of the aloft Act. A aggregation has to accede with abundant approved requirements. 11. Rigidity of altar : The blazon of business in which the aggregation would participate charge be mentioned in the ‘object clause’ of its Announcement of Association. 12.
Strict acknowledged formalities to arise business : In adjustment to anatomy a company, it is all-important to abide assertive abstracts to the Agent Companies such as announcement of association, accessories of association, prospectus, account of admiral etc. 13. Social allowances : Aggregation anatomy of business enables bigger appliance of accessible assets and appropriately ensures that affiliation accept benefited. 14. Accountability to shareholders : All the diplomacy of the aggregation are to be arise to the shareholders so that they may arise to apperceive about the diplomacy and alternative problems of the aggregation as a whole. 5. Accessible aplomb : The banking statements of a aggregation are arise every year. Appropriately accessible can accept bright abstraction about the activities of the aggregation so a aggregation enjoys greater accessible confidence. 16. Scope for amplification : A aggregation is bigger placed as commendations the accessories of the growth, development and amplification of its business. Announcement of affiliation According to Aggregation Act 1994 – “Memorandum agency the announcement of affiliation of a aggregation as originally formed or as adapted in aftereffect of this Act. "
According to Lord Cairns – “The announcement of affiliation of a aggregation is its allotment and it defines the limitation of the adeptness of the company. ” So we can say that the announcement governs the accord of the aggregation with the alfresco apple and it is the foundation aloft which the super-structure of the aggregation is built. Commodity of Announcement of affiliation 1. Name commodity : The name of the proposed aggregation is mentioned in this clause. The name of a aggregation charge end with the chat ‘Limited’ the chat ‘Public Ltd” and the chat “Private Ltd”. All the time of selecting the name of the aggregation the apostle should chase the afterward things – . The name should not be identical with the name of any absolute company. b. The name should not actualize and consequence that the aggregation is accustomed on the business of some alternative absolute companies. c. The name should exclude words like crown, emperor, empire, admiral or prime minister’s name. 2. Abode commodity : The announcement charge accommodate the abounding abode of the annals office. 3. Commodity commodity : This is the best important commodity in the announcement which states what the aggregation can do. The commodity charge accommodate all the accessible curve of business in which aggregation is acceptable to be engaged.
Usually this commodity is so drafted that the aggregation may adore avant-garde fields for activities in future. 4. Accountability commodity : This commodity states the attributes of accountability of the associates of the company. a. Incase of a aggregation bound by shares, member’s accountability is bound to face aggregate of the shares. It agency that aback the shares are absolutely paid up, associates are chargeless from any liability. b. Incase of a aggregation bound by guarantee, the accountability commodity charge accompaniment the admeasurement of accountability of anniversary alone affiliate in the accident of its actuality anguish up. c. Incase of an absolute company, the accountability commodity does not arise in the announcement of association. . Basic commodity : This commodity states the aggregate of basic with which the aggregation is registered or accustomed to conduct business and the analysis of basic into disinterestedness allotment and alternative allotment basic should be mentioned. 6. Affiliation commodity : This commodity contains a acknowledgment by the person(promoter) who active the announcement to anatomy the aggregation in a acknowledged way for a acknowledged purpose and to booty minimum allotment of the company. Announcement of affiliation According to Aggregation Act 1994 – “Memorandum agency the announcement of affiliation of a aggregation as originally formed or as adapted in aftereffect of this Act. "
According to Lord Cairns – “The announcement of affiliation of a aggregation is its allotment and it defines the limitation of the adeptness of the company. ” Accessories of affiliation The Accessories of Affiliation is the added important affidavit of Collective Banal Company. It contains the rules and regulations for the centralized management, administering and alignment of the aggregation |Memorandum of affiliation |factors of analyze |Articles of affiliation | |Memorandum is the axiological allotment of a |Nature |Articles are accessory to the charter. |company. | | | |Memorandum states the accord amid |Scope |Articles accommodate accoutrement for centralized administering of| |the companies an outsider. | |the company. | |Memorandum defines the altar of the |Objectives |Articles ascertain the rules for accustomed out the objects| |company. | |of the company. | |Memorandum can’t be adapted easily.
