Company: Meaning, Nature and Incorporation of Company

Company

The collective of people who work together is referred to as a corporation. A voluntary association established and structured to conduct business is known as a company. Any entity that does business is a firm. Companies can be organized in a variety of ways. A business might be a single-person operation, a partnership, or a corporation. Depending on the type of business we are dealing with, it may be owned by a single individual or by a number of individuals. In the majority of business forms, the owners (founders) are responsible for any liabilities, which may be limited or unlimited depending on the business type. A company's contribution to the growth of contemporary business is crucial.

The company is an organization of individuals formed under the current company legislation that engages in profitable business. Due to the need for ample cash and other resources, public limited corporations are founded. It is clear that the public limited corporation operates on a vast scale. The business, which is a chartered commercial organization, medieval trade guild, or group of people engaged in the operation of a commercial or industrial venture, produces, acquires, sells, or offers services in exchange for money. The Company Act has been implemented in Nepal in order to facilitate a seamless company expansion. The present company law, known as Corporate Act 2063, was created as a result of various company reforms over time.

Characteristics of a Company:

• Incorporated association
• Voluntary association
• Legal entity
• Permanent existence
• Common seal
• Limited Liability
• Transferability of shares
• Management by representatives
• Contractual capacity
• Registered office

Capital of a company:

• Authorized capital
• Issued capital
• Uncalled capital
• Reserved capital
• Subscribed capital
• Security Bond
• Payment for shares

Incorporation of the company

Company is defined as a company that has been incorporated in compliance with the Nepal Company Act of 2063, Section 2(a). The provision for incorporation of a company is contained in Section 3 of the Act. The following items are listed for the incorporation of a company in Nepal.

• Establishment of the company:
  • A person may incorporate a corporation to pursue one or more of the goals outlined in the memorandum if they choose to engage in any business endeavor with the intention of making a profit. A person can incorporate a business individually or jointly. The shareholders of a firm might vary depending on its size. There should be at least 7 promoters in the case of a public limited corporation.
• Application for incorporation of the company:
  • Anyone who wants to incorporate a business should present the following documents to the office of incorporation together with the application, requisite fee, and format.
    • The company's planned memorandum.
    • The articles.
    • A copy of the contract signed by the promoters before the firm is incorporated.
    • A copy of the permission or license is required if the business is required to obtain previous approval or a license from an authority figure in order to conduct business.
    • A permission letter and a copy of an authentic foreign passport must be provided if the company's promoter is from another nation.
• Registration of the company:
  • The registrar office investigates the application of the proposal of incorporation following the submission of an application for the incorporation of a company, registers the company within 15 days of the application date, and issues the applicant a certificate of company registration. The "certificate of incorporation" is the document that is given to the applicant. No one should do any business through any firm without the company's registration.
• Power to refuse to register the company:
  • If the following criteria is not met or in the following situations, the registrar company may reject the business's registration.
    • If the proposed company's name is used more than once (name has previously registered).
    • If the planned company is unsuitable in the eyes of the general public.
    • If the prerequisite for incorporation isn't met.
    • Whether the new company's goals conflict with the law currently in effect.
• Information of refusal to register:
  • When a registrar firm declines to register a company, the registrar company must provide a justification within 15 days of the application being made. If the registrar office fails to notify the applicant of the rejection or fails to transmit the notice of rejection promptly (within 15 days), or if the applicant who is establishing the company is dissatisfied with the registrar office's decision, the applicant may file a complaint with the court.

Terms and condition followed by registered Public Limited Company

• All business dealings must go through the firm name.
• If a corporation is publicly traded, limited should be written after the company name.
• Shares of a private corporation cannot be sold on a public market.
• A public corporation is not permitted to form a private company or partnership.

Reference:

• Ghai, K. (n.d.). yourarticlelibrary. Retrieved from http://www.yourarticlelibrary.com/essay/law-essay/law-meaning-features-sources-and-types-of-law/40363/
• Shrestha, R. P. (2007). Business Law. Kathmandu: M.K.Books.
• Akrani, G. (2011, 09 2). kalyan-city. Retrieved from http://kalyan-city.blogspot.com/: http://kalyan-city.blogspot.com/2011/02/what-is-cheque-definition-kinds-and.html
• Bragg, S. (2011). accountingtools. Retrieved from www.accountingtools.com: http://www.accountingtools.com/questions-and-answers/what-is-a-bill-of-exchange.html