PAN African eNetwork Project

Masters of Finance and Control

BUSINESS ENVIROMENT & LAW
Semester - I

Ms. SANTOSH KUMARI

Copyright Amity University

ELEMENTS OF COMPANY
LAW
BY

SANTOSH KUMARI,

ASSISTANT PROFESSOR,DEPARTMENT OF
COMMERCE,
SHRI RAM COLLEGE OF COMMERCE,
UNIVERSITY OF DELHI,
DELHI-110007.INDIA

MEANING OF A COMPANY

The word company has no strictly technical legal meaning. It

may be described to imply an association of persons for some common
object or objects. The purposes for which people may associate
themselves are multifarious and include economic as well as noneconomic objectives.
But, in common parlance, the word company is normally reserved
for those associated for economic purposes, i.e., to carry on a business
for gain.

A COMPANY

Definition of a company
Prof. Haney a company is an artificial person created by law,
having separate entity, with a perpetual succession and common
seal.

CHRACTERISTICS FEATURES OF A COMPANY

1.Incorporated association
2.Legal entity distinct from its members
3.Artificial person
4.Limited liability
5.Separate property
6.Transferability of shares
7.Perpetual succession
8.Common seal

KINDS OF COMPANIES
Kinds of companies
1. Private companies
2. Public companies
3. Government companies
4. Foreign companies
5. Holding and subsidiary companies
6. Registered companies
7. Existing companies
8. Associations of persons not for profits

KINDS OF COMPANIES

On the basis of the number of the members,

companies can be divided in two

Private Company

Public Company

KINDS OF COMPANIES

On the basis of the liability of the members, a

company can be classified as

Limited liability Companies

Unlimited liability Companies

KINDS OF COMPANIES

On the basis of the ownership, a company can be

classified as:

Government Companies

Non Government Companies

Foreign Companies

KINDS OF COMPANIES

On the basis of the control, we can classify company

as

Holding companies

Subsidiary Companies

REGISTRATION / INCOPORATION
OF A COMPANY

Procedures for registration / incorporation of a company :

1.

Type of company;

2.

Application for availability of name;

3.

Preparation of memorandum and articles of association;

4.

Vetting of memorandum and articles, printing, stamping and

signing of the same;
continue..

5.

Preparation of other documents:

(i)

Power of attorney.

(ii) Consent of the directors.

(iii) Particulars of the directors.
(iv) Notice of registered address.
(v) Statutory declaration.
6.

Filing of documents for registrations;

7.

Certificates of incorporations.

THANK YOU
Please forward your query
To

: santoshsrcc@gmail.com
CC:
manoj.amity@panafnet.com

CORPORATE PERSONALITY
DEFINITION OF COMPANY
Company - No legal or Technical Meaning
1.COMPANIES ACT

A Company formed and

registered under Companies
Act - Sec. 3(1)

2.COMMON LAW-

A Company is a Legal Person

or Legal Entity and capable of

surviving beyond the lives of

its members.
Like any juristic person a company is legally an entity apart from
its members, capable of rights and duties of its own, and
endowed with perpetual succession.

- A legal device to achieve a purpose

Therefore,
a) Company is a means of co-operation in the conduct of an enterprise.
b) Corporate device is one form of Associated Enterprise
c)An intricate, centralised, economic administrative structure run by
Professional Managers who hire capital from the investor.
- 2 or more persons
- Company and Partnership
i) Greater Capital Mobilization
ii) Limits Personal Liability
- Companies are the structural framework of modern business

EVOLUTION OF COMPANIES
England
Commercial Revolution
Body corporate by Royal Charter - 17th and 18th Century
Bubbles Act of 190 -> Promoting Companies illegal ->
Repealed in 1825
The Joint Stock Companies Act, 1844
The English Act, 1948/1985 and 1989
India
Joint Stock Companies Act, 1850
Companies Act, 1956
Special Act of Parliament eg. Life Insurance Corporation of
India, 1956

NATURE OF CORPORATE FORM

ADVANTAGES
1.INDEPENDENT CORPORATE EXISTENCE - SEC. 34
-

A legal person / corporate personality / body corporate

distinct from its members

Partnership not distinct from its Partners

Case Law - Solomon .Vs. Solomon & Co.

