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100 Company Law & Corporate Compliance FAQs Every Startup Founder, Director, Entrepreneur and Investor in India Should Know

 

100 Company Law & Corporate Compliance FAQs Every Startup Founder, Director, Entrepreneur and Investor in India Should Know

FAQ 2001

Q. What is Company Law?
A. Company law governs the incorporation, management, regulation and dissolution of companies.

FAQ 2002

Q. Which law governs companies in India?
A. Companies are primarily governed by the Companies Act and allied rules and regulations.

FAQ 2003

Q. What is a company?
A. A company is a separate legal entity incorporated under law.

FAQ 2004

Q. What is corporate personality?
A. The legal principle that a company has a distinct identity separate from its members.

FAQ 2005

Q. What is limited liability?
A. Liability of shareholders is generally limited to their investment in the company.

FAQ 2006

Q. What is a private limited company?
A. A company with restricted share transfer and limited number of members as prescribed by law.

FAQ 2007

Q. What is a public limited company?
A. A company eligible to offer shares to the public subject to applicable regulations.

FAQ 2008

Q. What is a One Person Company (OPC)?
A. A company incorporated with a single member under applicable law.

FAQ 2009

Q. What is a Section 8 Company?
A. A non-profit company formed for charitable or specified objectives.

FAQ 2010

Q. What is a holding company?
A. A company controlling one or more subsidiary companies.

FAQ 2011

Q. What is a subsidiary company?
A. A company controlled by another company.

FAQ 2012

Q. What is an associate company?
A. A company in which another company has significant influence as defined by law.

FAQ 2013

Q. What is incorporation of a company?
A. The legal process of forming a company through registration.

FAQ 2014

Q. What is a Certificate of Incorporation?
A. Official document evidencing formation of a company.

FAQ 2015

Q. What is Memorandum of Association (MOA)?
A. Charter document defining the company's objectives and powers.

FAQ 2016

Q. What is Articles of Association (AOA)?
A. Internal rules governing company management.

FAQ 2017

Q. Can MOA be amended?
A. Yes, subject to statutory procedures.

FAQ 2018

Q. Can AOA be amended?
A. Yes.

FAQ 2019

Q. What is authorized share capital?
A. Maximum capital the company is authorized to issue.

FAQ 2020

Q. What is paid-up share capital?
A. Capital actually received by the company from shareholders.

FAQ 2021

Q. What is share capital?
A. Money invested by shareholders in the company.

FAQ 2022

Q. What is equity share?
A. Share representing ownership interest in a company.

FAQ 2023

Q. What is preference share?
A. Share carrying preferential rights regarding dividend or repayment.

FAQ 2024

Q. What is share certificate?
A. Document evidencing ownership of shares.

FAQ 2025

Q. What is a shareholder?
A. A person holding shares in a company.

FAQ 2026

Q. What is a director?
A. Person responsible for management and governance of the company.

FAQ 2027

Q. What are directors' duties?
A. Duties include acting in good faith and in the best interests of the company.

FAQ 2028

Q. Can directors be personally liable?
A. Yes, in circumstances recognized by law.

FAQ 2029

Q. What is Director Identification Number (DIN)?
A. Unique identification number allotted to directors.

FAQ 2030

Q. What is Digital Signature Certificate (DSC)?
A. Electronic authentication certificate used for filings.

FAQ 2031

Q. What is Board Meeting?
A. Meeting of directors to conduct company business.

FAQ 2032

Q. What is Annual General Meeting (AGM)?
A. Annual meeting of shareholders held in accordance with law.

FAQ 2033

Q. What is Extraordinary General Meeting (EGM)?
A. Shareholders' meeting convened for special business.

FAQ 2034

Q. What is board resolution?
A. Formal decision passed by the Board of Directors.

FAQ 2035

Q. What is shareholders' resolution?
A. Resolution approved by members of the company.

FAQ 2036

Q. What is ordinary resolution?
A. Resolution passed by the prescribed majority.

FAQ 2037

Q. What is special resolution?
A. Resolution requiring the higher statutory majority.

FAQ 2038

Q. What are statutory registers?
A. Registers required to be maintained under company law.

FAQ 2039

Q. What are statutory compliances?
A. Mandatory legal filings and procedural obligations.

FAQ 2040

Q. Can non-compliance attract penalties?
A. Yes.

FAQ 2041

Q. What is annual return?
A. Statutory filing containing company information.

FAQ 2042

Q. What are financial statements?
A. Statements reflecting the financial position and performance of the company.

FAQ 2043

Q. Is statutory audit mandatory?
A. Subject to applicable law, yes.

FAQ 2044

Q. What is secretarial compliance?
A. Compliance relating to corporate governance and statutory procedures.

FAQ 2045

Q. What is ROC?
A. Registrar of Companies responsible for corporate registrations and filings.

FAQ 2046

Q. Can ROC impose penalties?
A. Yes.

FAQ 2047

Q. What is beneficial ownership?
A. Ultimate ownership or control recognized under applicable law.

FAQ 2048

Q. What is related party transaction?
A. Transaction involving specified related persons or entities.

FAQ 2049

Q. Can related party transactions require approval?
A. Yes.

FAQ 2050

Q. What is corporate governance?
A. Framework for responsible management and accountability of companies.

FAQ 2051

Q. What is oppression and mismanagement?
