CA INTERMEDIATE

CORPORATE AND OTHER LAWS

PART – I: COMPANY LAW

UNIT 2: INCORPORATION OF COMPANY & MATTERS INCIDENTAL

THERETO
[Section 1 – 22 &
Companies (Incorporation) Rules, 2014]

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There are many ways of doing a business – one can start a sole proprietorship business or
can form a partnership firm or a limited liability partnership. However once business grows
then it becomes essential to form a company because of various advantages it offers.

Before incorporating a company, let us first understand the types of companies which can
be formed.

Types of Companies

1) Public Company – Min. 7 members required – they use word “Ltd” at the end of their
name
2) Private Company – Min. 2 members required – they use word “Pvt Ltd” at the end of
their name
3) One Person Company – 1 person required (but he/she needs to specify one nominee
who will take over the company in case of his/her death or incapacity to contract). Further
nominee can be changed anytime.

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Further the above companies can be limited (that is liability of members is limited upto the
share capital taken by them or guarantee provided by them) or it can be unlimited
(members have unlimited liability – however it is generally not found in India).

Govt. co. are not required to put Pvt. Ltd. or Ltd. if they have not defaulted in filing its
financial statements or annual return.

If number of members in public or private falls below the prescribed limit and company
doesn’t correct the same within 6 months then on expiry of 6 months every member of
the company who is aware of this fact shall be severally liable (can also be sued severally)
for the payment of whole debts of the company taken after those 6 months.

Before we go futher let’s understand how company works – Company is a separate entity
where owner invest money (share capital) and directors/top level management takes care
of the business.

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Liability of the owner is limited to the share capital taken by him [E.g. Mr A invested 10
Lakhs in ABC ltd. then maximum amount Mr. A can lose if company fails is 10 Lakhs].
However in most of the companies the majority shareholder becomes director of the
company to controls the affairs of the company – like Mukesh Ambani is a majority
shareholder and also managing director of Reliance Industries Ltd.
To make any decision – Board meeting of directors, General Meetings of members are
held – and resolutions (ordinary >50% agree or special >75% agree) are passed therein to
ensure majority person agreed on the same.

Further various details about the company like its name, object, registered place,
authorized share capital and liability of the members are written a document called
Memorandum of Association (MOA) – This document is publicly available and it is
presumed that anyone dealing with the company has knowledge of details provided in
MOA.

Further every company has its internal rules and regulations (between members &
company) – This information is written in a document called articles of association (AOA)
and is not publicly available.

Steps for Company Incorporation

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1) Obtain a digital signature certificate of directors/subscribers – this is required to verify
the documents filed (instead of signature - digital signatures are used)
2) Obtain director’s identification number (DIN) for directors – This is director’s ID
3) Get the name of your company approved by MCA- done online
4) File documents with registrar –
a. Memorandum of Association (MOA) and Article of Association (AOA) duly signed by
subscribers to MOA
b. Declaration by person who is engaged in the formation of the company (advocate,
practicing CA/CS/CMA) and by person named in the AOA (directors/manager/ secretary)
that all requirements of this act and rules in respect of registration & incidental matter
have been complied with
c. Declaration that all the subscribers have paid the amount for shares agreed to be taken
by them
d. Declaration from Subscribers to MOA and first directors in AOA – that –
i. he is not convicted of any offence in promotion/formation of any company
ii. he has not been found guilty of any fraud or of any breach of duty to any company
under companies act during the last five years and
iii. that all the documents filed with the Registrar for registration of the co. contain correct
and complete information which is true to the best of his knowledge and belief;
e. The address for correspondence till its registered office is established;
f. Particulars (such as name, surname, address, nationality, DIN) of first directors and every
subscriber to the MOA
g. Interest of first directors in other firm/body corporate along with their consent to act as
a director of the company
5) Registrar shall register all the documents and information in the register and based on
those documents shall issue a Certificate of incorporation (COI)
6) Company will be allotted a corporate identification number (CIN) on their COI

* Note company shall maintain and preserve copies of documents and information filed
with ROC
- at its registered office

Consequences of Furnishing False/Incorrect Information/Suppression of Material Facts

1) During Incorporation Process – Person who is aware of this fact – liable for action or
fraud u/s 447

2) Post Incorporation – After incorporation if it is proved that co. formed on the basis of
incorrect information or by suppressing material information in any document/declaration
filed then promoters/first directors and person making the declaration shall be liable for
action for fraud u/s 447.

