Professional Documents
Culture Documents
Jyoti Pathak 11910540 BSL
Jyoti Pathak 11910540 BSL
BUSINESS
Course Instructor: Dr. Abhishek Pandey
Academic Task No.: CA3 Academic Task Title: Application of
legal provisions related to incorporation of
company
Date of Allotment: 16-09-2020 Date of submission: 05-10-2020
Student’s Roll no: B47 Student’s Reg. No: 11910540
Learning Outcomes: With the help of this I learnt about the Incorporation about a
company, Objectives and MOA and AOA by establishment of an artificial company
Declaration:
I declare that this Assignment is my work. I have not copied it from any other students work
or from any other source except where due acknowledgement is made explicitly in the text,
nor has any part been written for me by any other person.
Student’s Signature: Jyoti Pathak
INTRODUCTION
Singh and brothers Limited is a Public incorporated on 15 September 2020. A public limited
company is a type of public company under United Kingdom company law, some
Commonwealth jurisdictions, and the Republic of Ireland. It is a limited liability company
whose shares may be freely sold and traded to the public although a PLC may also be
privately held, often by another PLC, with a minimum share capital of £50,000 and usually
with the letters PLC after its name. The company has been formed to provide investment
facilities and services to consumers. Now we will discuss the objectives of the company
which are formed and also the steps which are needed for the formation of Singh and brothers
limited and also showing the Memorandum of Association (MOA) and Articles of
Association(AOA).
Minimum 7 Shareholders
Minimum 3 Directors (The directors and shareholders can be same person)
Minimum Authorised Share Capital shall be Rs. 500,000 (INR Five Lac)
DIN (Director Identification Number) for all the Directors
DSC (Digital Signature Certificate) for one of the Directors
The two basic things i.e. Name Approval and Digital Signature Certificates (DSC) will
authorize business owners to go for the next step i.e. Incorporation filing. The Incorporation
filing for most companies is similar i.e. Companies under the Companies Act, 2013.
Stage- 1
An Application for reservation of Name needs to be filed with the Registrar in E-Form INC
-1 along with such fees as may be prescribed. [Section 4(4) & 4(5) Read with Rule 9 of the
Companies (Incorporation) Rules, 2014). (Pl. ref. checklist and procedure for Name
Application and Approval.)
Application in Form No. INC.1 should have the following documents as an attachment:
Proof of significance in terms of Rules wherever applicable.
After ascertaining name availability for the Registrar of Companies, steps should be taken to
get the memorandum and articles of association for the proposed company drafted and
printed. The memorandum and articles shall conform with the provisions of Section 4 and 5
of the Companies Act 2013 and rules made thereunder.
Stage 2
REGISTRATION OF COMPANY
Particulars of each person mentioned in Articles as First Directors of the company, their
names, including surnames or family names, the Director Identification Number, residential
address, nationality and such other particulars including proof of identity as may be
prescribed and his interest in other Firms or Bodies Corporate along with his consent to act as
Director is required to be filed in E-Form No. DIR-12 along with fee as provided in
Companies (Registration offices and fees) Rules, 2014 [Section 7(1)(f) & 7(1)(g) read with
Rule 17 of the Companies (Incorporation) Rules, 2014).
Stage 3
If all the documents are in order then based on Forms Filed and on being satisfied Registrar
will issue a Certificate of Incorporation in Form No. INC-11 bearing a Corporate Identity
Number (CIN), which shall be a distinct identity for the company and which shall also be
included in the certificate [Section 7(2) and 7(3) read with Rule 18 of the Companies
(Incorporation) Rules, 2014]
Stage 4
A Company shall have its Registered Office within 15 days of its Incorporation capable of
receiving and acknowledging all communications and notices as may be addressed to it.
Verification of Registered Office of the Company shall be filed with the Registrar within 30
days of Incorporation in E-Form INC22a along with fee as provided in Companies
(Registration offices and fees) Rules, 2014 with the attachment as given under Rule 25 of the
Companies (Incorporation) Rules, 2014.
