COMPANIES ACT,2013

(ACT NUMBER 18 OF 2013)

INCORPRATON OF COMPANIES AND MATTERS INCIDENTAL
THERETO

MANMOHANJUNEJA
REGISTRAROFCOMPANIES
NCTOFDELHIANDHARYANA

The word Registrar has been used 292 times in the Act :
19 times up to the index and definition part
273 times in the rest of the Act including Schedules
The word Regional Director has been used f 15 times in the Act
Registrar means a Registrar, an Additional Registrar, a Joint Registrar, a
Deputy Registrar or an Assistant Registrar, having the duty of registering
companies and discharging various functions under this Act; { Section 2(75) }
Regional Director means a person appointed by the Central Government as
a Regional Director for the purposes of this Act. {(Section 441(2)(b)}

INCORPORATION OF COMPANIES
AND
MATTERS INCIDENTAL THERETO

SectionS 3 TO 22

RELAVANTSections..
OnePersoncompany{Section3(1)(c)} NewConcept
MemorandumofAssociation(MoA){Section4(1)}
ReservationofName{Section4(2)to4(5)(i)}
CancellationofName{Section4(5)(ii)}
ArticlesofAssociation(AoA){Section5}
ActtoOverrideMoAandAoA{Section6}
IncorporationofCompany Particulars,documentsandinformationtobefiledwithROC{ Section7}
FormationofCompanieswithCharitableobjects{Section8}
CommencementofBusiness{Section11}
RegisteredofficeoftheCompanyandchangeofRO{Section12}
AlterationofMOAandAoA{Section13,14and15}
RectificationofName{Section16}
CopiesofMOA,AOAetc.toMembers(Section17)
ConversionofCompaniesalreadyregistered{Section18}
SubsidiarycompanynottoholdsharesinitsholdingCompany{Section19}
ServiceofDocuments{Section20}
MannerofAuthenticationofDocuments{Section21}
ExecutionofBillsandHundies{Section22}

TYPES OF COMPANIES

One Person Company { Section 3(1)(c) }- New Concept

Means a company which has only one person as a member [ Section

2(62)]

One Person company can be registered only as a Private Company

[3(1)(c) ]

MoA to name another person who shall become the member in case of
death or incapacity of the subscriber .

Prior Written consent in the prescribed form of such other person is

required.

Provisions to change and intimation to Registrar for changes.

In Case of death of Subscriber , the person so names , shall become

member of OPC.

OPC-RULES
Only Natural Persons who are Indian Citizens and
Residents in India.
182 days stay in India in preceding one financial year
Only five OPCs by one person
Forms and timings prescribed to intimate the
registrar
Penal provisions for default
OPC mandatory conversion to Private or Public if
paid up capital exceeds 50 lakh or Average turnover
in 3 preceding years exceeds 2 Crore To convert
within 6 months

Other Types of Companies

Public Companies Minimum of Seven persons { 3(1)(a) }, minimum

paid up Capital Rs. 1 lakh or Higher sum as prescribed [ Section
2(71)]

Private Company Minimum Two Persons [ 3(1)(b) ] and Maximum

200 members, Minimum Paid Up Capital Rs. 1 lakh or Higher sum as
prescribed [ Section 2(68)] Notified wef 12.09.2013

Deemed Public Company : Subsidiary of a Public Company deemed to

be public even if its articles continues to be a Private Company [
proviso to Section 2 ( 71) ]

Listed Companies defined [ Section 2(52)] A company has any

securities listed on any recognized Stock Exchange.

Small Company Defined : Section 2(85)]

Means, other than a public Company, which has :
Paid up Capital < Rs.50 lakh or such

higher sum as

prescribed which shall not be > Rs.5 Crore .

Turnover as per last PL Account < 2 Crore or such higher
amount as may be prescribed which shall not be > Rs. 20
Crore.
Concept of small company not applicable to holding,
subsidiary , Section 8 Companies
corporates under Special Acts

and companies, body

MoA- { Section 4(1) } & AoA [ Section 5]

Objects for which incorporated and matters necessary in furtherance thereof

present requirements of Sub-Sections main, incidental and others dispensed
with .

Liability of members to contribute in guarantee companies prescribed

Format of MOA for different type of companies given in tables A to E of

Schedule I

Entrenchment Provisions provided in Section 5 for Articles to provide more

restrictive procedure than passing a special resolution for altering certain
provisions in the AoA.

