Incorporation of a Company is mandatory if you are neither a propreitory or a Partnership Firm. Incorporation of a Company has its own Pro’s and Con’s. LEt us go through this article to understand the basic procedure of Incorporation of Company. The Company Act, deals with the procedures and requirements to Incorporate a Company and also gives us the basic guidelines on registration and functioning of the Company.
Know all about formation and incorporation of company
Section 3 deals with Formation companies and states that a corporation could also be formed for any lawful purpose. Thus, no company shall be formed for carrying on any unlawful objects. Further Section 3(1) states that a company may be formed for any lawful purpose by—
- seven or more persons, where the company to be formed is to be a public company;
(b) two or more persons, where the corporate to be formed is to be a personal company; or
(c) one person, where the corporate to be formed is to be One Person Company that’s to mention , a personal company by subscribing their names or his name to a memorandum and complying with the wants of this Act in respect of registration.
This is done by subscribing to their names or his name to a memorandum and complying with the wants of this Act in respect of registration
3(2): A company formed under Section 3(1) may be either—
(a) A company limited by shares; or s
(b) A company limited by guarantee; or
(c) An unlimited company.
Section 7 of the Act provides for the Incorporation of the company and the procedure to be followed for the incorporation.
STEP1: Filing of documents and information with the registrar within whose jurisdiction the registered office of the company is proposed to be situated. The documents needed are:-
• the memorandum and articles of the corporate duly signed by all the subscribers to the memorandum.
• A declaration by person who is engaged in the formation of the company (an advocate, a chartered accountant, cost accountant or company secretary in practice), and by a person named in the articles (director, manager or secretary of the company), that all the requirements of this Act and the rules made there under in respect of registration and matters precedent or incidental thereto have been complied with.
• The particulars (names, including surnames or family names, residential address, nationality) of each subscriber to the memorandum along side proof of identity, and within the case of a subscriber being a body corporate, such particulars as may be prescribed including proof of identity and identity as may be prescribed.
• The address for correspondence till its registered office is established;
• The particulars (names, including surnames or family names, the Director number, residential address, nationality) of the persons mentioned within the articles because the first directors of the corporate and such other particulars including proof of identity as could also be prescribed;
• The particulars of the interests of the persons mentioned within the articles because the first directors of the corporate in other firms or bodies corporate along side their consent to act as directors of the corporate in such form and manner as could also be prescribed.
STEP 2: The Registrar on the basis of documents and information filed shall register all the documents and information in the register and issue a certificate of incorporation in the prescribed form to the effect that the proposed company is incorporated under this Act.
STEP 3: On and from the date mentioned in the certificate of incorporation, the Registrar shall allot to the company a Corporate Identity Number (CIN), which shall be a distinct identity for the corporate and which shall even be included within the certificate.
STEP 4: The Company shall maintain and preserve at its registered office copies of all documents and information as originally filed, till its dissolution under this Act.
STEP 5: If a person furnishes any false or incorrect particulars of any information or suppresses any material information, of which he’s aware in any of the documents filed with the Registrar in r elation to the registration of a corporation , he shall be responsible for action under section 447.
STEP 6: Where, at any time after the incorporation of a company, it is proved that -the company has been got incorporated by furnishing any false or incorrect information or representation or -by suppressing any material fact or information in any of the documents or declaration filed or made for incorporating such company, or by any fraudulent action, the promoters, the persons named because the first directors of the corporate and therefore the persons making declaration under this section shall each be responsible for action under section 447.
STEP 7: Where a company has been got incorporated by furnishing false or incorrect information or representation or by suppressing any material fact or information in any of the documents or declaration filed or made for incorporating such company or by any fraudulent action, the Tribunal may, on an application made thereto , on being satisfied that things so warrants,
a) pass such orders, because it might imagine fit, for regulation of the management of the corporate including changes, if any, in its memorandum and articles, publicly interest or in the interest of the company and its members and creditors; or
b) Direct that liability of the members shall be unlimited; or
c) Direct removal of the name of the corporate from the register of companies; or
d) Pass an order for the completing of the company; or
e) Pass such other orders because it may deem fit.
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