The Companies Act, 2013 details the regulations and company registration papers essential for the incorporation of a company. In this article, we will understand all such rules and documents listed in the Act. To begin with, let’s define the promoters of a company.
Section 2(69) of the Companies Act, 2013, defines promoters as an individual who:-
Hence, we can say that promoters are people who originally come up with the idea of the company, form it and register it. However, solicitors, accountants, etc. who act in their professional capacity are NOT promoters of the company.
Section 3 of the Companies Act, 2013, details the basic requirements of forming a company as follows:
Section 7 of the Companies Act, 2013, details the procedure for incorporation of a company. Here is the procedure:
To incorporate a company, the subscriber has to file the following company registration papers with the registrar within whose jurisdiction the location of the registered office of the proposed company falls.
Once the Registrar receives the information and company registration papers, he registers all information and documents and issues a Certificate of Incorporation in the prescribed form.
The Registrar also allocates a Corporate Identity Number (CIN) to the company which is a distinct identity for the company. The allotment of CIN is on and from the company’s incorporation date. The certificate carries this date.
The company must maintain copies of all information and documents until dissolution.
During the formation of a company, an individual can:
In such cases, the individual is liable for action for fraud under section 447.
If a company is already incorporated but it is found at a later date that the information or documents submitted were false or incorrect, then the promoters, first directors, and persons making a declaration is liable for action for fraud under section 447.
If a company is incorporated by furnishing false or incorrect information or representation or suppressing material facts or information in the documents furnished, the Tribunal can pass the following orders (if an application is made and the Tribunal is satisfied with it):
Before passing an order, the Tribunal has to give the company a reasonable opportunity to state its case. Also, the Tribunal should consider the transactions of the company including obligations contracted or payment of any liability.
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According to Section 9 of the Companies Act, 2013, these are the effects of registration of a company:
Q: What is the effect of the Memorandum and Articles of Association?
Ans: According to Section 10 of the Companies Act, 2013, registering the Memorandum and Articles of Association binds the company and its members to the extent that they themselves had signed the same.