Further Tribunal may on an application made to it and after being satisfied can pass an
order for -
a) Name removal
b) Winding up

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c) Unlimited Liability
d) Change of MOA/AOA (if in public interest of interest of co./members/creditors)
e) Any other order as it may deems fit

Provided before making any such order:

1) The co. shall be given a reasonable opportunity of being heard and
2) The tribunal shall take into consideration, the transactions entered into by the company

Simplified Proforma For Incorporating Company Electronically (SPICe)

The Ministry of Corporate Affairs (MCA) has taken various initiatives for ease of doing
business. In a step towards easy setting up of business, MCA has simplified the process of
filing of forms for incorporation of a company through Simplified Proforma for
incorporating company electronically.

One Person Company (OPC) – One Member Company

Use the word “One Person Company” below the name of the such company

1) Every OPC should provide a nominee name in MOA

2) Nominee should give his consent – filed with ROC at the time of incorporation
3) Nominee can withdraw his consent later on
4) Member of OPC may change nominee anytime – inform the Co. & Co. informs the ROC
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5) Change of nominee name is not treated as change of MOA
6) Only natural person who is Indian citizen and resident of India (>=182 days stay in
previous FY) can become member or nominee of OPC
7) One person can become member of only one OPC and one person can be nominee of
maximum one OPC – If any person becomes member of 2 OPC (1 he is already, another he
becomes because of being nominee) – then correct this within 182 days.
8) Minor cannot become member/nominee of OPC
9) OPC cannot be converted into section 8 co. (charitable co.), however OPC can be
converted into pvt or pub. co. but only after 2 years of incorporation or
If its capital >50Lakhs or avg. turnover > 2crores.
10) OPC cannot carry out non-banking financial investment activities

Section 8 Company
Companies with charitable objective are granted certain exemptions from the companies
act – however to incorporate a section 8 company - license from central government (CG)
is required.

Benefits available – Can call general meeting of members by giving 14 days’ notice instead
of 21 days + Requirement of minimum no. of directors, independent directors doesn’t’
apply.
No need to constitute nomination & remuneration committee and shareholders
relationship committee.
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For what charitable objectives section 8 co. can be incorporated ?
To promote the charitable objects of commerce, art, science, sports, education, research,
social welfare, religion, charity, protection of environment etc. Such company intends to
apply its profit in promoting its objects and prohibiting the payment of any dividend to
its members.

Section 8 company are limited liability company but not required to put word pvt ltd. or
ltd. in their name.

After obtaining the license – Application can be made to ROC for registering a section 8
company – ROC then registers the company under this act.

Following points to be noted related to section 8 company –

1) A firm may be its member
2) Cannot alter MOA or AOA except with CG approval (powers deleated to ROC)
3) It can convert into company of any other kind by pasing a special resolution at general
meeting

Revocation of License of Section 8 Co. By Central Govt. (Powers Delegated To Regional

Director) - When?
1. Co. contravenes any condition which was put while issuing license or
2. Where affairs of the co. are conducted fraudulently or
3. Violated the object of the co. or
4. Prejudicial to the interest of the co. or

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CG will give a written notice for revolation of licence an opportunity of being heard to the
company and if it deems fit – can cancel the license – ROC then shall put the word “Pvt
Ltd” or “Ltd” on its name.

If license is revoked then if it is in the public interest – CG can order winding up of the
company or order its amalgamation with another section 8 co. with similar object.
However before making any order opportunity of being heard will be given to the
company.
If wound up or dissolved – then asset remaining after paying all debts will be transferred
to another sec 8 co. with similar object – subject to the conditions put by the Tribunal.
Alternatively proceeds may be transferred to insolvency & bankruptcy fund.

