Companies Act, 2013 — Foundations You Must Know
Definitions, types of companies, MoA & AoA, board meetings, AGM, and OPC rules — these 6 sub-areas drive most of the Paper 2 questions on the Act.
Last reviewed: 25 April 2026
Types of companies (Sec 2)
- •By liability: limited by shares / by guarantee / unlimited.
- •By incorporation: statutory / registered.
- •By size: Small Company (≤ ₹4 cr capital AND ≤ ₹40 cr turnover, with exclusions).
- •By membership: Private (2–200 members) / Public (≥ 7 members) / OPC (1 member).
- •Section 8: not-for-profit (charity, education, science).
MoA vs AoA
- •Memorandum (MoA): the company's charter — defines its scope and powers vis-à-vis outsiders. Six clauses: Name, Registered Office, Object, Liability, Capital, Subscription.
- •Articles (AoA): internal rules of management. Subordinate to MoA.
- •Doctrine of ultra vires: any act beyond MoA powers is void.
- •Doctrine of indoor management: outsiders aren't expected to verify internal compliance — the company is bound by acts that appear regular.
Incorporation (Sec 7)
- •File MoA + AoA + declarations + address proofs + DSCs with the ROC.
- •ROC issues Certificate of Incorporation — conclusive evidence of formation.
- •PAN, TAN, EPFO, ESIC, GSTIN registrations are bundled in the SPICe+ form.
Board meetings & quorum (Sec 173–174)
- •First Board Meeting: within 30 days of incorporation.
- •Minimum 4 Board Meetings per year, gap not exceeding 120 days between two.
- •Quorum: 1/3 of total directors OR 2 directors, whichever is HIGHER. Interested directors don't count for quorum.
- •Video conferencing allowed for all matters except those mentioned in Rule 4 of Companies (Meetings) Rules, 2014.
Annual General Meeting (Sec 96)
- •First AGM: within 9 months of end of first financial year.
- •Subsequent AGMs: within 6 months of FY end AND within 15 months of previous AGM.
- •Notice: 21 clear days (Sec 101). Shorter consent: members holding ≥95% paid-up capital can agree to a shorter notice.
- •OPC is exempt from holding AGMs.
OPC (Sec 2(62), Sec 3, Rule 3)
- •Exactly 1 member, 1 director (can be the same), and 1 nominee.
- •Convert to Private/Public if paid-up capital > ₹50 lakh OR turnover > ₹2 cr (3-yr avg).
- •Cannot carry on NBFC investment activities.
- •Cannot be Section 8 (non-profit).
Must know before the exam
- ★MoA can be altered by special resolution (Sec 13). AoA can be altered by special resolution (Sec 14).
- ★Annual Return (Form MGT-7): file within 60 days of AGM (Sec 92).
- ★Financial Statements (Form AOC-4): file within 30 days of AGM (Sec 137).
- ★Doctrine of constructive notice: outsiders are deemed to know the contents of MoA & AoA (filed with ROC, public record).
Common mistakes & fixes
- ✗ Including interested directors in the board-meeting quorum count.
- ✓ Sec 174 — interested directors are excluded for that particular item.
- ✗ Saying AoA prevails over MoA.
- ✓ MoA is supreme. AoA is subordinate; any conflict is resolved in favour of MoA.
Lock it in with practice
Reading without practising is the #1 reason people forget in the exam. Solve a quick set while this is fresh.