Company Formation 

A company is a natural legal entity formed by the association and group of people to work together towards achieving a common objective. It can be a commercial or an industrial enterprise. 

Public Limited Company.

A public limited company requires at least 7 members for its incorporation. There is no restriction on the issue or transfer of its shares and this type of company can invite the public to purchase its shares and debentures.

Define Registered Company.

These are those companies, which are formed by registration under the Company Act. The provision of the Company Act, Memorandum of Association, and Articles of Association represent the activities of such companies. Private companies and public companies are examples of Registered companies.

Differentiate between the public and private limited companies.

The difference between public and private companies can be explained on the following basis:

• Numbers of members: In a public company, the minimum number of members is 7 whereas the maximum number is not specified. On the other hand, a single person can establish a private company, and a maximum member is specified.
• Transfer of share: The shareholder of a public company can freely transfer their shares. However, a shareholder of a private company cannot transfer their shares without the consent of other shareholders.
• Issue of Shares: A public company’s shares can be issued openly for all people whereas shares are not openly distributed to the public in a private company.
• Use of the word ‘limited’: A public limited company is compulsory to use the word ‘limited’ at the end of its name. For example, Nepal Bank Limited. In the case of private companies, it is for them to attach ‘private limited’ as the last word in its name.

Features of the company

The main features of a company are as follows:

• Limited liabilities: The shareholder liability is limited to the face value of the shares that they have purchased.
•  Artificial Legal Person: A company is identified as an artificial person recognized by law. It can hold and deal with any type of property of which it is the owner in any way it likes, can enter into contracts, and open a bank account in its name.
• Transfer of shares: The shareholders of the public limited company can transfer their shares freely without the consent of the company and other shareholders. But for the transfer of the shares of a private company, permission has been taken from other shareholders.

 Memorandum of Association (MOA)

A Memorandum of Association (MOA) is the main document of a company. It is the legal document that has to be filed with the registrar of companies at the time of incorporation of the company. It is often called a memorandum and is comprised of fundamental conditions based on which a company operates. 

Article of Association (AOA)

Article of Association (AOA) is the document containing all the rules and regulations to run a company. It defines the overall company’s purpose. It is the document that tells what is the procedure for appointing the board of directors, recording the financial transaction, conducting a general meeting, issuing shares, and so on. It is comprised of rules and regulations that govern the company’s internal affairs.

Prospectus

A company's prospectus is a formal legal document designed to provide information and full details about an investment offering for sale to the public. A public company shall publish its prospectus before issuing its securities publicly.