Penalty for contravention of provision under this section – Fine 10 Lakhs to 1 Crore on
company + its directors/officer in default imprisonment <= 3 years or fine 25K to 25Lakhs
or both

Effects of Registration of the Company - Section 9

1) From the date of incorporation, the co. becomes a legal person separate from the
incorporators; and there comes into existence a binding contract between the company
and its members as evidenced by the MOA & AOA.
2) It has perpetual existence until it is dissolved by liquidation or struck out of the register.
3) A shareholder who buys shares, does not buy any interest in the property of the
company but in certain cases a writ petition will be maintainable by a company or its
shareholders
4) A company may purchase shares of another company and thus become a controlling
company – however each co. will remain a separate person
5) Even if entire share capital has been contributed by the Central Govt. and all its shares
are held by the President of India and other officers of the CG – it does not make a
company an agent either of the President or the CG.

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Memorandum of Association (MOA) Section 2(56)
It is the base document for the formation of the company and along with the AOA and is
regarded as the Constitution of the Company.
All the contents of MOA & AOA needs to be in compliance of the Companies Act and other
applicable legislations. Company law is superior than MOA & AOA.
Section 6 states that MOA or AOA cannot override the provision of the act but if any other
section specifically mentions that article is superior then we will treat it accordingly for the
matters contained in that section.

Why MOA Is Registered With ROC

1) It contains the object for which the company is formed and therefore identifies the
possible scope of its operations beyond which its actions cannot go.
2) It enables shareholders, creditors and all those who deal with company to know what
its powers are and what activities it can engage in.
3) A memorandum is a public document under Section 399. Consequently, every person
entering into a contract with the company is presumed to have the knowledge of the
conditions contained therein
4) The shareholders must know the purposes for which his money can be used by the
company and what risks he is taking in making the investment.

Co. cannot depart from provisions of MOA and cannot enter into a contract or engage in
any trade or business which is beyond the power confessed on it by MOA. If it does so, it
would be ultra vires the company and is void.

Contents of MOA - Clauses

1) Name Clause – Name of the Co. with last word as “Ltd.” for public co. and “Pvt. Ltd.” for
private Co. – however section 8 company is exempt from using Ltd/Pvt Ltd.
2) Domicile Clause - State in which registered office of the co. is situated – co. has to
submit thedetails of registered office together with verification of registered office <=30
days of incorporation. If ROC has the reason to believe that co. is not carrying on any
business – he may order physical verification of registered office of the co. and can order
removal of name of the co.

3) Object of the company and any matters necessary in furtherance thereof

4) Liability of members of the co. (whether ltd. or unlimited) – If ltd. then whether –

a. Limited by shares – Amount of authorised share capital and its division thereof into
shares of fixed amount and no. of shares subscribers to MOA agreed to take – member’s
limited will be limited upto the amount unpaid on shares held by member

b. Limited by guarantee – Amount which each member undertakes to contribute –

i. To assets of the co. in the event of its winding up – for debts incurred by the co while he
is a member or within 1 year after he ceases to be a member
ii. To costs, charges and expenses of winding up and
iii. For adjustment of the rights of the contributories among themselves

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5) Subscription Clause – File MOA and AOA signed by susbcribers to ROC

Instead of making a new MOA & AOA – Standard format can be picked as given in
Schedule I of the companies act.