Kondoli Tea Co. Ltd. Re
Dhulia - Amalner Motor Transport Ltd. .Vs.
R.R. Dharamsi

2. LIMITED LIABILITY
- Shareholder liable only on the nominal value of shares
- Limits personal risk
3.
-

PERPETUAL SUCCESSION
Company never dies
Like a River
Members may come and go, but Company can go on forever

4. SEPARATE PROPERTY
Walton. J- The property of the Company is not the property
of shareholders, it is the property of the Company
5. TRANSFERABLE SHARES
The Shares and Debentures or other interest of any member
in a Company shall be moveable property, transferable in
the manner provided by the Articles of the Company

6.
-

CAPACITY TO SUE AND BE SUED

Can sue and be sued in its own name
Criminal complaint
Defamation
Infringement of privacy

7. PROFESSIONAL MANAGEMENT
Independent functioning of Managers assured as there is no
human employer
8. FINANCES
- Raise Capital by Public Subscription

DISADVANTAGES
1. LIFTING THE CORPORATE VEIL
- Some persons are benefitting behind this legal fiction
- Case Law - Lee .Vs. Lees Air Farming Ltd. - Master and
Servant at the same time
- Conspiracy
a. Determination of Character
Case Law - Diamler Co. .Vs. Continental Tyre & Rubber
Co. Peoples Pleasure Park Co. .Vs. Rohleder
b. For Benefit of Revenue
- Case Law - Dinshaw Maneckjee Petit Re
- Works like a Boomerang

c. Fraud or Improper Conduct

- Formed to defeat or Circumvent Law
- Case Law - Gilford Motor Co. .Vs. Horne
d. Government Companies
- A Government Company not an Agent of Government
- Except when performing Government of sovereign and not
commercial functions
- Where no functioning autonomy is granted
2.
-

FORMALITY AND EXPENSE

Expensive Affair
Lots of formalities
Administration as per provisions of Act
Formalities with Registrar

3. COMPANY NOT A CITIZEN

-

Under Citizenship Act or Constitution Part II

Case Law - State Trading Corporation of India Ltd. .Vs.

CTO

Just as you cannot marry a Company

Can claim protection of fundamental rights

Nationality, domicile and residence - Country of

Incorporation

Indian Companies Act, 1866

A company can be defined as a group of persons associated
together for the purpose of carrying on a business, with a
view to earn profits, _a company means a
Company formed and registered under this Act or an
existing company._
_ an existing company means a company formed and
registered under any of the previous companies laws
specified below._
a. any Act or Acts relating to companies in force before the
Indian Companies Act, 1866 (10 of 1886), and repealed by
That Act;

b.

the Indian Companies Act, 1866 (10 of 1866);

c.

the Indian Companies Act, 1882 (6 of 1882);

d.

the Indian Companies Act, 1913 (7 of 1913);

e.

the Registration of Transferred Companies Ordinance,

1942 (54 of 1942); and

Characteristics of a Company
Separate Legal Entity
On incorporation under law, a company becomes a separate
legal entity as compared to its members. The company is
different and distinct from its members in law. It has its own
name and its own seal, its assets and liabilities are separate
and distinct from those of its members. It is capable of
owning property, incurring debt, borrowing money, having a
bank account, employing people, entering into contracts
and suing and being sued separately.

Limited Liability
The liability of the members of the company is limited to
contribution to the assets of the company up to the face value of
shares held by him. A member is liable to pay only the uncalled
money due on shares held by him when called upon topay and
nothing more, even if liabilities of the company far exceeds its
assets.

