Presentation

On
Incorporation Of Company
Presented by:
Vanisha
Assistant Professor
(Commerce & Management)
Introduction
A company comes in to existence is generally by a
process referred to as incorporation
Once a company has been legally incorporated it
becomes a distinct entity from those who invest their
capital and labour to run the company

Promotion
Promotion of a company is the first important
preliminary stage where necessary steps are taken for
the registration of a company.
Promotion is the process of organizing and planning
the finances of a business enterprise under the
corporate form
Promotion means taking such steps that would
persuade the other members to come together for the
achievement of a common objective through the
company form of organization.
Promoter
Acc to section 2(69)of the companies act 2013;
Who has been named as such in a prospectus or is
identified by the company in the annual return
referred to in section 92;
Who has control over the affairs of the company,
directly or indirectly whether as a shareholder ,
director or otherwise.
In accordance with whose a advice, direction or
instructions the board of directors of the company is
accustomed to act.
Functions
Discovery of idea
Detailed investigation
Assembling off resources
Preparing preliminary documents
Entering in to preliminary documents
Naming a company
Appointment of bankers , brokers & underwriters.
Legal position of promoter
The promoters of a company have hold
fiduciary position in the company.
They have the powers of defining how , when
& in what shape and under what supervision it
shall came in to existence & began to act as a
trading corporation.
Rules for promoters
A promoter cannot make either directly or indirectly
any profit at the expense of the company he
promotes, without the knowledge and expense of the
company.
If he does so in disregard to this rule, the company
can compel him to account for it.
Where the promoter fails to make full disclosure of
the profits that he is making the company may sue
him for damages for breach of fiduciary duty, &
recover from him any profit made.

Rights of Promoters
The promoter is entitled to
receive all the expenses
incurred in setting up and
registering the company from
the board of directors
Right to receive
preliminary expenses
The promoters are held jointly
and severally liable for the
secret profits made by them in
formation of the company.


Right to recover
proportionate
amount from the co-
promoters
A promoter has right to be
paid remuneration for his
efforts the payment of
remuneration to a promoter in
consideration of his services
may be in the form of fully or
party paid up shares,
debentures or commission, or
it can be in the form of lump
sum amount
Right to
remuneration
Incorporation of A Company
A company comes in to existence when a number
of persons come together with a view to exploit
some business opportunity. These persons are
called promoters.
under section 3 , any seven or more persons in
case of public company, 2 or more persons in case
of private company, 1 person in case of one
person company may form a incorporated
company i.e. Co limited by shares , limited by
guarantee and an unlimited company.

Conti
The purpose for which a company is going to be
incorporated must be lawful.
It means a purpose not forbidden by law or opposed to
pubic policy.
Steps before proceeding with the procedure of filling
documents:
DIN
Digital signatures of the promoters.
Both DIN and digital signatures will be registered with
the MCA (Ministry of corporate affairs)Portal.
Steps Of Incorporation
Availability of name: sec 4 of the co act that a
company cannot be registered by name which in
opinion of the central government is desirable.
The promoter is required to select at least six
alternatives names in order of preference for the
proposed company and secure the name availability
by making an application to the registrar of
companies of the state in which they want to have the
proposed company incorporated.
conti.
The application is required to be made in the
prescribed form(e form INC-1) along with prescribed
fee and shall be with digital signatures of the
promoter as per companies rule , 2014
Availability of name can be checked using the check
company name service under other services tab on the
home page of MCA i.e. www.mca.gov.in.
Once it is done , chance of rejection of proposed
name will be reduced.


Registrar of company is required to inform approval
of name with in seven days.
Once the name is approved it is kept reserved for 6
months. If application for incorporation is not
submitted within 6 months, the name can be allotted
to other applicants.
The name should not be undesirable or be identical
with or to nearly resemble the name of an existing
company.
Minimum paid up capital
It must be ensured that the minimum paid up capital
of the company is Rs. 5 lakh in case of public
company and 1 lakh in the case of private company.

Formalities to obtain certificate of
incorporation
Application form: an application shall be filed with
ROC in form no. INC.2 (for one person company)
and form no. INC. 7 (other than once person
company) under the companies rule 2014.

Documents to be filed with the
registrar

Memorandum of association: (includes its
objectives, its name, address of its registered office, the
capital, the nature of liabilities of members etc.)

Articles of association: (it contains the rules and
regulations relating to the internal management of the
company.
Vetting of memorandum and articles , printing,
stamping and signing of the same:- (before proceeding
with the printing of the memorandum and articles of
association of a company, it is usual for the promoters to
approach the registrar of the company a concerned for vetting
the draft memorandum and articles.)
Printing of memorandum and articles:
Stamping of memorandum and articles:
Signing of MOA &AOA: to be signed by each
subscriber 7 in case of public co, 2 in case of private
co or 1 in case of one person of company and add his
address, description and occupation, if any.
Dating of memorandum and articles: (date must be date
of stamping or later than the date of their stamping or not)
Copy of proposed agreement: (an agreement with any
individual for appointment as a managing director, whole time
director or manager a copy of such should be filed with the
registrar of co along with other documents.
Power of attorney: (after fulfilling various formalities that
are required for incorporation of company, the promoters may
execute a power of attorney in favor of chartered accountants
or a company secretary.)
Consent of the directors: acc to sec 266, in the case of
a public limited company having share capital, person
cannot be appointed as a director by the articles
unless he has before the registration of articles,either
himself or through his agent ,signed and filed with the
registrar his consent in writing to act as a director,
consent of the directors is not required in case of
private company.
Particulars of directors along with DIN: (where
a company by its articles of association appoint any person or
persons as a directors , manager or secretary it may also file
their particulars with the registrar at the time of incorporation)
Filing of Agreements: (with any individual appointment as
its:
Managing Director
Whole Time Director
Manager
Notice of registered address must also be made:
Documents to be filed are:
MOA duly stamped
AOA duly stamped
A copy of agreement to appoint MD is to be enclosed
Statutory declaration
Power of attorney to correct memorandum
In case of public co ltd by shares articles must contain
names of their directors , their written consent as
attachment.
Original letter approving the company.
Name of the registered office
Proof of payment filing fees.

The documents are to be filed with ROC of concerned
state along with fees. These are to be submitted
electronically as scanned attachment to e form no 1. after
submission a SRN (service request number) will be
generated by system
Statutory declaration of compliance: (a
declaration is to be filed in form INC-8 with the
registrar of companies.)
May be signed any of the following:
An advocate of the supreme court or high court.
A secretary or a chartered accountant.
By a person named in the articles as a director , manager or
secretary of the company.
If the registrar is satisfied that al the documents delivered to
him are in order , he shall retain an register the memorandum
and the articles if any, provided he is satisfied on the following
points.
The names selected by the company is acceptable
The relevant provisions of the act have been complied with.


The objects of the company are lawful
The required no of persons under the act have
subscribed and duly signed
The memorandum and articles comply in all respects
with the provisions of the act.
The statutory declaration have been properly made.
Certificate Of Incorporation: [Sec. 7(2)]on
registration the registrar will issue a certificate of
incorporation in form INC.11 whereby he certifies
that the company is incorporated and in the case of
limited company the company is limited.
In these days the ROC issue a certificate of
incorporation bearing a corporate identity number
consisting of 21 digits.
Conclusiveness of the certificate:
all the requirements of the act have been compiled
with in respect of registration,
The company is duly registered,
That the company came into existence on the date
mentioned in the certificate.

Capital subscription:

Commencement of business