Meaning of a Company and the Companies Act, 2013

Company law is the branch of law that governs how a business can organise itself as a company, how such a company is formed, managed, and, if needed, wound up. In India, the principal statute governing companies today is the Companies Act, 2013, administered by the Ministry of Corporate Affairs (MCA), which replaced the earlier Companies Act, 1956. This chapter looks at the legal meaning of a company, the different kinds of companies the Act recognises, the two foundational documents every company must have (the Memorandum and Articles of Association), how a company is actually brought into existence (incorporation), and how a public company raises capital from the general public through a prospectus. How a company is subsequently managed — its Board of Directors, meetings, and resolutions — and the role of the Company Secretary are studied separately as their own topics; this chapter is confined to formation and the general legal framework.

Section 2(20) of the Companies Act, 2013 defines a "company" simply as a company incorporated under this Act or under any previous company law. This definition is circular by design — it tells us that a company is, first and foremost, whatever the Act itself has formally registered as one. A business does not become a "company" merely because it is large or because many people have invested in it; it becomes a company only when it is incorporated (registered) with the Registrar of Companies (ROC) in the manner the Act prescribes.

The Act also uses a related but wider term, "body corporate", defined in Section 2(11). A body corporate includes a company incorporated in India or outside India, but it specifically excludes a co-operative society, and any other body the Central Government may, by notification, specifically exclude. Every company is therefore a body corporate, but not every body corporate is a company in the sense the Act uses the word — a statutory corporation created by a special Act of Parliament, for instance, is a body corporate without being a "company" registered under the Companies Act.

TN's Commerce syllabus, like every Indian commerce curriculum — including what CBSE's own NCERT Class 11 Business Studies unit on "Forms of Business Organisation" also teaches — is grounded in this same central statute, the Companies Act, 2013; the underlying legal rules do not change from board to board, only how a syllabus sequences and presents them.