Perpetual Succession
A company does not die or cease to exist unless it is specifically
wound up or the task for which it was formed has been
completed. Membership of a company may keep on changing
from time to time but that does not affect life of the company.
Death or insolvency of member does not affect the existence ofthe
company.

Separate Property
A company is a distinct legal entity. The companys property is its
own. A member cannot claim to be owner of the companys property
during the existence of the company.

Transferability of Shares
Shares in a company are freely transferable, subject to certain
conditions, such that no shareholder is permanently or necessarily
wedded to a company. When a member transfers his shares to another
person, the transferee steps into the shoes of the transferor and
acquires all the rights of the transferor in respect of those shares.

Common Seal
A company is a artificial person and does not have a physical presence.
Therefore, it acts through its Board of Directors for carrying out its
activities and entering into various agreements. Such contracts must be
under the seal of the company. The common seal is the official signature
of the company. The name of the company must be engraved on the
common seal. Any document not bearing the seal of the company may
not be accepted as authentic and may not have any legal force.

Capacity to Sue and Being Sued

A company can sue or be sued in its own name as distinct
from its members.

Separate Management
A company is administered and managed by its managerial personnel i.e.
the Board of Directors. The shareholders are simply the holders of the
shares in the company and need not be necessarily the managers of the
company.

One Share-One Vote:

The principle of voting in a company is one share-one vote. I.e. if a person
has 10 shares, he has 10 votes in the company. Let us try to differentiate
between company and partnership.

Consequences of Non-registration
Law does not recognize an illegal association. An illegal association
cannot enter into any contract, cannot sue any members or any
outsider, and cannot be sued by any members or outsiders for any of
its debts. The members of the illegal association are personally for the
obligations of the illegal association. A member may be liable to a fine
of Rs. 1000. Any member of an illegal association cannot sue another
member in respect of any matter connected with the association.

Minimum Number of Members

A public company must have at least 7 members whereas private company
may have only 2 members. If the number of members falls below the
statutory minimum and the company carries on its business beyond a
period of six months after the number has so fallen, the reduction of
number of members below the legal minimum is a ground for the winding
up ofthe company.

Types of Companies
On the basis of the number of the members, companies can
be divided in two:
" A Private Company
" A Public Company

Public and Private Companies

Public Company means a company which is not a private company.

Private Company means a company which by its articles of association: a.Restricts the right of members to transfer its shares
b. Limits the number of its members to fifty. In determining this number of
50, employee-members and ex-employee members are not to be considered.
c. Prohibits an invitation to the public to subscribe to any shares in or the
debentures of the

If a private company contravenes any of the aforesaid three provisions, it

ceases to be private company and loses all the exemptions and privileges,
which a private company is entitled. Following are some of the privileges
and exemptions of a private limited company:1.Minimum number is members is 2 (7 in case of public companies)
2. Prohibition of allotment of the shares or debentures in certain cases
unless statement in lieu of prospectus has been delivered to the Registrar
of Companies does not apply.

3. Restriction contained in Section 81 related to the rights issues of share

capital does not apply. A special resolution to issue shares to nonmembers is not required in case of a private company.
4. Restriction contained in Section 149 on commencement of business by
a company does not apply. A private company does not need a separate
certificate of commencement of business.
5. Provisions of Section 165 relating to statutory meeting and submission
of statutory report do not apply.

6. One (if 7 or less members are present) or two members (if more than 7
members are present) present in person at a meeting of the company
can demand a poll.
7. In case of a private company which not a subsidiary of a public limited
company or in the case of a private company of which the entire paid up
share capital is held by the one or more body corporate incorporated
outside India, no person other than the member of the company
concerned shall be entitled to inspect or obtain the copies of profit and
loss account of that company.
8. Minimum number of directors is only two. (3 in case of a public
company)

The Company Law Board on being satisfied that the infringe-ment of the
aforesaid 3 conditions was accidental or due to inadvertence or that on
other grounds, it just an equitable to grant relief, may grant relief to the
company from the consequences of such infringement. The infringement
of the aforesaid 3 conditions does not automatically convert a private
company into a public company. It continues to remain private company;
it merely ceases to be entitled to the privileges
and exemptions available to a private company

Companies Deemed to be Public Limited Company

A private company will be treated as a deemed public limitedcompany in any
of the following circumstances:1. Where at least 25% of the paid up share capital of a private company is
held by one or more bodies corporate, the private company shall
automatically become the public company on and from the date on which the
aforesaid percentage is so held.

