Absolute Beginner Guide.
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Re: How Law Enforces Transparency in Companies
amazing, wonderful posts, helps a beginner to understand the concept more clearer, thanks a million, and keep up this amazing work.. thanks once again
Every company has a clause "Registered Office", where the companies registered office is located. This is identified as primary address for the company. For every company, it is a must to print the address of registered office in every communication, say letter heads, quotes for business etc., irrespective of the branches it has.
If the company wants to open a new branch, the board must pass a resolution saying so, and must be filed with Govt. (ROC). At any point of time, if the company wishes to change the address of registered office, it can not just shift the office like a other forms of business.
It must give a a notification in newspaper, the ROC would wait for a period, say 2 months, to see if there would be any objection, complaint arises.
Just imagine how could the law keep hold when it comes for closing a company. Such a thing would go under standard procedures. Say the company could have liabilities, could have received advance payments in business etc.,
The object of Companies Act is to make it transparent to the eye of a share holder or a customer, that how the company operates.
Now, our friends, A, B and C have been doing the business successfully for some years. Now the the business has grown. There are other directors have been appointed as the company has expanded its operation and so needs specialized skills for management.
On its success path our company has now got say some 10 directors for 10 distinct departments. Remember the point that the directors could be mere employees. When our imaginary company wants to motivate the employees it allots shares to them under "Employees Stock Option", the section of law that allows allotment of shares among employees. Again I suggest let us not digg into the details as this series could turn more like a course on companies law
What if our company wants to expand its business activity?
Let us not name A, B and C as we earlier did. Because, now there are many directors. We know whether they hold shares or not, collection of such directors which called Board of Directors is suppose to take any decision by majority opinion. So from this point we call them as "Board" (Board of Directors).
And again, we don't know whether A is the managing director yet and, we may not surprise at this point if A, B or C is not even at the Board.
And now, we can understand the fact that the Board of Directors has the supreme power in the organization. If there are many directors who are also share holders of the company (in public limited companies it is expected), there is always a chance for politics of power.
Ok. Let us come to the point.
If our company wants to expand its business activity, the Board must come out with a resolution for such an expansion.
Now let us consider two aspects of a business expansion.
1. Diversified business activity (entering into new fields of commerce)
2. Need of Huge Capital
Let us discuss these in next post, probably tomorrow if not today
If the company wants to open a new branch, the board must pass a resolution saying so, and must be filed with Govt. (ROC). At any point of time, if the company wishes to change the address of registered office, it can not just shift the office like a other forms of business.
It must give a a notification in newspaper, the ROC would wait for a period, say 2 months, to see if there would be any objection, complaint arises.
Just imagine how could the law keep hold when it comes for closing a company. Such a thing would go under standard procedures. Say the company could have liabilities, could have received advance payments in business etc.,
The object of Companies Act is to make it transparent to the eye of a share holder or a customer, that how the company operates.
Now, our friends, A, B and C have been doing the business successfully for some years. Now the the business has grown. There are other directors have been appointed as the company has expanded its operation and so needs specialized skills for management.
On its success path our company has now got say some 10 directors for 10 distinct departments. Remember the point that the directors could be mere employees. When our imaginary company wants to motivate the employees it allots shares to them under "Employees Stock Option", the section of law that allows allotment of shares among employees. Again I suggest let us not digg into the details as this series could turn more like a course on companies law
What if our company wants to expand its business activity?
Let us not name A, B and C as we earlier did. Because, now there are many directors. We know whether they hold shares or not, collection of such directors which called Board of Directors is suppose to take any decision by majority opinion. So from this point we call them as "Board" (Board of Directors).
And again, we don't know whether A is the managing director yet and, we may not surprise at this point if A, B or C is not even at the Board.
And now, we can understand the fact that the Board of Directors has the supreme power in the organization. If there are many directors who are also share holders of the company (in public limited companies it is expected), there is always a chance for politics of power.
Ok. Let us come to the point.
If our company wants to expand its business activity, the Board must come out with a resolution for such an expansion.
Now let us consider two aspects of a business expansion.
1. Diversified business activity (entering into new fields of commerce)
2. Need of Huge Capital
Let us discuss these in next post, probably tomorrow if not today
I HAVE TRIED to find posts which reflect and tech you about technical analysis
but i have found none here.
can't anyone produce a simple but knowledgeable technical analysis thread here
also if i confirmed on a stock that "much units i have bought"
and get those units at different price than u had confirmed at the time of buying
which normally happens can't we choose some fix price
i know market change every second but still isn't it some sort of inconvenience for smal scale traders
but i have found none here.
can't anyone produce a simple but knowledgeable technical analysis thread here
also if i confirmed on a stock that "much units i have bought"
and get those units at different price than u had confirmed at the time of buying
which normally happens can't we choose some fix price
i know market change every second but still isn't it some sort of inconvenience for smal scale traders
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