Incorporation of company

 

Section 7 of the Companies Act of 2013 states the following :

- The Registrar shall receive the following documents and information for registration:

- The company memorandum and articles, signed by all memorandum subscribers

- A signed declaration form from an attorney, accountant, or company secretary engaged in the business's formation, as well as from a director, manager, or secretary named in the articles

- A declaration from subscribers to the memorandum and from persons named as the first directors affirming that they have not been found guilty of any fraud

- The address for correspondence till its registered office is established

- The name, residential address, nationality, and other particulars of every memorandum subscriber

- The names, Director Identification Number, residential address, nationality, and other particulars of the persons mentioned in the articles as the first directors

- The interests of the persons mentioned in the articles as the first directors in other firms

- The Registrar shall register all the documents in the register and issue a certificate of incorporation

- The company shall maintain and preserve at its registered office copies of all documents till its dissolution

- If any person furnishes any false particulars of any information or suppresses any material information in any of the documents filed with the Registrar in relation to the registration of a company, he shall be liable for action

- The promoters, the persons named as the first directors of the company, and the persons making a declaration under clause (b) of sub-section (1) shall each be liable for action if it is proved that the company has been got incorporated by furnishing any false information

- The Tribunal may pass such orders for the regulation of the management of the company, including changes in its memorandum and articles, direct that liability of the members shall be unlimited, direct removal of the name of the company, pass an order for the winding up of the company, or pass such other orders as it deems fit

Section 3 of the Companies Act of 2013 states the rules for the formation of a company :

- A company may be formed by:

- Seven or more persons for a public company

- Two or more persons for a private company

- One person for a One Person Company (a private company)

- The company must subscribe to a memorandum and meet the Act’s registration requirements

- The memorandum of One Person Company must indicate the name of another person who will become a member if the subscriber dies or becomes incapacitated

- The written consent of the person must be filed with the Registrar at the time of incorporation

- A company formed under this section may be a company limited by shares, limited by guarantee, or an unlimited company

Section 3A of the Companies Act of 2013 states that:

- Members are severally liable in certain cases .

- Introduced by Act 1 of 2018 and came into effect on February 9, 2018 .

- The provision relates to specific situations where individual members' liability is extended beyond their respective shares in the company .

- if at any time the number of members of a company is reduced, 

    -in the case of public company,  below 7

    -in the case of private company,  below 2

    -and the Company carries on business for more than 6 months while the.          number of members is so reduced, 

- every person who is a member ov the company during the time that it so carries on business after those six months and knows it is carrying on business with less than Seven members or two members 

- shall be liable for the payment of the whole debts of the company contracted during that time,  and may be severally sued.

Section 8 of the Companies Act of 2013 relates to the formation of companies with charitable objects, etc . 

- Encourages non-profit goals

- Registered under the Companies Act 2013

- The Central Government has brought out certain exemptions to Section 8 Companies

- A company registered under this section cannot alter its provisions without the approval of the Central Government

Revocation of license refers to the complete termination of privileges or permissions granted by a license ¹. Here are some key points related to license revocation ¹:

- License revocation is different from suspension, which is only a temporary withholding of privileges.

- Reasons for revocation include committing crimes, such as driving under the influence, vehicular manslaughter or repeated traffic violations.

- Revoked licenses cannot be reinstated, but drivers can apply for a new license after the period of revocation is over.

- Driving with a revoked license is a crime and may be punishable by imprisonment and fines.

Section 8 of the Companies Act, 2013 deals with companies with charitable objects, etc. and the revocation of license under this section refers to the cancellation of the license granted to such companies.

According to Section 8(6) of the Companies Act, 2013, the Central Government may, by order, revoke the license granted to a company under this section if:

- The company has contravened any of the provisions of this section or any other provision of this Act.

- The company has failed to comply with any of the conditions subject to which the license was granted.

- The company has been found guilty of fraud or other misconduct.

Upon revocation of the license, the company shall cease to enjoy the privileges and exemptions granted under this section and shall be liable to be wound up.

Section 9 of the Companies Act of 2013 states the following :

- Effect of registration

- Effective from April 1, 2014

- Upon registration, the company becomes capable of exercising all the functions of an incorporated company

- The company has perpetual succession

- The company can acquire, hold, and dispose of property

- The company can contract and sue (or be sued) in its name

Section 4 of the Companies Act of 2013 states the following :

- The memorandum of a company shall contain:

- The name of the company as per the type of the company (e.g., public limited, private limited)

- The State in which the registered office of the company is to be situated

- The objects for which the company is proposed incorporation

- The liability of members of the company (limited or unlimited)

- In the case of a company having a share capital, the amount of share capital with which the company is to be registered

- Divisions of the share capital into shares

- The number of shares which the subscribers to the memorandum agree to subscribe

- The number of shares each subscriber to the memorandum intends to take

- In the case of One Person Company, the name of the person who shall become a member in case of the subscriber's death

- The name stated in the memorandum shall not be identical with or resemble the name of an existing company

- A company shall not be registered with a name which contains any word or expression which is likely to give the impression that the company is connected with the Central Government or any State Government

The name clause in Section 4 of the Companies Act of 2013 states that ¹ ²:

- The name stated in the memorandum shall not be identical with or resemble the name of an existing company

- A company shall not be registered with a name which contains any word or expression which is likely to give the impression that the company is connected with the Central Government or any State Government

- All clauses of the Memorandum except the capital clause can be altered by following the provisions of Section 13 of Companies Act, 2013 by passing a special resolution.

The name clause in Section 4 of the Companies Act, 2013 also deals with the reservation of name, which states that:

- A company may apply to the Registrar for reservation of a name before incorporating the company.

- The Registrar shall reserve the name for a period of 60 days from the date of application.

- The reserved name shall be valid for 60 days from the date of reservation.

- The company shall be incorporated within the validity period.

Note: The name reservation is done through the MCA portal (Ministry of Corporate Affairs) by filing the Form INC-29.

The name clause in Section 4 of the Companies Act, 2013 also deals with the cancellation of name, which states that:

- The Registrar may cancel the reserved name if:

    - The company is not incorporated within the validity period.

    - The name is found to be identical with or too nearly resembling the name of an existing company.

    - The name is found to be in contravention with the provisions of the Act or any rules or regulations made thereunder.

- The Registrar shall give a notice in writing to the applicant before canceling the reserved name.

- The applicant may appeal to the Central Government if the Registrar cancels the reserved name.

Note: The cancellation of name is done by the Registrar in accordance with the rules and regulations made under the Companies Act, 2013.