2. Where the annual average turnover of the private company during the
period of three consecutive financial years is not less than Rs 25 crores, the
private company shall be, irrespective of its paid up share capital, become a
deemed public company.
3. Where not less than 25% of the paid up capital of a public company limited
is held by the private company, then the private company shall become a
public company on and from the date on which the aforesaid percentage is
so held.

4. Where a private company accepts deposits after the invitation is made by

advertisement or renews deposits from the public (other than from its
members or directors or their relatives), such companies shall become
public company on and from date such acceptance or renewal is first made

Limited Companies

On the basis of the liability of the members, a company can be

classified in
" Limited Companies
" Unlimited Companies

Limited Companies
Companies may be limited or unlimited companies. Company may be
limited by shares or limited by guarantee.
a. Company limited by shares In this case, the liability of members is limited
to the amount of uncalled share capital. No member of company limited by
the shares can be called upon to pay more than the face value of shares or
so much of it as is remaining unpaid. Members have no liability in case of
fully paid up shares.

b. Company limited by the guarantee A company limited by guarantee is a

registered company having the liability of its members limited by its
memorandum of association to such amount as the members may
respectively thereby undertake to pay if necessary on liquidation of the
company. The liability of the members to pay the guaranteed amount arises
only when the company has gone into liquidation and not when it is a
going concern. A guarantee company may be a company with share capital
or without share capital.

Unlimited Company
The liability of members of an unlimited company is unlim-ited.
Therefore their liability is similar to that of the liability ofthe partners
of a partnership firm. It may or may not have ashare capital.
Under the Companies Act, 1956, the name of a public
limitedcompany must end with the word _Limited_ and the name of
aprivate limited company must end with the word _PrivateLimited_.
However, under Section 25, the Central Governmentmay allow
companies to remove the word _Limited / PrivateLimited_ from the
name if the following conditions aresatisfied :-

1. The company is formed for promoting commerce, science, art, religion,

charity or other socially useful objects.
2. The company does not intend to pay dividend to its members but apply its
profits and other income in promotion of its objects.

Holding & Subsidiary Company

On the basis of the control, we can classify company as

Holding and Subsidiary companies
Holding and Subsidiary Companies (Sec 4)

A company shall be deemed to be subsidiary of anothercompany if: 1.That other company controls the composition of its board of
directors; or
2. That other company holds more than half in face value of its equity
share capital.
3. Where the first mentioned company is subsidiary company of any
company, which that other_s subsidiary.

eg Company B is subsidiary of the Company A and Company C is

subsidiary of Company B, therefore Company C is subsidiary of
Company A.The control of the composition of the Board of Directors of
the company means that the holding company has the power atits
discretion to appoint or remove all or majority of directorsof the
subsidiary company without consent or concurrence ofany other person.

Government Companys

On the basis of the ownership, a company can be classified as:

" Government Companies
" Non Government Companies
" Foreign Companies

Government Companies
It means any company in which not less than 51% of the paid-up share
capital is held by the Central Government or any State Government or partly
by the Central Government and partly by the one or more State
Governments and includes a company which is a subsidiary of a
government company. Government

Private Company & Public Company

Private Company / Public Company
Private company means a company which has a minimum paid-up capital
of one lakh rupees or such higher paid-up capital as may be prescribed,
and by its articles,
(a) restricts the rights to transfer its shares, if any;