Provisions Related To Company’s Name

Name contained in MOA–
1) Shall not be Identical or resembles to the name of any existing company registered
under companies act
2) Its use should not constitute an offence under any law for the time being in force
3) It should not be undersirable in the opinion of central government (power delegated to
ROC)

Name is considered undesirable if –

1) Any word or expression which is likely to give the impression that the company is in
anyway connected with, or having the patronage of, the CG/SG/Local
authority/Corporation constituted by CS/SG under any law for the time being in force.
2) Such word or expression, as may be prescribed – however with approval of CG can be
used

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Companies (Incorporation) Rules, 2014 –
Rule 8B - Following words cannot be used without CG approval - Board; Commission;
Authority;
Undertaking; National; Union; Central; Federal; Republic; President etc.
Requirements IRDA/RBI/SEBI/MCA to be complied with – If the proposed name includes
Insurance,
Bank, Stock Exchange, Venture Capital, Asset Management, Nidhi, Mutual Fund etc..

Rule 9 - Reservation of Name

A person may make apply for reserving the name of the proposed company or new name
of existing company to ROC – in such form and manner & with such fee as may be
prescribed

Based on application – ROC shall reserve the name –

1) For 21 days from date of its approval (in case of new company formation) and
2) For 60 days from date of its approval (in case application is made for change of name of
the existing company)

Note - If it is found the name reservation is applied by furnishing wrong/incorrect

information then –
1) If co. has not been incorporated – reserved name shall be cancelled – person who has
made application liable to penalty upto 1 Lakh
2) If company has been incorporated – ROC after giving the co. opportunity of being heard
-
a. Either direct the co. to change its name within 3 months, after passing ordinary
resolution or
b. Strike off the name from register of companies or
c. Make petition for winding up of the co

Cases where company has to change its name

1) If company registered with a name which is identical (in the opinion of CG) with the
name of existing co. then CG may direct the co. to change its name and co. has to change
the name <=3 months of such direction by passing an ordinary resolution.
2) When holder of a trademark - make an application to CG that name of the co. is too
identical with his/her registered trademark. For this application can be made <= 3years of
incorporation of co/ change of name of the co. and if CG finds it identical to existing
registered trademark – it may direct the co. to change its name. Co. then has to change its
name <= 6 months of such direction by passing an ordinary resolution.

Doctrine of Ultra Vires

Anything done by co. which is done in contravention of its MOA is ultra vires and is void –
i.e. it does not binds the co. - The company cannot make it valid, even if every member
assents to it. Co. or contracting party cannot sue on it. (cannot go in court).

This rule is meant to protect shareholders and the creditors of the company
However If any act is ultra vires the AOA , then company can alter its AOA to make it valid
– If act is ultra vires (beyond the powers of) directors only, the shareholders can ratify it.

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Case law Ashbury Railway Carriage and Iron Co. Ltd. vs Riche
The company entered into a contract with M/s. Riche, a firm of railway contractors to
finance the construction of a railway line in Belgium. On subsequent repudiation
(cancellation) of this contract by the company on the ground of its being ultra vires, Riche
brought a case for damages on the ground of breach of contract, as according to him the
words “general contractors” in the objects clause gave power to the company to enter
into such a contract and, therefore, it was within the powers of the company.
More so because the contract was ratified by a majority of shareholders.

Judgement - The term “general contractor” was interpreted to indicate as the making
generally of such contracts as are connected with the business of mechanical engineers.
The Court held that if every shareholder of the company had been in the room and had
said, “That is a contract which we desire to make, which we authorise the directors to
make”, still it would be ultra vires. The shareholders cannot ratify such a contract, as the
contract was ultra vires the objects clause, which by Act of Parliament, they were
prohibited from doing.

Alteration of MOA Section 13

1) Name Clause – Changing name of the company requires special resolution and approval
of central govt. (powers are delegated to ROC) – however no approval necessary for
adding/deleting the word “Private”. Once name is changed a new incorporation certificate
is issued by ROC. Old name should be also be written as “former name XXXX” for 2 years
after name change is effected.
Where co. change its name or obtains a new name then within 15 days from such change –
it shall inform ROC by giving a notice along with order of CG – ROC then make necessary
changes in the register, certificate of incorporation & MOA.