Companies can adopt all any or all regulations in the model AoA for Different
types of Companies as in Table F, G,H,I and J in Schedule I .

Act to Override MoA and AoA {Section 6}

MOA- Rules

Elaborate Rules for drafting, signing and witness.

Clear rules for documents from foreign countries
KYC for subscribers utility bills must for address
Prof of nationality
Specimen signatures attested by bankers
Director ship and details of promoter in other
companies for subscribers

Reservation of Name { Section 4(2) to 4(5) (i)}- Power of the Registrar

Name not to be identical with or too nearly resembling with an

existing company

Name be not such;

which will constitute an offence to any law for the time being in
force
Which is undesirable in the opinion of Central Government .
Any word giving Government patronage or such word as
prescribed

not allowed unless prior permission of the CG is

there
Name to be reserved for 60 days only

Cancellation of Name { Section 4( 5)(ii)}- A New Concept

If applied by furnishing wrong and incorrect information, the

Registrar shall :
Before Incorporation -Cancel name and

penalty to the

applicant which may extent to Rs. One Lakh .

After incorporation- either direct the company

change

name within 3 Months , take action for striking off the name
of the company or make petition for winding up

NAME RESERVATION RULES-GUIDELINES

Existing guidelines adopted
Some more added- significance, details of
existing unincorporated concerns in the same
name , etc.
Words requiring prior approval of government
prescribed.
Change of name must in 6 not on change of
objects if not depicting activity

Incorporation of Company Particulars, documents and

information to be filed with ROC
{ Section 7 }

MoA Signed in the prescribed manner.

Declaration

by

Advocate/CA/CS/CWA

in

practice

AND

by

Director/Manager/Secretary named in the Articles.

Affidavit from each Subscriber and first Directors that he has not been convicted
of the stated offences in last 5 years and the information given is correct and
complete .

Address of Correspondence till RO established.

Particulars, address, ID and Residential Proof of each subscriber and director in

the prescribed manner ( KYC norms of subscribers and directors)

Interest of Directors in other Firms and Bodies corporates and their consent in
prescribed form and manner .

Duty of the Company to preserve and keep at RO the office copies of documents as
originally filed with ROC till the dissolution.

Formation of Companies with Charitable objects

{Section 8 }
(Corresponding to present Section 25 Companies)

Powers of CG on Satisfaction .

Purposes of sports, education, research, social welfare and environment protection added.

Persons ( means OPCs permitted) and AoPs permitted to get Section 8 companies
incorporated .

Powers of CG to revoke License on contraventions of the requirements in Section 8 (1)( a) to

( c ) and the conditions attached to license and ALSO if the affairs a fraudulent , violative
of objects and against public interest

On revocation CG can direct winding up of the company or amalgamation with another

company registered under this Section having similar objects. With such constitution,
liabilities, duties properties etc.

Thus a more stringent regime for such companies

Section8CompaniesRules
PowersdelegatedtoROC
PublicationismustObjectionswithin30days
Registrarhaspowerstoaddconditionstothe
licenceandinMOA
Conditionsforconversionprescribed Powers
withRDs
Intimationofrevocationmandatory

Registered Office of the Company and change of RO

{ Section 12 }

RO to be established within 15 days from incorporation.

Furnish verification of RO to Roc within 30 days of incorporation in the prescribed
manner

Name and RO Address to be displayed

out side EVERY office and place where

business is carried in local language also and name on seal

Name ,address, CIN with Phone , fax if any , email and website on all official
publications, letters, bill etc.

Names changed in last two years also to be displayed with its name( disclosure of
former names also )

One Person Company in brackets with name in case of OPCs.

Change of RO out side local limits etc. by Special resolution, within state from one Roc
to Another with RD Permission and from one State to another with Cg permission.

REGISTERED OFFICE Rules

Verification- All existing requirements of furnishing documents

for proof of RO mandatory .
Utility bills not older than 2 months mandatory
List
of
all
companies
with
CIN
having
same
unit/tenement/premises to be furnished
Change of RO with the same state with sanction from RD
Publication one month prior to application is must, service of
individual notice on each debenture holder and creditor.
Elaborate rules for shifting from one state to another
application with CG

Alteration of MOA and AoA { Section 13 , 14 and 15 }

and
Rectification of Name { Section 16 }

Exit option to dissenting shareholders in case of change of objects by

companies raised money from public by prospectus and still having
unutilized money .