(b) limits the number of its members to fifty not including(i)persons who are in the employment of the company, and
(ii) persons who, having been formerly in the employment of the company,
weremembers of the company while in that employment and have
continued to be membersafter the employment ceased; and

(c) prohibits any invitation to the public to subscribe for any shares in, or
debentures of,the company ;
(d) prohibits any invitation or acceptance of deposits from persons other
than its member,directors or their relatives;Provided that where two or
more persons hold one or more shares in a company jointly,they shall, for
the purposes of this definitions, be treated as a single member;

Public company means a company which

(a)is not a private company;
(b) has a minimum paid-up capital of five lakh rupees or such higher paidup capital, asmay be prescribed;
(c) is a private company which is a subsidiary of a company which is not a
privatecompany.

 Every private company, existing on the commencement of the

Companies(Amendment) Act, 2000, with a paid-up capital of less than one
lakh rupees, shall,within a period of two years from such commencement,
enhance its paid-capitalto one lakh rupees.
Every private company, existing on the commencement of the
Companies(Amendment) Act, 2000, with a paid-up capital of less than five
lakh rupees,shall, within a period of two years from such commencement,
enhance its paidcapitalto five lakh rupees.

 Every private company, existing on the commencement of the

Companies(Amendment) Act, 2000, with a paid-up capital of less than
five lakh rupees,shall, within a period of two years from such
commencement, enhance its paidcapitalto five lakh rupees.
Where a private company or a public company fails to enhance its
paid-up capitalin the manner specified in sub-section (3) or sub-section
(4), such company shallbe deemed to be a defunct company within the
meaning of section 560 and itsname shall be struck off from the
register by the Registrar.

 A company registered under section 25 before or after the commencement

ofCompanies (Amendment) Act, 2000 shall not be required to have minimum
paidupcapital specified in this section.

Formation of a Private Company

Formation of a Private Limited Company
A private Company can be formed either by
i.incorporation of a new company for doing a new business , or
ii. Conversion of existing business of a sole proprietary concern or
partnership firm
into a company.

A sole proprietory or partnership business can be converted into a company

in any of thefollowing ways:
1. By outright sale of the business as a going concern. It may be a block sale
where thefollowing takes over all the assets and liabilities of the firm or it
may be partial take overof certain assets and liabilities. The consideration
may be based on itemized sale or itmay be on slump sale basis.

2. A company becoming a partner of the firm which will be dissolved

thereafter bymaking partners of the firms the only shareholders of the newly
incorporated companyfor which the following steps should be taken:
(i)Form a private company as per the procedure.
(ii) The proprietor of the existing business alongwith some other persons
(generally,family members and friends) or the partners of the existing firms,
are the subscribers to
the Company Memorandum of Association

(iii) Make the newly formed company a partner with the sole-proprietor or
the partners ofthe existing business. For this purpose a fresh partnership
deed is to be executed.
(iv) Make a provision in the new partnership deed for the transfer of all
assets andliabilities of the firm to any one of the partners who will pay off
to the other partners.
(v) Dissolve the partnership with the whole business going to the company
as the solecontinuing partner.

(vi) Every other partner of the firm (or the proprietor) gets shares in the
company in lieuof his interest in the firm on dissolution.
Name
The name of a corporation is the symbol of its personal existence. Any
suitable namemay be selected subject, however, to the following
instructions:
i. No company can be registered with a name which in the opinion of the
CentralGovernment is undesirable.

ii. The name of the company should not be identical with or should not too
nearly
resemble, the name of another registered company, for such name may
bedeclared undesirable by the Central Government.
iii. Whatever be the name of the company if the liability of the members is
limitedthe last word of the name must be Limited and in the case of a private
company

Private Limited
iv. Name of the Company must be printed on the outside of every place
where thebusiness of the company is carried on. Such name including the
address of theregistered office, must also be mentioned on all business
letters and other officialpublications, on all negotiable instruments issued
or endorsed by the company andon all other orders, receipts, etc.