In case of default – Penalty –

Co. – 1000 per day till default continues and
Officer in default 5000 to 1 Lakhs

2) Domicile Clause – This clause mentions the state in which company is incorporated and
in order to change the state – approval of CG (powers are delegated to regional director) is
required – CG shall dispose of the application of change of place < 60 days however before
passing the order CG may satisfy itself that
a) the alteration has the consent of the creditors, debenture-holders and other persons
concerned with the company, or
b) the sufficient provision has been made by the company either for the due discharge of
all its debts and obligations, or
c) adequate security has been provided for such discharge.

Special resolution with approval of CG filed with ROC of each state and ROC of the state
where office is shifted shall issue a fresh certificate of incorporation within 30 days of
receiving confirmation.

Further change of registered office can happen -

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Within same city – Only board resolution is required – notice to be given to ROC within 30
days of resolution.
Within same state (from one city to another city) – Special resolution required and notice
to ROC to be given within 30 days of passing the resolution
Within same state (from one ROC’s jurisdiction to another) – Special resolution required
+ permission of regional director – RD shall confirm within <=30days from receipt of
application and co. shall file the confirmation to ROC <=60 days of the date of
confirmation, ROC then certify the registration <=30days from date of filing of such
confirmation.

Default in above provisions – company & officer in default penalty 1000 per day upto 1
Lakhs

3) Object Clause – Company which raise money from public generally specifies the object
for which it will be used but if later on after raising the money co. change its object to
apply unutilized amount on something else then co. first needs to pass a special resolution
through postal ballot (courier) and

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a. Publish details of resolution in newspaper (one regional and one English) + place on co.
website if any and
b. Promoters/controlling shareholders should give dissenting shareholders (who do not
agree for object change) an opportunity to exit

*ROC shall then register alternation in MOA and certify registration <=30 days of date of
filing special resolution

4) Liability/Capital Clause – Special resolution required to change this clause. Further any
alteration in MOA (by a co. limited by guarantee & not having share capital) which intends
to give a person right to participate in the divisible profits of the co. otherewise than as a
member is void

Sec 15 - Every alteration made in MOA or AOA shall be noted in every copy of MOA or
AOA. If a company makes any default in complying with the states provisions then co. & its
defaulting officer shall be liable to a penalty of 1000 for every copy of MOA or AOA issued
without alteration.

Article of Association [AOA] Section 5

Contents of AOA –
(1) Article of association of a company contains internal rules and regulation for the
management of the company.

(2) Inclusion of matters: A company may also include such additional matters in its
articles as may be considered necessary for its management.

(3) Entrenchment (difficult banana/rokna from making changes): Usually an AOA may be
altered by passing special resolution but entrenchment makes it more difficult to change
it. So entrenchment means making something more protective.
AOA may states that some conditions or procedures which are more restrictive than
special resolution which needs to be applied to make a change in a particular clause of
AOA.
The provisions for entrenchment shall only be made on formation of a company
If entrenchment provisions are to be inserted after the incorporation then
a) In case of private co. – Amendment in AOA should be agreed by all the members of the
company &
b) In the case of a public co. - Amendment in AOA should be done by a special resolution
Where the AOA contain provisions for entrenchment, whether made on formation or by
amendment, the company shall give notice to the Registrar of such provisions in such form
and manner as may be prescribed.

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(4) There are certain standard formats of AOA given in schedule I in forms specified in
Tables, F, G, H, I and J (as may be applicable to such co.) – company may adopt all or any
of the regulations contained in the model AOA.

(5) Company registered after the commencement of this Act: All the regulations of model
AOA will apply to the company unless a contrary provision appear in the company’s own
AOA.

(6) Section does not apply on company registered under any previous company law:
Nothing in this section shall apply to the AOA of a company registered under any previous
company law, unless amended under this Act.

Doctrine of Indoor Management

This doctrine states that person dealing with the co. cannot be assumed to have
knowledge of internal problems of the company. He can simply assume that all internal
proceedings are as per documents submitted with the Registrar of Companies.

Stakeholders are entitled to take it for granted that necessary meetings were held and
resolutions therein were passed properly.