A. Conduct prejudicial to members or company affairs under company law.

FAQ 2052

Q. Can minority shareholders seek legal remedies?
A. Yes.

FAQ 2053

Q. What is share transfer?
A. Transfer of ownership of shares.

FAQ 2054

Q. Can private companies restrict share transfers?
A. Yes, through their constitutional documents.

FAQ 2055

Q. What is share allotment?
A. Issuance of shares by the company.

FAQ 2056

Q. What is rights issue?
A. Offer of shares to existing shareholders.

FAQ 2057

Q. What is bonus issue?
A. Issue of additional shares without consideration from reserves.

FAQ 2058

Q. What is private placement?
A. Issue of securities to identified persons subject to law.

FAQ 2059

Q. What is ESOP?
A. Employee Stock Option Plan granting eligible employees an option to acquire shares.

FAQ 2060

Q. Can startups issue ESOPs?
A. Yes.

FAQ 2061

Q. What is venture capital investment?
A. Investment in growth-oriented startups.

FAQ 2062

Q. What is shareholder agreement?
A. Contract governing rights and obligations of shareholders.

FAQ 2063

Q. What is founders' agreement?
A. Agreement regulating rights and responsibilities among founders.

FAQ 2064

Q. Should startups execute founders' agreements?
A. Yes.

FAQ 2065

Q. What is due diligence?
A. Legal and financial review before investment or acquisition.

FAQ 2066

Q. What is merger?
A. Combination of two or more companies.

FAQ 2067

Q. What is acquisition?
A. Purchase of ownership or control of a company.

FAQ 2068

Q. What is corporate restructuring?
A. Reorganization of corporate structure or operations.

FAQ 2069

Q. What is winding up?
A. Legal process leading to closure of a company.

FAQ 2070

Q. What is striking off a company?
A. Removal of a company's name from the register in accordance with law.

FAQ 2071

Q. Can dormant companies be revived?
A. Subject to legal procedures, yes.

FAQ 2072

Q. What is NCLT?
A. Tribunal dealing with specified company law matters.

FAQ 2073

Q. Can shareholder disputes be referred to NCLT?
A. Yes, in appropriate cases.

FAQ 2074

Q. What is corporate fraud?
A. Fraud committed in relation to company affairs.

FAQ 2075

Q. Can directors be prosecuted for fraud?
A. Yes.

FAQ 2076

Q. What is independent director?
A. Director satisfying statutory independence requirements.

FAQ 2077

Q. What is key managerial personnel (KMP)?
A. Specified senior officers recognized under company law.

FAQ 2078

Q. What is company secretary?
A. Professional responsible for specified compliance functions.

FAQ 2079

Q. Can companies maintain digital records?
A. Yes, subject to legal requirements.

FAQ 2080

Q. What is corporate compliance audit?
A. Review of legal compliance status of a company.

FAQ 2081

Q. Can startups face penalties for non-compliance?
A. Yes.

FAQ 2082

Q. Should board meetings be properly documented?
A. Yes.

FAQ 2083

Q. Why should companies maintain minutes?
A. Minutes provide an official record of decisions.

FAQ 2084

Q. Can improper documentation create legal risks?
A. Yes.

FAQ 2085

Q. Should shareholder disputes be resolved early?
A. Yes.

FAQ 2086

Q. Can mediation resolve corporate disputes?
A. Yes.

FAQ 2087

Q. Why should startups obtain legal documentation before fundraising?
A. It protects founders and investors.

FAQ 2088

Q. Can legal due diligence increase investor confidence?
A. Yes.

FAQ 2089

Q. Why should companies maintain statutory compliance calendars?
A. To avoid penalties and defaults.

FAQ 2090

Q. Can legal audits improve governance?
A. Yes.

FAQ 2091

Q. Should businesses review contracts regularly?
A. Yes.

FAQ 2092

Q. Can shareholders inspect company records?
A. Subject to applicable law, yes.

FAQ 2093

Q. Can directors resign voluntarily?
A. Yes.

FAQ 2094

Q. Can companies remove directors?
A. Subject to statutory procedures, yes.

FAQ 2095

Q. Why should companies maintain proper accounting records?
A. To comply with legal and financial obligations.

FAQ 2096

Q. When should entrepreneurs consult a company lawyer?
A. Before incorporation, fundraising, restructuring or major transactions.

FAQ 2097

Q. When should directors seek legal advice?
A. Before taking significant governance or compliance decisions.

FAQ 2098

Q. What is the biggest compliance mistake for startups?
A. Ignoring statutory filings and corporate documentation.

FAQ 2099

Q. Why is proactive corporate compliance important?
A. It reduces litigation, regulatory action and investor risk.

FAQ 2100

Q. What is the best strategy for corporate legal compliance?
A. Maintain proper documentation, follow statutory timelines, conduct periodic legal audits and obtain timely professional legal advice.

🏢 Starting a Company? ROC Notice? Shareholder Dispute? Corporate Compliance Issues?

One missed compliance or poorly drafted agreement can cost your business millions. Build your company on a legally strong foundation from day one.

✅ Company Incorporation
✅ Startup Legal Advisory
✅ Shareholder & Founders' Agreements
✅ ROC & MCA Compliance
✅ Board & Shareholder Resolutions
✅ Corporate Restructuring & M&A
✅ NCLT Litigation
✅ Corporate Governance & Legal Audit

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100 Company Law FAQs in India | Corporate Compliance, ROC, Directors & Startup Guide

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Explore 100 FAQs on Indian Company Law covering incorporation, ROC compliance, directors, shareholders, board meetings, startup funding, NCLT, corporate governance and company management.

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