Application for Availability of Name

The promoters should select three to five alternative names, quite distinct
fromeach other.
The names should suggest, as far as possible, the main objects of the
proposedcompany.
The names should not too closely resemble with the name of any other
registeredcompany.

 The official guidelines issued by the Central Government should be

followedwhile selecting the names. Besides, the names so selected
should not violate theprovisions of the Emblems and Names
(Prevention of Improper Use) Act, 1950.
The Deptt. Of Company Affairs has advised the ROCs to make
arrangements forallowing the promoters and their representatives to
ascertain the availability ofproposed names. This will ensure that the
names applied for would be madeavailable promptly when an
application for this purpose is made subsequently bythe promoters

 Apply in form 1-A to the Registrar of Companies have jurisdiction

alongwith afiling fee of Rs. 500, to ascertain which of the selected names
is available .The feecan be deposited in cash at the counter of the office of
the Registrar or by postalorder.

Company to be Registered within 6 Months of Approval of the Name

After scrutiny of the application for availability of name and finding no
objectionto the proposed name, the Register of Companies informs the
promoters to theincorporation of company by that name within 7 days of
receipt of application. The promoters should complete all other
formalities for registration within 6months from the date of approval of
name by Registrar.

 Various documents required for the registration of company must be

filedsufficiently well before the period of six months so that the company
obtains thecertificate of incorporation on a date which is within 6 months
of approval ofname, after these documents are vetted by ROC.
If, for any reason the formalities cannot be completed, the promoters
should applyfor revalidation of name by filling Form 1A afresh alongwith
a request letter onplain paper stating the reason together with a fee of Rs.
500 giving completereference to the letter of the Registrar.

 If none of the names suggested is available, the promoters should apply

againselecting fresh names, or removing the objections raised, within a
period of onemonth from the date of the letter.
If no action is taken within this period, on the rejection of the name,
nameavailability application is to be made afresh alongwith a fee of Rs. 500 .

The promoters may, however, make representation the Registrars refusal to

thefollowing authoritiesnies Act. However, the Central Government may
direct thatcertain provisions of the Companies Act shall not apply or
shallapply only with such exceptions, modifications and adaptionsas may
be specified to such government companies.

Foreign Companies

Non Government Companies

It is controlled and operated by a private capital
Foreign Companies
By this, we mean a company incorporated in a country outsideIndia
under the law of that other country and has establishedthe place of
business in India.

One Man Company

There is another important type of company which is called as one man
company.
One Man Company
One man company is a company in which one man holdspractically the
whole of the share capital of the company, and inorder to meet the
statutory requirement of minimum numberof members, some dummy
members who are mostly hisfriends or relations, hold just 1or 2 shares
each. It is like anyother company is a legal entity distinct from its members.
Thedummy members are usually nominees of the principalshareholder who
is the virtual owner of the business and who
carries it on with limited liability.

Procedure of Conversion of a Private Company into

a Public Company
A private company must by law include the following condi-tions in its
Articles of Association :a.The right to transfer its shares is restricted
b. The number of members cannot be more than fifty. In calculating such
number, employees / ex-employees who are also shareholders of the
company are not to be considered.

c. The company cannot invite subscriptions from the public for

subscribing to the share capital or debentures of the company
d. The company cannot invite or accept deposits from any member of the
public other than members, directors and their relatives

A company which is not a private company is a public company and need

not be bound by the above restrictions. In view of the restrictive conditions
applicable to private companies, often,it becomes necessary to convert a
private company to a public company. This article aims to give the
procedure for such conversion.