Special resolution and Details as prescribed and justification of change

to be published in news papers and website also in such cases

Conversion of public to private with the approval of Tribunal

Rectification of name under Section 16 with approval of CG on the same

lines as existing Section 22 with a change that the time to apply on the
basis of trade mark reduced to 3 years from existing 5 years.

Commencement of Business
{ Section 11}

Now mandatory for all companies having share capital .

Such companies cannot exercise borrowing powers and commence business

unless:
Filed Declaration as prescribed is filed, minimum capital is maintained
as paid, all subscribers have paid the value of shares subscribed
Filed with ROC a Verification of the RO as per Section 12(2)
ROC can Remove the name of the company if declaration is not filed with
180 days from incorporation and has reasonable cause to believe that
company is not carrying on any operation in addition to penal action
under11(2).

CAUTION !

Furnishing False

or incorrect or suppression of material information in the

documents for incorporation of company attracts action under Section 447 i.e.
Punishment for Fraud .[ Section 7(5) ]

Without prejudice to Section 7(5) , if it is found at any time after incorporation

that the company was got registered by giving false or incorrect information or
by suppression. The first directors, the promoters and the person giving
declaration . Each, shall be liable for action under Section 447 [ Section 7(6)].

Section 212(6) offences under Section 7(5) and 7(6) are cognizable offences.

Without prejudice to above, in such cases, the Tribunal , on application filed

with , may pass orders for regulation of management , changes in MoA, direct
that liability shall be unlimited, removal of name of the company , or such order
as deem fit , after giving the company an opportunity of being heard.

PROSPECTUS AND ALLOTTMENT OF SECURITIES

[CHAPTER III] SectionS 23 TO 72

Greater clarity in Public and Private Offers

Stringent and clear provisions for Private placement including filing of return with ROC [Section 42(9)]

Clarity in of powers vested with SEBI and CG

More disclosures in Prospectus/RHP/Shelf prospectus filed with ROC

GDR defined and regulated

Return to be filed with ROC on variation of rights of the shareholders [ Section 48 ( 4)]

Notice to ROC on alteration of share capital i.e. increase in AC and also Redemption of Preference Shares .[
Section 64 ]

Securities replaced with shares thus includes other types also

Return of allotment to be filed with ROC for all securities allotted and not just shares

Notice by Tribunal to ROC on application filed for Reduction of Capital.

Filing for Buy Back Declaration of Solvency and return on completion

Penalty for FRAUD under Section 447 for offences under Sections 34, 3638(1) 46(5) 56(7) , 66(10)
which are Cognizable under Section 212(6) .

ACCEPTANCE OF DEPOSITS
[ CHAPTER-V SectionS 73 TO 76 ]

Prohibitionsonacceptingpublicdeposits astringentregime

Acceptancefrommembersrequires:
IssueofcirculartomembersandfilingwithROC
Depositof15%ofdepositmaturinginFYandFYnextinScheduledBankas
Depositrepaymentreserve.ThisReservecannotbeusedforanyother
purpose
Depositinsurance
CertificationthattherehasbeennodefaultinrepaymentofDepositsand
interest
Mayprovidesecurityandcreationofcharge

Deposits Cont..

On failure , any depositor can approach tribunal seeking order for repayment and
also for damages.

To File a Return with the Registrar with 3 Months for all Deposits before
commencement of this Act and remaining Unpaid. These Deposits to be Repaid
within one year or the date becomes due whichever earlier.[ Section 74]

Damages for fraud and unlimited liability : Section 75 provides for punishment
for fraud under Section 447 on failure to repay and if proved that deposits
were accepted with intent to defraud-

Deposits from others : Only public companies allowed by CG as per Rules can
accept Deposits.

REGISTRATION OF CHARGES
CHAPTER-VI [ SectionS 77 TO 87 ]
ROC can condone delay of up to 300 days in filing
of charges with Additional fee
On failure of company the charge holder can apply
and Registrar can register ( Section 78 )

Same time for satisfaction but the ROC shall give

notice to the Charge holder for objection and
register if no objection ( Section 79)

Powers of further condonation with CG

MANAGEMENT AND ADMINISTRATION

CHAPTER VII [ SectionS 88 TO 122]

DeclarationofbeneficialinteresttobefiledwithROC

MoredisclosuresinAnnualReturn

ARtobefiledwith60daysandwithAFaspertimeonSection403andpenaltybeyond270days.