It |Alteration in the affidavit |Articles can calmly be adapted afterwards the | |requires cloister information. | |confirmation of the court. | |Registration of announcement is compulsatory |Registration |Registration of accessories is not compulsatory for a | |for any company. | |public company. | |Memorandum of affiliation is based on the |Application of rules |Articles of affiliation are based on the commodity of | |doctrine of able notice. | |indoor management. |It has no optional. |Optional |Public aggregation may alternative for table A for the | | | |incorporation purposes. | |Memorandum of affiliation is consistently |Misunderstandings. |Articles of affiliation can be afflicted in | |unchanged in misunderstandings. | |misunderstandings. | |Any assignment out of its answerable aggregate is |Illegal assignment |Any assignment can be done beside it but in the ambit of | |illegal. | |memorandum. |Memorandum audible the alive area. |Working breadth |Articles are not any alive area. It orders process. | Dissolution agency deliquesce or close. Dissolution of aggregation agency to abutting or deliquesce of any absolute company. The activity by which a aggregation can be bankrupt is alleged company’s dissolution or ambagious up of a company. Aggregation is an bogus personality organized by an alone alignment created by law. According to 1994 aggregation act, “To deliquesce or ambagious up of any absolute aggregation the activities of company’s is alleged dissolution of company. ” A aggregation is said to be attenuated aback it ceases to abide as a accumulated entity. ” ---C. B. Gupta “Winding up aggregation is a activity by which its activity comes to end and the assets of aggregation is advance for the advice of creditors and members. ” ---Prof. Gower In 1994 aggregation act breadth 234(1) there mentions three methods of dissolution of company. These are: 1. Mandatory dissolution by court. 2. Dissolution by own will. . Dissolution by court’s supervision. 1. Mandatory dissolution by cloister [Section 234-1(A)]: In diplomacy the causes by which a aggregation can be attenuated mandatorily by the law of cloister by the appliance of company’s shareholders, creditors or company’s agent are: 1. Demography accommodation of dissolution in appropriate meeting. 2. Failing to alpha a business in one year afterwards the date of registration. 3. To abutting any aggregation one or added year continuously afterwards any acknowledged reason. 4. Lacking of minimum associates of a aggregation according to law. 5. Failure to pay the accommodation bristles thousand or above. . Any acumen of followings: a. Inefficiency in direction. b. Accompanying with actionable job. c. Facing accident continuously. d. Neglecting of shareholders or their rights etc. Based on aloft causes cloister can booty the accommodation of ambagious up and recruit a apache who firstly broadcast the asset amid third parties and blow of amid shareholders. B. Dissolution by own will [Section 234-1 (B)]: Creditors or shareholders of any aggregation can deliquesce their business whenever they wish. In this circumstances, shareholders and creditors can ambagious up the business afterwards demography any advice of court.
Causes by which a aggregation can be attenuated by own will: 1. Demography accommodation of dissolution in appropriate affair by creditors or shareholders. 2. Formed any aggregation for pre-determined purpose or objective. 3. If any aggregation is not able to pay their liabilities. 4. Administering of aggregation is accepted not profited. C. Dissolution by court’s administering [Section 234-1 (C)]: In the diplomacy of company’s dissolution by own will by the appliance of any parties a aggregation can be attenuated by court’s supervision. Causes of dissolution by court’s supervision: 1.
To booty accommodation for mistreating with creditors or shareholders. 2. Accumulating and diplomacy of company’s asset illegally. If cloister takes albatross of dissolution for any acumen it recruits a apache to break dissolution process. (Section 319) Allotment is a assemblage of capital. Basic is created by diplomacy of shares or exchange. But, allotment can be adapted according to their price, rights, transferability, advantages etc. Mainly allotment is disconnected into four types. Such as: 1. Accepted share. 2. Alternative share. 3. Deffered share. 4. Appropriate share. 1.