However “Doctrine of Constructive Notice” protects a company against outsiders,

however the doctrine of indoor management protects outsiders against the actions of a
company. This doctrine is a possible safeguard against the possibility of abusing the
doctrine of constructive notice.

Basis for Doctrine of Indoor Management

1) What happens internal to a company is not a matter of public knowledge. An outsider
can only presume the intentions of a company, but not know the information he/she is not
privy (party) to.
2) The company could escape creditors by denying the authority of officials to act on its
behalf.

Exceptions to Doctrine of Indoor Management (Applicability of doctrine of constructive

notice) - In these cases company is not liable -

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1) Knowledge of irregularity: In case this ‘outsider’ has actual knowledge of irregularity
within the company, the benefit under the rule of indoor management would no longer be
available. In fact, he/she may well be considered part of the irregularity.

2) Negligence: If, with a minimum of effort, the irregularities within a company could be
discovered, the benefit of the rule of indoor management would not apply. The protection
of the rule is also not available where the party does not make proper inquiry.s

3) Forgery: The rule does not apply where a person relies upon a document that turns out
to be forged since nothing can validate forgery. A company can never be held bound for
forgeries committed by its officers.

Effect of Memorandum and Articles [Section 10]

It binds the company and the members thereof to the same extent as if they respectively
had been signed by the company and by each member.

It means that, on the basis of MOA and AOA:

a) Company is liable to members
b) Members are liable to company
c) But normally members are not liable to each other

All monies payable by any member to the company under the memorandum or articles
shall be a debt due from him to the company. [For example a company can recover call in
arrear from a member as forcefully as it is recovering loan due]

Alteration of Articles [Section 14]

AOA is subordinate to MOA and MOA is subordinate to Companies act – so they can’t
contradict the provisions of their higher authority.
Matters as to which the memorandum is silent can be dealt with by the alteration of
article

To alter AOA – special resolution is required

For conversion of companies –
1) Pvt. to public – Just remove restrictions put for private companies – it will automatically
becomes a public company
2) Public to private – special resolution not valid unless approved by an order of central
government.

However old application for conversion pending before tribunal shall be disposed in
accordance with old company law.

File Alteration – Every alteration (& copy of order of CG) needs to be filed with ROC with
printed copy of altered AOA <=15 days – upon which ROC shall register the same

Once alteration is registered, it will be valid as if it was originally contained in the AOA.

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Every alteration made in articles of a company shall be noted in every copy of the articles,
as the case may be

Penalty for default – Company & every officer in default shal be liable 1000 per copy of
AOA issued (without alteration).
Note – Any member may demand (upon payment of fee) - MOA, AOA,
Agreement/Resolution u/s 117 – not embodied in MOA & AOA
Company & officer in default has to supply the above within 7 days of the request
otherwise 1000 penalty for each day upto 1 lakhs

Labeling of Company
Every company shall—
1) Affix its name and address (in legible letters) of its registered office on the outside of
every office or place in which its business is carried on,it should also be in the language
used in that locality
2) Have its name engraved in legible characters on its common seal, if any;
3) Get its name, address of its registered office and the Corporate Identity Number along
with telephone number, e-mail and website addresses, if any, printed in all its business
letters, billheads, letter papers and in all its notices and other official publications; and
4) Have its name printed on hundies, promissory notes, bills of exchange and such other
documents as may be prescribed:

Process of Conversion of Company from One Class To Another Class of Co. Sec 18
1) Alter AOA & MOA
2) File application with ROC – and ROC after satisfying himself shall close the former
registration and issue a fresh certificate of incorporation
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3) Company’s debt, liabilities etc. shall have no impact on account of conversion

Subsidiary Company Not To Hold Shares in Its Holding Company [Sec 19]
No company shall, either by itself or through its nominees, hold any shares in its holding
company & No holding company shall allot or transfer its shares to any of its subsidiary
companies and

Any such allotment or transfer of shares of a company to its subsidiary company shall be
void:
Company which does not have shares – consider that as interest of its members
However in below situation subsidiary co. can hold shares in holding co.
a) Where the subsidiary company holds such shares as the legal representative of a
deceased member of the holding company; or
(b) where the subsidiary company holds such shares as a trustee; or
(c) where the subsidiary company is a shareholder even before it became subsidiary co. to
the holding co.