Higher fine minimum fine prescribed more fine for officer in default. Fine prescribed for CS in practice on wrong
certification.

Returntobefiledforchangesinsharesheldbythepromoters andtop10shareholdersstakewith15daysfromchange.[
Section93]

RegistersatROorotherplacebySpecialresolutionandadvance intimationtoRegistrar[Section94]

ExtensionofAGMupto3months SameProvisions.

Filingofspecialresolutionswith30days SameProvisionsBUTFailureattractsminimumfineoffivelakh Rupeesand

mayextendto25lakhsforcompanyandMinimum1lakhandmaximum5lakhforofficerindefaultincludingliquidator
[Section117]

Listed Companies to prepare a report on AGM and file copy with Registrar [ Section 121] minimum one lakh fine for
failure

DECLARATION AND PAYMENT OF DIVIDENDS

CHAPTER VIII [ Section 123 TO 127]

Deletionofrequirementtotransferspecifiedpercentageofprofitsnotexceeding
10%toreserves.

Restrictionsoninterimdividendintroduced

NodividendifdefaultinSection73and74(Deposits)

notonlytheunclaimeddividendsbutalsotheunderlyingshares arealsotobe
transferredtoIEPF.

CLAIMANTSOFSUCHSHARESCANNOWCLAIMFROMIEPFAFTERTRANSFER

ACCOUNTS OF THE COMPANIES

CHAPTER IX [SectionS 128 TO 138]

Books of Account to be kept at RO and at other place Intimation to Registrar with 7 days

Comprehensive Definition of Financial Statements Balance Sheet , PL Account , Cash Flow

Statement , Statement of changes in equity and any explanatory statement note annexed or
forming part of these documents . No cash flow and for OPC , small and dormant Companies.[
Section 2(40)]

Financial Statements to comply with Schedule III ( Same as present Revised Schedule VI ).

Reopening of accounts possible orders of Tribunal/Court to be filed with ROC

Financial Statements to be filed with ROC with 30 days concept of filing of Provisional if
not approved by AGM and then final also to be filed.

OPC to file within 180 days from closure of FY

Copies of FS of Subsidiaries outside India which have not established place in India

MD, CFO if none any other director designated and if none all directors liable.

Internal Audit for specified companies

AUDIT AND AUDITORS

CHAPTER X [ SectionS 139 TO 148]
CompanytofilenoticeofappointmentofauditorswithROC.
In change of auditor, the representation received from the
retiringauditortobefiledwithRoCifreceivedlate.

Conceptofauditingstandardsintroduced

Rotationofauditors
Auditors not to give additional services as provided in the
Act.

APPOINTMENT AND QUALIFICATIONS OF DIRECTORS

CHAPTER XI [ SectionS 149 TO 172]

Consent of Directors to be filed with ROC

DIN to be informed to ROC.

20 companies is the maximum in which a person can remain as director including not more
than 10 public companies one year given to make choice and Intimate the Registrar

Director resigning to give intimation to ROC within 30 days from resignation with reason.

Register of Directors and KMP to be maintained by the company and Return of directors and
KMP to be filed with Roc within 30 days from appointments and changes therein

Members have right of inspection of Register of Directors and KMP and if refused by the
company Registrar can Order immediate inspection and supply of copies minimum fine of Rs.
50000/- in case of contravention.

MEETINGS OF BOARD AND ITS POWERS

CHAPTER XII [ SectionS 173 TO 195]

Intimation to Registrar of every contract by

OPC with its sole member
Restrictions on Non Cash transactions involving
directors
Prohibition on forward dealing in securities of
the company by Directors or KMP
Prohibition on insider trading of securities.

APPOINTMENT AND REMUNERATION OF MANAGERIAL PERSONNEL

CHAPTER XIII [ SectionS 196 TO 205 ]

Return of appointment to be filed with

Registrar within 60 days
Approval of shareholders if as per
schedule V and Central Government if in
variance

INSPECTION, INQUIRY AND INVESTIGATION

CHAPTER XIV [ SectionS 206 TO 229 ]

Roc empowered to call information or documents in the first go itself on scrutiny of any document or on
any information

Duty of the company and its offers to furnish/produce within the time given

Powers extended to call information/documents from past officers also for the related period.