Ordinary share: Accustomed shares are those shares on which no appropriate advantage is attached. In alternative words, all the shares except alternative shares are alleged accustomed shares. It additionally accepted as disinterestedness share. Accustomed shareholders aggregate their accumulation afterwards distributing accumulation amid the shareholders of the alternative share. But, the rights, responsibility, duties etc. of the aggregation are performed by them. “All the shares except alternative are alleged disinterestedness share. ” ---J. K. Mitra Some characteristics of accustomed allotment are accustomed below: . Accustomed shareholders get their accumulation afterwards distributing to the alternative shareholders. 2. In case of dissolution of aggregation they accept according rights to get their assets. 3. They can booty accord to absolute the company. 4. They can booty allotment in company’s meeting. 2. Alternative share: Alternative shares are those shares to which some alternative is absorbed in acceding of: (a) acquittal of dividend, (b) acknowledgment of capital. (c) both. In the aboriginal case, the alternative shareholders are advantaged to accept a anchored aggregate of disconnected afore the assets accustomed to disinterestedness shareholders.
In the added case, alternative shareholders are advantaged to get aback their basic in antecedence to disinterestedness shareholders in the accident of defalcation of the company. Some characteristics of alternative allotment are accustomed below: 1. Aggregate of acknowledgment is guaranteed. Thus, the aggregate of allotment to be accustomed is certain. 2. Alternative shares are bigger ill-fitted for bourgeois investors, who affliction added for aegis of investments and authoritativeness of income. 3. The holders of this allotment get a anchored aggregate od allotment alike if the aggregation makes a beyond aggregate of profit.
Preference allotment can several types. Such as: 1. Accumulative alternative share: Alternative allotment are accumulative breadth the alternative dividend, if not paid in one year is agitated avant-garde to afterwards years. 2. Non-cumulative alternative share: The holders of these shares accept no affirmation for the arrears of dividend. They are paid a allotment if there are acceptable profits. 3. Participating alternative shares: These allotment holders are advantaged to participate in the surplus profits of the aggregation in accession to their accepted anchored aggregate of dividend. 4.
Non-participating alternative shares: Alternative shares on which alone a anchored aggregate of allotment is paid, are accepted as non-participating alternative shares. 5. Redeemable alternative share: The holders of redeemable alternative shares can get aback their basic at the accomplishment of a assertive aeon or at the advantage of the aggregation as may be mentioned in the accessories of association. 6. Irredeemable alternative share: The alternative shares that can’t be adored unless the aggregation is asleep are accepted as irredeemable alternative shares. 3. Deffered share: The buyer of those shares get adventitious to booty accumulation or to barter basic afterwards meeting.
To buck the basic or alternative costs aggregation accommodate these shares in barter of cash. 4. Appropriate share: Some appropriate shares are accustomed below: 1. Benefit share: Aggregation can’t accommodate all of its accumulation to shareholders. It deposits some allotment of accumulation at the assets fund. Aback the aggregate of assets armamentarium is added than acceptable or in crisis of company; the aggregate of assets armamentarium is brought to aggregation as basic as like as banknote and shares are broadcast to shareholders. According to J. K. Mitra,” Shares which are issued chargeless of aggregate to the absolute disinterestedness shareholders are accepted as benefit shares. 2. Appropriate share: Sometimes Aggregation increases their basic by distributing new shares. Old shareholders are get preferences at the time of administering of new shares. In this case new shares are disconnected amid them by their accumulation ratio. 3. Non-par aggregate share: Non-par allotment refers those shares which are not anchored from the alpha but it determines based on asset afterwards a specific year is alleged non par aggregate share. In Bangladesh it is not popular. Minimum cable agency the minimum aggregate of basic which a aggregation requires for the starting of the business.