Following is the procedure to convert a private company into a

public company :" Pass resolution in board meeting approving conversion
" Convene general meeting of members for alteration of name
clause of Memorandum of Association and Articles of
Association and pass special resolution thereat.
" Make application to the Registrar of Companies (RoC) for approving
conversion to public company. The application must be accompanied
with the following documents :-

i. Form No.23 (with requisite filing fees) for special resolution

passed for conversion of Private Company into Public
Company u/s 44 of the Companies Act, 1956 and for
altering the Articles of Association u/s 31 of the Companies

Procedure of Conversion of Public Company into

Private Company
public company is subject to several legal provisions which aprivate
company is not required to comply with. Since privatecompanies are
generally owned by fewer people and are closelyheld, several relaxations
in law have been made available toprivate companies. As a result, the
management may be of the
opinion that it would be preferable to convert a public companyinto a
private company. This article aims to give a broadoverview of the
procedure involved. A

Following is the procedure to convert a public company into a

private company :" Pass resolution in board meeting approving conversion
" Convene general meeting of members for alteration of name clause of
Memorandum of Association and Articles of
Association and pass special resolution thereat." Make application u/s
31 of the Companies Act, 1956 to the Registrar of Companies (RoC) for
approving conversion to public company. The application must be
accompanied with the following documents :-

i. Form No. 23 (with requisite filing fees) in respect of special

resolution passed u/s 31 of the Companies Act, 1956 for
alteration of Articles for converting Public Company into
Private Company along with a copy each of (a) Notice calling

The process of forming a company can be divided into four

distinct stages:
a.Promotion
b. Registration or incorporation
c. Capital Subscription
d. Commencement of Business.

As regards a private company, it needs to go through the firsttwo stages

only. As soon as it receives the certificate of incorpo-ration, it can
commence business. This is so because it cannotinvite the public to
subscribe to its shares and must arrange toraise the capital privately. But
Public Company has to go
through all of the four stages.

We shall now discuss each of these four stages.

Promotion
This is the first stage in the formation of a company. It refers tothe entire
process by which a company is brought into existence.It starts with the
conceptualization of the birth of a companyand determination of the
purpose for which it is to be formed.Do you know what we mean by
promoters?

Promoters
The persons who conceive the company and invest the initialfunds are
known as the promoters of the company. Thepromoters enter into
preliminary contracts with vendors andmake arrangements for the
preparation, advertisement and thecirculation of prospectus and
placement of capital. However, aperson who merely acts in his
professional capacity on behalf ofthe promoter (e.g. lawyer, CA, etc) for
drawing up the agree-ment or other documents or prepares the figures on
behalf of
the promoter but the person to whom the promoter pays isnot a promoter.

Pre-Incorporation or Preliminary
Contracts
The promoters of a company usually enter into contract toacquire some
property or right for the company, which is yet to be incorporated. Such
contracts are called Pre-Incorporation orPreliminary Contracts

Registration of the Company

Once the documents have been prepared, vetted, stamped andsigned,
they must be filed with the Registrar of Companies forincorporating the
Company. The following documents must be
filed in this connection: -

1. The Memorandum of Association duly signed by subscribers and the

Articles of Association, if any signed by subscribers to the
Memorandum of Association
2. An agreement, if any, which the company proposes to enter into with
any individual for appointment as its managing director or whole-time
director or manager

3. In addition to the above, in case of a public company, the following

documents must also be filed: 1. Written consent of directors in Form 29 to agree to act
as directors
and their written consent to act as directors
and take up qualification
shares.
2. The complete address of the registered office of the
company in
Form 18.

3. Details of the directors, managing director and

company in Form 32.

manager of the

4. A statutory declaration in Form 1 by an advocate,

attorney or
pleader entitled to appear before the High
Court or a company
secretary or Chartered Accountant
in whole - time practice in India who
is engaged in the
formation of the company or by a person who is
named as a director or manager or secretary of the
company that the
requirements of the Companies Act
have been complied with in respect
of the registration
of the company and matters precedent and
incidental
thereto.

Certificate of Incorporation
Once all the above documents have been filed and they arefound to be in
order, the Registrar of Companies will issueCertificate of Incorporation of
the Company. This document isthe birth certificate of the company and is
proof of theexistence of the company. Once, this certificate is issued,
thecompany cannot cease its existence unless it is dissolved byorder of
the Court.

Thank You
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