ROC can call for Inspections such Books of Account if information is incomplete , inadequate , not true and
not true and fair and disclose unsatisfactory state of affairs.

If Roc is of the opinion that the affairs are conducted in a fraudulent manner or Grievance of the
complainant is not redressed , give opportunity of heard and call information and explanations and company
and officers liable for punishment for fraud under 447 .

Powers of the civil court during inspection

Report to CG mandatory after inquiry and inspection and can recommend further investigation.

Search and Seizure after obtaining orders from Special Courts

COMPROMISES, ARRANGEMENTS AND AMLGAMATIONS

CHAPTER XV [ SectionS 230 TO 240]

Noticeofallsuchpetitionsanddraftscheme
ofmergerstobefiledwithtoRegistrar.
Orderoftribunaltobefiledwith30dayswith
Registrar
Liberalizedsystemofschemesofsmall,
holdingsubsidiarycompaniesandfilingwith
Roc=PowerswithCG

THANKS

SCOPE OF PRESENTATION
1.

INCORPORATION OF COMPANIES AND MATTERS INCIDENTAL THERETO( Sections

3 to

22) Chapter II2.

Prospectus and Allotment of Securities [ Sections 24 to 42 ] Chapter- III.-

3.

Share Capital and Debentures [ Sections 43 to 72 } Chapter- IV

4.

Acceptance of Deposits [ Section 73 to 76 ] Chapter V

5.

Registration Charges [ Sections 77 to 87 ] Chapter VI

6.

Management and Administration [ Sections 88 to 122 ] Chapter VII

7.

Declaration of Dividends [ Sections 123 to 127] Chapter VIII

8.

Accounts of Companies [ Sections 128 to 138 ] Chapter IX

9.

Audit and Accounts [ Sections 139 to 148] Chapter X

10. Appointment & Qualifications of Directors [ Sections 149 to 172] Chapter XI

11. Meetings of Board and its Powers [ Sections 173 to 195 } Chapter XII
12. Appointment and Remuneration of Management Personnel [ Sections 196 to 205 ] Chapter XIII

13. Inspections, Inquiry and Investigations [ Sections 206 to 229 ] Chapter XIV
14.Compromise , Arrangements and Amalgamations ( Sections 230 to 240 ] Chapter XV
15.Prevention and Oppression of Management [ Sections 241 to 246 ] Chapter XVI
Registered Valuers [ Section 247] Chapter XVII.
17.Removal of Names of Companies from the Register of Companies [ Sections 248
Chapter XVIII
18.Revival and Rehabilitation of Sick Companies [ Sections 253 to 269 ] Chapter XIX
19.Winding Up [ Sections 270 to 365] Chapter XX
20.Companies Authorized to Register Under this Act [ Sections 366 to 378] Chapter XXI
21.Companies Incorporated out side India [ Section 379 to 393] Chapter XXII
22.Government Companies [ 394 to 395 ] Chapter XXIII
23.Registration Offices and fees [ Sections 396 to 404] Chapter XXIV
24.Companies to furnish Information and Statistics [ Section 405] Chapter XXV
25.Nidhis [ Section 406 ] Chapter XXVI
26.NCTL [ Sections 407 to 434 ] Chapter XXVII
27.Special Courts [ Sections 435 to 446 ] Chapter XXVIII
28. Miscellaneous [ Sections 447 to 470 ]

to 252]

Flavour of the Companies Act, 2013

Substantial Part of Act in the shape of Rules Thus
greater flexibility - to facilitate and regulate - to match
the dynamism of corporate environments .
Self-Regulations, lesser Government approvals- More
Disclosures.
Stringent Punishment for Violations
Efficient Enforcement
Healthy Growth for Corporates
Greater Protection mechanism For all stakeholders.

ELEVATED ROLE OF THE REGISTRAR

Registry Functions-

Through out the life cycle of the

company From Incorporation till Winding up .

Registrar The Regulator Inquiry. Inspections and
investigations
Enforcement Functions Prosecutions , Striking off
Powers, Winding Up and now Adjudications
Registrar The Facilitator
Protection

- Investor education and