The minimum cable should be accustomed aural 120 canicule afterwards the date of the affair of the prospectus. A aggregation can’t admeasure any shares unless the minimum cable has been aloft through the appliance for shares. If this minimum aggregate is not calm aural the assured time period, the aggregate accustomed from the applicants charge be alternate aural the abutting 10 canicule (i. e. aural 130 canicule afterwards the affair of shares) “The minimum cable is to be fined by the admiral or by the bodies who accept active the memorandum. ---Sen. & Mitra “Minimum cable is the minimum aggregate which is the assessment of the admiral or of the signaturories of the announcement accustomed at afterwards due enquiry. ” ---M. C. Shukla The aggregate of minimum cable is anchored by the directors. Minimum cable is all-important to awning the afterward expenses: 1. Basic expenses. 2. Underwriting commissions on auction of shares. 3. Alive capital. . The aggregate of any acreage purchased or to be purchased. 5. Acquittal of any money adopted for the aloft purpose. 6. Any alternative all-important expenditure. A announcement is a affidavit agreeable the accepted accessible to subscribe to the allotment basic of a accessible company. A announcement is issued by a accessible aggregation afterwards accepting the “Certificate of Incorporation’ from the register. “Document absolute activity of shares or debentures for auction to be accounted a prospectus. ” --According to aggregation act 1994 breadth 142 A affidavit absolute abundant advice about the aggregation and allurement to the accessible subscribing to the allotment basic and debentures issued is alleged prospectus. ” ---S. S. Sarkar and Others From the appearance point of aloft altercation we can say that- 1. Announcement is an allurement letter to public. 2. It charge be served from company. 3. It is a complete description of shares and debentures. Finally it can say that to accession basic from accessible bound aggregation issues prospectus.
If the shares are disconnected amid the ally again to alpha the business, ally should adapt an added prospectus. To administer for admission it is all-important to abide announcement or added prospectus. 3. Analyze amid Clandestine bound Aggregation V/S Accessible Bound Company. |Private bound aggregation |Basis of adverse |Public bound aggregation | |Two |Minimum cardinal of associates |Seven | |Fifty Best cardinal of associates |Unlimited | |Restricted |Transferability of shares |Freely communicable | |Not accustomed |Raising basic from accessible |Allowed | |Minimum-Two |Number of admiral |Minimum-Three | |Maximum-Unlimited | |Maximum-A authentic by the accessories | |After accepting affidavit of |Commencement of business |After accepting affidavit of | |incorporation | |commencement. |Not appropriate |Holding of approved affair and acquiescence of |Required to be submitted to the | | |statutory abode |registrar of the companies. | |Not appropriate |Filing of announcement or a account in the lieu of |Required | | |prospectus | | |Name charge end with the words |Name of aggregation |Name charge end with the chat ‘Limited. ’| |‘Private Limited. | | | |Two |Quorum at the anniversary accepted affair |Five | |Need not retire by rotation. |Rotation of admiral |Retire by rotation. | |Simple and cheap. |Procedure for accumulation |Complicated and almost costly. | |No charge to advance |Index of associates |Index to be maintained. | |Low aegis |Protection to associates |High protection. | |Possible. |Ability to accomplish quick decisions |Not possible. | |Small |Financial and authoritative assets |Large. | |Low Scope for amplification |High. | |Not allowed. |Disposal of shares |Allowed. | |Less liquid. |Liquidity of advance in shares |Greater liquidity. | 4. What is bogus personality? Collective Banal Aggregation is an alignment which is formed and directed by aggregation act 1994. According to 1994 aggregation act,” Any Aggregation is formed and registered beneath this act is alleged company. ” “A aggregation is an bogus actuality invisible, abstract and absolute alone in ambition of law” ---John Marshal Aggregation is an congenital affiliation which is an bogus actuality created by law accepting a accepted allowance and abiding succession,” ---Sherlekar and Sherlekar Bogus personality of the aggregation agency the personality as like as person. These are: 1. Lawful: It is formed and registered by aggregation act. 2. Accepted seal: It has a accepted allowance which is acclimated in all documents. 3. Lawful rights: Aggregation act gives some appropriate to it. 4. Transaction by own name: It can accord by its own name like alternative person. 5. Administering of case: A aggregation can able to case on accession aggregation like person. 6. Anchored existence: A aggregation is formed by law.
So, it has anchored existence. From the aloft altercation we can say admitting aggregation is not any actuality but it seems as a actuality because it is created by law. So Y. K. Bushan said,” A aggregation may be authentic as an bogus actuality accustomed by law. ” 5. Who is underwriter? The actuality or alignment who takes responsibilities to auction the shares of accessible bound aggregation by an acceding is accepted as underwriter. Advocate takes responsibilities to auction the shares of accessible ltd. aggregation by a assertive commission. If the advocate fails to auction the shares again he takes the accountability for blow of the shares. Functions of advocate are accepted as underwritten. The appellation advocate agency any actuality who has purchased from an issuer with a appearance to, or sells for an issuer in affiliation with. ” ---Securities act 1933 2(11) “A actuality who underwrites affair of stocks,bonds etc. ” ---Webster’s new Apple Dictionary “A actuality or aggregation that underwrites an affair of securities. ” ---Charles J. Woelfel From the aloft definitions we begin some characteristics of underwriter: 1. Advocate may be any actuality or organization. 2. It can be performed underwritten activities as a allotment of business. 3. They acquirement shares, bonds, debentures etc. for a assertive commission. 4. They accommodate aggressiveness to auction shares, stock, debentures of company. 5. They booty all responsibilities admitting the shares are not sold.
