Basics of The Companies Act,2013

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 Section 3A--> Maintain minimum number of members

If at any time the number of

members of a company is reduced The company carries on the
• In case of public company,
below 7
• In case of private company,
+ business for more than 6
months(while the number is
reduced)
below 2

Every person who is a member of the company during the time that it so carries on business after those 6 months and
is aware of the fact-->
shall be severally liable for the payment of all debts contracted by the company after 6 months and may
be severally sued for.

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 Section 4--> Memorandum of Association of the Company

MCQ Worthy Point.

It is the principal document of the company. It defines the scope of power of the company.

MCQ Worthy Point.

MOA has the following clauses-:

Name clause Situation clause Object clause

Nomination clause (in

Liability clause Capital/ Subscription clause
case of OPC)

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 Section 4--> Memorandum of Association of the Company

Some Important Points

Name Clause :-

1) The name should not

• be identical with or resemble too nearly to the name of an existing company
• constitute an offence under any law
• be undesirable in the opinion of the Central government.

2) Government companies and Section 8 Companies need not suffix the term “Private Limited” or “Limited” with
their name.

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 Section 5--> Articles of Association of the Company

The articles of a company shall contain the regulations for management of the company.

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 Section 7--> Incorporation of the Company

Drafting & Obtain File

Consent of Submit Pay fees
Reservation signing of Certificate declaration
directors to “Statutory and
of name by MOA & of about
be submitted Declaration amount of
e-filing AOA and Incorporati address of
to ROC of stamp
application submit to on from Registered
electronically Compliance” duty
ROC. ROC Office

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 Section 6--> Act to override MOA & AOA

Generally, if the provisions of MOA, AOA or any contract entered by the company are inconsistent to the Companies
Act, then Act shall override them.

Exception :- If any other Section of the Act says that article is superior, then we will treat it accordingly.

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 Concept check

Section 47 of The companies Act deals with voting powers of members. And a notification is passed saying that Section 47 is
applicable to a private company subject to its AOA. Now, for a private company, If AOA says that Section 47 is not applicable,
then what will happen?

In this case AOA will become superior and Section 47 shall not be applicable.

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