Section 2 of CA 2013 : Section 2: Definitions

CA 2013

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Explanation using Example

Imagine a scenario where a startup called "Tech Innovate Pvt. Ltd." is preparing to raise funds for its expansion. The company decides to issue shares to the public and for this purpose, it needs to create a prospectus. However, to comply with the regulations set by the Securities and Exchange Board of India (SEBI), they prepare an "abridged prospectus" which contains the key features of the full prospectus. This abridged version is easier for potential investors to understand and is in line with the definition provided in the Companies Act, 2013.

As part of their financial management, "Tech Innovate Pvt. Ltd." maintains detailed "books of account" showing all their financial transactions, sales, and the company’s assets and liabilities. This meticulous record-keeping is necessary to meet the accounting standards as referred to in the Companies Act.

Moreover, the startup has a sister concern named "Green Solutions Pvt. Ltd." in which "Tech Innovate Pvt. Ltd." holds a 25% voting power and participates in key business decisions. According to the Act, "Green Solutions Pvt. Ltd." is considered an "associate company" of "Tech Innovate Pvt. Ltd." due to the significant influence exerted by the latter.

Lastly, the Board of Directors of "Tech Innovate Pvt. Ltd." decides to "alter" the articles of association to include provisions for the issuance of new types of shares. This alteration is done in accordance with the Act, which includes making additions to the existing articles of the company.

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