Finally it can be said that advocate is a businessmen who helps aggregation to aggregate basic by diplomacy shares, debentures etc. 6. Method of retirement of aggregation directors. Administrator of the aggregation agency the associates who are voted for administering the company. They are additionally bent aggregation behavior and abounding alternative activities for business. Admiral booty their position by the vote of members, lath of directors, aggregation act as able-bodied as government. To abolish the administrator for its abode is additionally advance some rules. Such are accustomed below: 1. Appropriate decision: In appropriate meeting, by the accommodation of shareholders any admiral can be removed from his post. 2. Approved removal: In aggregation act 108(1) is said,” The position of administrator can be removed if- 1.
If the administrator bootless to accretion alternative allotment in accustomed time. 2. If the administrator is arise mentally sick. 3. If the administrator be 4. If he bootless to pay the alarm money in amid six months. 5. If the administrator was absent in affair of lath of admiral afterwards permission. 6. If the administrator accomplish any acceding afterwards the permission of lath of directors. 7. If the administrator circuitous in any actionable work. 8. If the administrator circuitous in crime. 3. Removal by government: Administrator can be removed from his column by government and additionally by shareholders and creditors with the advice of government. 7. What is an commodity of association? Accessories of Association
The Accessories of Affiliation is the added important affidavit of Collective Banal Company. It contains the rules and regulations for the centralized management, administering and alignment of the company. They ascertain the power, rights and duties of admiral or alternative admiral of the aggregation and adapt the relations amid the aggregation and its members. The basic purpose of accessories of affiliation is to assassinate the commodity article of the memorandum. “Articles are the centralized laws of a company. Commodity devise agency for the centralized administering of the company. ” ---Lord Brobene The accessories of affiliation are the regulations or bye-laws which administer the centralized administering and conduct of the diplomacy of the company. ” ---M. C. Shukla It charge be affected aural the items of the announcement of affiliation and accoutrement of the Aggregation Act. A aggregation bound by shares (Public Bound company) may accept ‘Table A’ a model-Article as provided by Aggregation Act as its articles. But a Clandestine Bound aggregation or a aggregation bound by agreement charge accept their own articles. 8. What is ‘Certificate of commencement’? A clandestine aggregation can arise business anon afterwards the admission of Affidavit of Incorporation.
A accessible aggregation cannot arise business until it obtains a ‘Certificate of Commencement’ in accession to the ‘Incorporation Certificate’ from the annals of companies. At aboriginal accessible bound aggregation abide a appliance to agent according to Aggregation Act 1994 Section- 4. If all the responsibilities are performed by accessible bound aggregation accurately again agent gives a letter or affidavit to accessible bound company. The diplomacy which are included in affidavit of admission are declared at below: 1. Name and abode of registered office. 2. Arising date of Affidavit of commencement. 3. Date of Commencement. 4. Affidavit no. 5. Appointment seal. 6. Name and profession of agent with allowance and signature. 7. Description of conditions. (If exists. )
The ‘Certificate of commencement’ is issued in favour of a accessible aggregation by the registrar, alone aback the afterward altitude are fulfilled: 5. Describe the advantages of accessible bound aggregation than clandestine bound company. Clandestine bound company: A clandestine aggregation is an congenital anatomy registered beneath the Companies Act with three important corresponding accoutrement in the ‘Articles of association’. Accessible bound company: A accessible bound aggregation is an affiliation consisting of seven or any college cardinal of members, which is registered beneath the Companies Act. The advantages of accessible bound aggregation over clandestine bound aggregation are declared at below: 1. Liability: In accessible bound business the accountability of anniversary allotment holders are bound by their shares.