The following mandatory documents are required to be filed along with E-Form INC 22: 9
The registered document of the title of the premises of the registered office in the
name of the company, or
The notarized copy of the lease or rental agreement in the name of the company along
with a copy of rent paid receipt not older than one month.
The authorization from the owner or authorized occupant of the premises along with
proof of ownership or occupancy authorization, to use the premises by the company
as its registered office, and
The proof of evidence of any utility service like telephone, gas, electricity, etc.
depicting the address of the premises in the name of the owner or document, as the
case may be, which is not older than two months.
List of all the companies (specifying their CIN) having the same registered office address if
any:
Any other attachment as may be prescribed Checklist for the signing of Memorandum and
Articles of Association of the Company (Rule 13 of Companies (Incorporation) Rules, 2014
1. Name Clause: This clause specifies the name of the company. The name of the
company should not be identical to any existing company. Also, if it is a private
company, then it should have the word ‘Private Limited’ at the end. And in case of
public company public company, then it should add the word “Limited” at the end of
its name. For example, ABC Private Limited in case of the private, and ABC Ltd for a
public company.
2. Registered Office Clause: This clause specifies the name of the State in which the
registered office of the company is situated. This helps to determine the jurisdiction of
the Registrar of Companies. The company is required to inform the location of the
registered office to the Registrar of Companies within 30 days from the date of
incorporation or commencement of the company.
3. Object Clause: This clause states the objective with which the company is formed.
The objectives can be further divided into the following 3 subcategories
ii. Incidental Objective: These are the objects ancillary to the attainment of main
objects of the company
iii. Other objectives: Any other objects which the company may pursue and are not
covered in above (a) and (b)
4. Liability Clause: It states the liability of the members of the company. In case of an
unlimited company, the liability of the members is unlimited whereas in case of a
company limited by shares, the liability of the members is restricted by the amount
unpaid on their share. For a company limited by guarantee, the liability of the
members is restricted by the amount each member has agreed to contribute.
5. Capital Clause: This clause details the maximum capital that a company can raise
which is also called the authorized/nominal capital of the company. This also explains
the division of such capital amount into the number of shares of a fixed amount each.
The following particulars of every subscriber to the memorandum shall be filed with the
Registrar
1. Name (including surname or family name) and recent Photograph affixed and scan with
MOA and AOA,
2. Fathers/Mothers/ name
3. Nationality
4. Date of Birth
6. Educational qualification.
7. Occupation
9. Permanent residential address and also Present address (Time since residing at present
address and address of previous residence address (es) if the stay of present address is less
than one year) similarly to the office/business addresses.
12. Fax no. of Subscribers Optional) Explanation-information related to (I) to (II) shall be of
the individual subscriber and not of the professional engaged in the incorporation of the
company,
1. Change of name A company may change its name by special resolution and with the
approval of the Central Government signified in writing. However, no such approval shall be
required where the only change in the name of the company is the addition there to or the
deletion there from, of the word “Private”, consequent on the conversion of a public company
into a private company or of a private company into a public company. (Sec. 21)
Registration of change of name. Within 30 days passing of the resolution, a copy of the order
of the Central Government’s approval shall also be field with the Registrar within 3 months
of the order. The Registrar shall enter the new name in the Register of Companies in place of
the former name and shall issue a fresh certificate of incorporation with the necessary
alterations. The change of name shall be complete and effective only on the issue of such
certificate. The Registrar shall also make the necessary alteration in the company’s
memorandum of association (Sec. 23) The change of name shall not affect any right or
obligations of the company or render defective any legal proceeding by or against it. (Sec.
23)
2. Change of Registered Office This may involve:
a) Change of registered office from one place to another place in the same city, town or
village. In this case, a notices is to be give within 30 days after the date of change to the
Registrar who shall record the same.
b) Change of registered office from one town to another town in the same State. In this case,
a special resolution is required to be passed at a general meeting of the shareholders and a
copy of it is to be filed with the Registrar within 30 days. The within 30 days of the removal
of the office. A notice has to be given to the Registrar of the new location of the office.
c) Change of Registered Office from one State to another State to another State.Section 17
of the Act deals with the change of place of registered office form one State to another State.
