INCORPORATION (REGISTRATION)
OF A COMPANY :
Section overview
Process of incorporation
Registration of memorandum and articles
Effect of registration
Process of incorporation
The process of incorporation usually involves the
following steps:
- Getting availability of suitable name from the
registrar of companies
- Preparing memorandum of association, articles of
association of proposed company along with
supportive documents.
- File the above documents along with application
form for incorporation to registrar.
- Registrar shall issue the certificate of
incorporation of company upon being satisfied that
all the requirements have been complied with.
Registration of memorandum and articles
[Section 16]
Filing with Registrar
There shall be filed with the registrar an application on the specified form containing
the following information and documents for incorporation of a company, namely:
(a) a declaration of compliance with all of the requirements of Companies Act,
2017 in respect of registration;
(b) memorandum of association of the proposed company signed by all
subscribers, duly witnessed and dated;
(c) articles of association (optional for company limited by shares) signed by the
subscribers duly witnessed and dated; and
(d) an address for correspondence till its registered office is established and
notified.
Revised documents / Removal of defects
Where the registrar is of the opinion that any document or information contains any
matter contrary to law or does not otherwise comply with the requirements or is not
complete owing to any defect, error or omission or is not properly authenticated, the
registrar may either require the company to file a revised document or remove the
defects or deficiencies within the specified period.
Refusal by registrar
Where the applicant fails to remove the deficiencies
conveyed within the specified period, the registrar may
refuse registration of the company.
Appeal to Commission
The subscribers of the memorandum or any one of them
authorised by them in writing may, within 30 days of the
order of refusal, prefer an appeal to the Commission.
An order of the Commission shall be final and shall not be
called in question before any court or other authority.
Criteria for registration
If the registrar is satisfied that all the requirements of
Companies Act, 2017 and the rules or regulations made
thereunder have been complied with, he shall register the
memorandum and other documents delivered to him.
Example 18: Refusal of registration
Question: On 29 April 2012, a memorandum of association of AB
Limited was filed for registration in the office of Registrar. However, on
25 May 2012, a letter from the registrar office was received by the
subscribers to the memorandum in which the registration was refused
on the ground that the principal line of business clause stated in the
memorandum was inappropriate.
Describe what course of action is available to AB Limited in the above
situation, according to the Companies Act, 2017.
Answer:
The subscribers of the memorandum of association of AB Limited or any
one of them, authorised by them in writing, may appeal to the
Commission within thirty days of the order of refusal.
An order of the Commission shall be final and shall not be called in
question before any Court or other authority.
Certificate of incorporation
On registration, the registrar shall issue a certificate of
incorporation that shall state:
(a) the name and registration number of the company;
(b) the date of its incorporation;
(c) whether it is a private or a public company;
(d) whether it is a limited or unlimited company; and
(e) if it is limited, whether it is limited by shares or limited by
guarantee.
Certificate to be Conclusive evidence
The certificate shall be signed by the registrar or
authenticated by the registrar‘s official seal.
The certificate shall be conclusive evidence that the
requirements of Companies Act, 2017 as to registration have
been complied with and that the company is duly registered
Effect of registration [Section 18]
The registration of the company has the following effects, as from the
date of incorporation:
(a) the subscribers to the memorandum, together with such other
persons as may from time to time become members of the
company, are a body corporate by the name stated in the certificate
of incorporation;
(b) the body corporate is capable of exercising all the functions of an
incorporated company, having perpetual succession and a common
seal;
(c) the status and registered office of the company are as stated in,
or in connection with, the application for registration;
(d) in case of a company having share capital, the subscribers to the
memorandum become holders of the initial shares; and
(e) the persons named in the articles of association as proposed
directors, are deemed to have been appointed to that office.
Example 19: Effects of registration
Question: The Registrar, after registering
the memorandum and articles of
association, has issued the certificate of
incorporation to Shahbaz Limited, a
company with an authorized share capital
of Rs. 300 million. Under the Companies
Act, 2017 briefly describe the effects of
such registration.
Answer:
The registration of Shahbaz Limited has the following effects as from the
date of incorporation:
- The subscribers to the memorandum, together with such other
persons as may from time to time become members of the
company, are a body corporate by the name stated in certificate of
incorporation;
- The body corporate is capable of exercising all the functions of an
incorporated company having perpetual succession and a common
seal;
- The status and registered office of the company are as stated in, or
in connection with, the application for registration;
- The subscribers to the memorandum become holders of the initial
shares;
- The persons named in the articles of association as proposed
directors, are deemed to have been appointed to that office.