But, in clandestine bound aggregation the accountability of shareholders is huge. 2. Acceptable capital: The shareholders of accessible bound aggregation are added than clandestine bound company. So, accessible bound aggregation enjoys added basic than clandestine bound company. 3. Membership: In accessible bound aggregation there is no high absolute to the cardinal of members. But, in clandestine bound aggregation it is limited. 3. Banking resources: Accessible bound aggregation about refers a huge organization. So, accumulating of banking assets is analogously added than clandestine bound company. 4. Economies of ample calibration production: Huge banking assets advance to a astounding advance in the admeasurement of the company.
Economies may chronicle to greater analysis of labour, specialization, added able use of resources, aggregate acquirement of raw abstracts at lower prices etc. Clandestine bound aggregation can’t get acceptable advantages as like as accessible bound company. 5. Ample size: Clandestine bound aggregation is not a ample admeasurement business. It about accustomed in one specific area. Accessible bound aggregation is a ample calibration business. It has branches at all over. 6. Transerferibility of shares: The shares of clandestine bound aggregation are not calmly transferable. But, the shares of accessible bound aggregation are artlessly transferable. 7. Abiding succession: Accessible bound aggregation is formed by law.
So, it the aggregation is not actuality bankrupt for the poor activity of shareholders. But, clandestine bound aggregation can be bankrupt on its assessable condition. 8. Accessible confidence: Accessible bound aggregation is anon accompanying with public. So, they can access aplomb of public. But, in clandestine bound aggregation this achievability is not exist. 9. Conception of employment: Pubic bound aggregation is a huge company. So, the befalling of conception of appliance is added than clandestine bound company. 10. Research: Accessible bound aggregation consistently tries to administer their accessories worldwide. So, they consistently analysis to advance their artefact added and more. In that case clandestine bound aggregation is not so superior.
Finally we can say that accessible bound aggregation is added avant-garde than clandestine bound company. But, clandestine bound aggregation has enjoyed some appropriate advantages which can’t be enjoyed by accessible bound company. Claim or Advantages of a aggregation anatomy of alignment The afterward are the claim of a collective banal aggregation – 1. Accumulation of huge banking assets : The aggregation anatomy of business facilitates mobilization of ample amounts of basic for advance in industries. 2. Economies of all-embracing assembly : The aggregation anatomy of business can adore all the allowances of all-embracing assembly such as minimum aggregate of assembly and best profit. 3.
Scope for amplification : A aggregation can calmly aggrandize its authoritative capacities and banking resources. It has abundant abeyant for about-face and growth. 4. Stability of actuality : The alignment of a aggregation as a abstracted acknowledged commodity gives it a appearance of continuity. As an congenital body, a aggregation enjoys abiding existence. 5. Transferability of shares : The shares of a accessible aggregation are advisedly transferable. The shareholders are at abounding alternative to actuate of their shares to any actuality they desire. 6. Democratic ascendancy : The aggregation is managed on the assumption of democracy. The boards of admiral who administer the aggregation are adopted by the shareholders.
The admiral are amenable and answerable to the shareholders. 7. Authoritative adeptness : A aggregation can defended the casework of awful able bodies who are experts in adapted fields of business management. 8. Stimulation to accumulation and investments : The aggregation is an able media of mobilizing the broadcast accumulation of the affiliation and advance these accumulation for bartering purposes. Insurance companies, banks and alternative banking institutions advance their money in the shares of adapted collective banal company. 9. Tax abatement : The aggregation enjoys greater tax abatement as compared to alternative forms of business. Aggregation pays lower tax on a college assets as it pays tax on the collapsed rates. 10.
Diffused accident : The associates of a accessible aggregation is large. The business accident is disconnected amid several associates of the company. 11. Approved adjustment and ascendancy : Accumulation and alive of companies are able-bodied adapted by the accoutrement of the Aggregation Act. These austere regulations aegis the interests of shareholders and bodies who accord with the company. 12. Accessible aplomb and acceptance : A aggregation is guided and controlled by austere regulations and government control. These ensure accessible aplomb and popularity. 13. Social responsibilities : Due to the actuality of the aggregation anatomy of business, affiliation is benefited in adapted ways.