According to it, a company may alter the provision of its memorandum so as to change the
place of its registered office from one State to another State for certain purposes referred to in
Sec 17(1) of the Act. In addition, the following steps will be taken.
Special Resolution
For effecting this change a special resolution must be passed and a copy there of must be
filed with the Registrar within thirty days. Special resolution must be passed in a duly
convened meeting.
The alteration shall not take effect unless the resolution is confirmed by the Central
Government. The Central Government before confirming or refusing to confirm the change
will consider primarily the interests of the company and its shareholders and also whether the
change is bonafide and not against the public interest. The Central Government may then
issue the confirmation order on such terms and conditions as it may think fit.
The Company may alter its objects on any of the grounds (I) to (vii) mentioned in Section 17
of the Act. The alteration shall be effective only after it is approved by special resolution of
the members in general meeting with the Companies Amendment Act, 1996, for alteration of
the objects clause in Memorandum of Associations sanction of Central Government is
dispensed with.
i) to enable the company to carry on its business more economically or more effectively;
ii) to enable the company to attain its main purpose by new or improved means;
iv) to carry on some business which under existing circumstances may conveniently or
advantageously be combined with the business of the company;
vi) to sell or dispose of the whole, or any part of the undertaking of the company;
vii) to amalgamate with any other company or body of persons. Alterations in the objects is
to be confined within the above limits for otherwise alteration in excess of the above
limitations shall be void.
A company shall file with the registrar a special resolution within one month from the date
of such resolution together with a printed copy of the memorandum as altered. Registrar shall
register the same and certify the registration. [Sec. 18].
Any alteration, if not registered shall have no effect. If the documents required to be filed
with the Registrar are not filed within one month, such alteration and the order of the Central
Government and all proceedings connected therewith shall at the expiry of such period
become void and inoperative. The Central Government may, on sufficient cause show, revive
the order on application made within a further period of one month [Sec. 19]
The procedure for the alteration of share capital and the power to make such alteration are
generally provided in the Articles of Association If the procedure and power are not given in
the Articles of Associational, the company must change the articles of association by passing
a special resolution. If the alteration is authorized by the Articles, the following changes in
share capital may take place:
Ordinarily the liability clause cannot be altered so as to make the liability of members
unlimited. Section 38 states that the liability of the members cannot be increased without
their consent. It lays down that a member cannot by changing the memorandum or articles,
be made to take more shares or to pay more the shares already taken unless he agrees to do so
in writing either before or after the change.
A company, if authorized by its Articles, may alter its memorandum to make the liability of
its directors or manager unlimited by passing a special resolution. This rule applies to future
appointees only. Such alteration will not affect the existing directors and manager unless they
have accorded their consent in writing. [Section 323].
Section 32 provides that a company registered as unlimited may register under this Act as a
limited company. The registration of an unlimited company as a limited company under this
section shall not affect any debts, liabilities, obligations or contracts incurred or entered into
by the company before such registration.
1. Branch Office: - The Company shall have the right to create one or more branch
offices, with the exception of the Headquarters, which may be deemed appropriate by
its Board in those locations.
2. Share Capital: -
(i) The sum payable on request for each share shall not be less than 5% of the
nominal value or, as the SEBI may decide, of the share.
(ii) At all times, the paid-up share capital shall be at least Rs. 5,00,000/- (only
Rupees Five Lakhs) or as much as may be needed under the Act.
(iii) The approved share capital of the Company shall, from time to time,
be as set out in Clause V of the Memorandum of Association of the Company.
(iv) The Corporation has the right to raise its approved or issued and paid-up share
capital from time to time.