So we can say that the collective banal aggregation constitutes an important advance in the avant-garde arising bartering anatomy with its adapted advantages. Demerits or disadvantages of Collective Banal Aggregation The afterward are the disadvantages of a collective banal aggregation – 1. Adherence of too abounding acknowledged formalities : The accumulation of a aggregation requires adherence of too abounding acknowledged formalities. The enactment and active of a aggregation would prove to be alarming because of complicated acknowledged regulations. 2. Concentration of adeptness in few easily : Shareholders of the aggregation accept about no say in the diplomacy of the company. The admiral of the aggregation become self-centred and they do not affliction for shareholders. 3.
Excessive Government ascendancy : A aggregation has to beam too abounding accoutrement of adapted laws imposed by the government. 4. Undue belief in shares of the aggregation : Undue belief in shares of a aggregation is abusive to the interests of the shareholders. 5. Counterfeit administering : The promoters and admiral may allow in counterfeit practices. The arrant admiral may present a aflush account of the aggregation in its anniversary report. 6. Bureaucratic ascendancy : Quick decisions and alert activity are absent in the administering of a company. It makes a aggregation an adamant enterprise. 7. High bribery : In companies, advisers are alleged not on the base of adeptness but on the base of claimed absorption of the management. 8.
Inflexibility in administering : A aggregation cannot bound acclimatize with the alteration altitude in the bazaar because of its circuitous anatomy and acknowledged obligations. 9. Monopolistic ascendancy and corruption of consumers : Collective banal companies facilitate accumulation of business combinations which ultimately advance to monopolistic ascendancy and corruption of consumers. 10. Social abuses : Evils of branch arrangement like installation, pollution, bottleneck of cities are attributed to the aggregation anatomy of organization. Moreover, the abutting and affable accord amid the administering and advisers is difficult to maintain. Accumulation of Collective Banal Aggregation Collective Banal Aggregation is formed beneath the Aggregation Act followed by the country breadth the aggregation is established.
In Bangladesh a collective banal aggregation whether a accessible or a clandestine may be formed by allotment beneath the Aggregation Act 1994. The able activity of aggregation accumulation in any country may be disconnected into three Audible stages – a. Promotional date : The activity of conceiving an abstraction and developing it into a accurate of activity to be able by the assimilation and floatation of aggregation is alleged promotion. The cardinal of apostle in Accessible Bound aggregation who booty all-important accomplish are minimum two and best 50 in case of Clandestine Bound aggregation and minimum seven, best contains by allotment in Accessible Bound Company. These are four basic stages in the promotional date of a aggregation – ) Identifying the abstraction : The promoters at aboriginal accept an abstraction and analyze the business opportunities. ii) Detail investigations : Detail investigations of – a. Bazaar activity b. Demand for the accessories c. Estimated aggregate of assembly d. Estimated accumulation allowance e. Basic claim iii) Assembling: Afterwards a through investigations of activity the promoters decides whether they will booty accident or not. iv) Selection of the name of the aggregation and acquiescence : In this step, the aggregation adapt two abstracts – a. Commodity of affiliation b. Announcement of affiliation b. Assimilation date : Aback the promoters can accomplishment the primary arrangements, they administer in assigned from to the annals of collective banal company.
And forth with the application, they abide with the register, the allotment fee as per Table(B) of the Aggregation Act and a archetype of anniversary of the afterward abstracts for the allotment of the company. a. A archetype of the announcement of affiliation b. A archetype of the accessories of affiliation c. A account of nominal basic d. The abode of the registered appointment of the aggregation (selected by the registrar) e. A acknowledgment to the aftereffect that all acknowledged requirements accept been appropriately complied with. Incase of Accessible Bound Aggregation the afterward affidavit is to be estimated – a. A account of admiral b. A accounting challenge of anniversary administrator to act as such and to booty up the abilities shares.
The agent will appraise all this abstracts and if he is annoyed that every affair is in order, he will again access the name of the aggregation on the annals advance his appointment and affair a affidavit accepted as the Affidavit of Assimilation which gives the aggregation a acknowledged existence. c. Floatation date : Aback a aggregation has been congenital it has to accession basic abundantly to arise business and to backpack it on with satisfactory. The Clandestine Bound Aggregation may access this basic from accompany and relatives. A Accessible Bound aggregation raises the greater allotment of the basic from the accepted accessible by arising a prospectus. d. Commencement: A Clandestine aggregation can alpha its business afterwards accepting a Affidavit of Assimilation but a Accessible Bound aggregation cannot. It charge accept accession affidavit accepted as Affidavit of Commencement.
The agent will affair this affidavit on accomplishment of the afterward requirements - a. Minimum cable has been raised. b. The administering has been taken up and paid for their accomplishment shares. c. The announcement on the account in lieu of announcement has been filled. d. A acknowledgment has been fabricated to the aftereffect that all acknowledged requirements accept been appropriately complied with. It is to be acclaimed that, a Accessible Bound aggregation is to alpha business aural one year from the date of accepting the Affidavit of Commencement. Announcement of affiliation According to Aggregation Act 1994 – “Memorandum agency the announcement of affiliation of a aggregation as originally formed or as adapted in aftereffect of this Act. "
According to Lord Cairns – “The announcement of affiliation of a aggregation is its allotment and it defines the limitation of the adeptness of the company. ” So we can say that the announcement governs the accord of the aggregation with the alfresco apple and it is the foundation aloft which the super-structure of the aggregation is built. Commodity of Announcement of affiliation 1. Name commodity : The name of the proposed aggregation is mentioned in this clause. The name of a aggregation charge end with the chat ‘Limited’ the chat ‘Public Ltd” and the chat “Private Ltd”. All the time of selecting the name of the aggregation the apostle should chase the afterward things – d. The name should not be identical with the name of any absolute company. e.
The name should not actualize and consequence that the aggregation is accustomed on the business of some alternative absolute companies. f. The name should exclude words like crown, emperor, empire, admiral or prime minister’s name. 2. Abode commodity : The announcement charge accommodate the abounding abode of the annals office. 3. Commodity commodity : This is the best important commodity in the announcement which states what the aggregation can do. The commodity charge accommodate all the accessible curve of business in which aggregation is acceptable to be engaged. Usually this commodity is so drafted that the aggregation may adore avant-garde fields for activities in future. 4. Accountability commodity : This commodity states the attributes of accountability of the associates of the company. d.
Incase of a aggregation bound by shares, member’s accountability is bound to face aggregate of the shares. It agency that aback the shares are absolutely paid up, associates are chargeless from any liability. e. Incase of a aggregation bound by guarantee, the accountability commodity charge accompaniment the admeasurement of accountability of anniversary alone affiliate in the accident of its actuality anguish up. f. Incase of an absolute company, the accountability commodity does not arise in the announcement of association. 5. Basic commodity : This commodity states the aggregate of basic with which the aggregation is registered or accustomed to conduct business and the analysis of basic into disinterestedness allotment and alternative allotment basic should be mentioned. 6.
Association commodity : This commodity contains a acknowledgment by the person(promoter) who active the announcement to anatomy the aggregation in a acknowledged way for a acknowledged purpose and to booty minimum allotment of the company. Accessories of Affiliation The Accessories of Affiliation is the added important affidavit of Collective Banal Company. It contains the rules and regulations for the centralized management, administering and alignment of the company. They ascertain the power, rights and duties of admiral or alternative admiral of the aggregation and adapt the relations amid the aggregation and its members. The basic purpose of accessories of affiliation is to assassinate the commodity article of the memorandum. It charge be affected aural the items of the announcement of affiliation and accoutrement of the Aggregation Act.
A aggregation bound by shares (Public Bound company) may accept ‘Table A’ a model-Article as provided by Aggregation Act as its articles. But a Clandestine Bound aggregation or a aggregation bound by agreement charge accept their own articles. Clandestine Bound Aggregation A clandestine aggregation is an congenital body, registered beneath the Aggregation Act with three important akin accoutrement in its ‘Articles of Association’. A clandestine aggregation is one which – 1. Restricts the rights of its associates to alteration their shares in the company. 2. Limits the cardinal of its associates to fifty. 3. Prohibits any allurement to the accessible to subscribe for any shares or debentures of the company.
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