(v) The Company's share capital may, from time to time, be classified into Equity
Shares with dividend, voting or otherwise differential rights in accordance
with the applicable provisions of the Act, Rules and Law.
(vi) The Owners shall be liable to all of the provisions of these Articles.
3. Reduction of Share Capital: - The Corporation may from time to time reduce its
reserves, any capital redemption reserve account and the securities premium account,
according to the relevant provisions of the Act, in any way allowed by law for the
time being. If it is excluded, this Article is not meant to derogate from the control the
Company may have under the legislation.
4. Shares and Share Certificates: -
(i) A duplicate shareholding certificate can be given if the certificate is:
It has been reported to have been missing or destroyed; or,
The company was defaced, mutilated or damaged and surrendered to
the company.
(ii) The Corporation shall be entitled, in compliance with the Depositories Act, to
dematerialize its existing shares, to rematerialize its securities held in the
depository and/or to sell its new shares in a dematerialized form and, if any, to
the rules laid down thereunder.
(iii) Debentures and other shares of the Company shall be subject to the
terms of this Article mutatis mutandis.
(iv) If, pursuant to sub-section (e) of this Document, a new share certificate has
been issued, it shall be in the type and manner defined in the Companies
(Share Capital and Debentures) Regulations, 2014.
5. Share Equivalent: - Subject to the appropriate provisions of the Act, the Corporation
shall have the ability to grant Equity Equivalents, subject to comply with the law and
the consent of the Board, on such terms and in such a manner as the Board thinks fit,
including transfer, repayment and redemption, whether for a premium or otherwise.
6. Underwriting and Brokerage: -
(i) According to the relevant provisions of the Act, for any stock or debentures of
the Company of compliance with the regulations of the Companies
(Prospectus and Allotment of Securities) Laws (Prospectus and Allotment of
Securities) According to the relevant provisions of the Act, the Company may
at any time pay a fee to any individual in view of its subscription or
arrangement to subscribe or obtain subscription, (whether entirely or
conditionally),
(ii) The business can also pay for such brokerage as may be legal on the issue of
stock or debentures.
7. Preference Shares: -
(i) Redeemable Preference Shares: - Subject to the relevant provisions of the Act and
the consent of the Board, the Corporation shall have the right to issue, on a
cumulative or non-cumulative basis, preference shares which are liable to be
redeemed in any manner permitted under the Act, and the Directors may, subject to
the relevant provisions of the Act, exercise such authority in any manner considered
acceptable and provide for the redemption of those shares.
(ii) Convertible Redeemable Preference Shares: - Subject to the appropriate provisions
of the Act and the consent of the Board, the Corporation shall have the right to issue
convertible redeemable preferred shares on a cumulative or non-cumulative basis,
which are liable to be redeemed in any manner permitted under the Act, and the
Directors can, subject to the appropriate provisions of the Act, exercise such authority
as they find fit and provide for redemption.
8. Provision in Case of preference shares: - The following provisions shall extend in
respect of the issuing of preference shares pursuant to Article 6 above:
(i) No such shares shall be redeemed, save for the income of the Corporation
otherwise eligible for dividends or the proceeds of the new issue of shares
made for redemption purposes;
(ii) Until they are fully charged, no other shares shall be redeemed;
(iii) The fee due on sale, if any, is charged out of the earnings of the
Company or out of the security fee account of the Company until the shares
are redeemed;
(iv) The redemption by the Business of the preferred shares pursuant to this
Article shall not be taken as a decrease in the sum of share capital.
Conclusion: -
It is a settled theory in corporate law that a firm's articles of association will not circumvent
the rules of the Companies Act, 2013. In addition, the articles of association of a company
are therefore bound to conform with the company's memorandum of association, since the
articles are subject to the statute that is the company's memorandum and every other business
legislation in effect at the time. It is also of primary importance that when a corporation is
incorporated and the company's articles of association are being drafted, the same must be
done in compliance with the association memorandum, the Companies Act, 2013 and any
other company legislation that is in effect at the time.