However, the subsidiary company can vote under clause (a) & (b) above.
E.g. A Ltd. has invested 51% in the shares of PQR Pvt. Ltd. on 31 March 2020. PQR Pvt. Ltd.
have been holding 2% equity of A Ltd since 2011. PQR Pvt. Ltd. can continue to hold 2%
share in its holding co but cannot increase its equity beyond that 2% on or after 31 March
2020.

Exceptions

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Commencement of Business Etc. [Section 10A]
Company cannot commence its business unless –
1) A declaration is filed by a director within a period of 180 days of the date of
incorporation of the company in such form and verified by practing CA/CS or CMA, with
the Registrar that every subscriber to the memorandum has paid the value of the shares
agreed to be taken by him on the date of making of such declaration – and
2) The company has filed with the Registrar a verification of its registered office as
provided in sub-section (2) of section 12.
Co. requiring any approval of sectoral regulators like RBI/SEBI etc.. then their approval
shall also be attached with the declaration.

In case of default – Penalty – On co. 5000 and on every officer in default – 1000 for each
day till default continues upto 1 lakh

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Service of Documents [Section 20]
Once company is registered then any communication (serving documents) -
1) By ROC to Company is done through -
a. Registered post
b. Speed post
c. Courier service
d. Leaving it at registered office
e. Means of such electronic or other form
2) By company to ROC or to its members is done through –
a. Post
b. Registered post
c. Speed post
d. Courier
e. Delivering at office or address
f. By such electronic mode as may be prescribed
Courier means where proof of delivery is provided

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However, a member may request for delivery of any document through a particular mode,
for which he shall pay such fees as may be determined by the company in its annual
general meeting
Nidhi co. only required to serve notice to those member who hold more than INR 1000
face value or > 1% of total paid up share capital of the Nidhi co. whichever is less. For
informing other shareholders Nidhi co. can publish notice in newspaper (which is widely
circulated in the district where registred office is situated) and put the same on its notice
board.

Note – In case of delivey by post – such service shall be deemed to have been effected –
1) In case of notice of meeting – at expiration of 48 hours after letter containing same is
posted; and
2) In any other case – at the time the letter would be delivered in the ordinary course of
post

As per section 21 documents, proceedings, contracts can be authenticated by –

1) Any key managerial personnel
2) An officer or employee of the co. duly authorized by the board in this behalf

Execution of Bill of Exchange, Promisory Note, Hundi Etc.

A company may or may not have a common seal – where it has then it has to affix the
same for specified matters, execution of deeds on behalf of the company.

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 SECTION REFERENCER

Section Title
1 Short title, extent, commencement and application
2 Definitions
3 Formation of company
4 Memorandum
5 Articles
6 Act to override memorandum, articles, etc
7 Incorporation of company
8 Formation of companies with charitable objects, etc
9 Effect of registration
10 Effect of memorandum and articles
11 Commencement of business, etc
12 Registered office of company
13 Alteration of memorandum
14 Alteration of articles
15 Alteration of memorandum or articles to be noted in every copy
16 Rectification of name of company
17 Copies of memorandum, articles, etc., to be given to members
18 Conversion of companies already registered
19 Subsidiary company not to hold shares in its holding company
20 Service of documents
21 Authentication of documents, proceedings and contracts
22 Execution of bills of exchange, etc

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 LIST OF FORMS

Form Number
INC 1 Application for reservation of name e-Form

INC 3 Consent of Nominee as regards One Person Company

INC 4 Change of nominee as regards One Person Company

INC 5 Intimation by One Person Company for exceeding prescribed
threshold more than Rs 50 lakh of share capital or Rs 2 crore of
turnover
INC 6 Conversion of private limited company into an OPC or vice versa

INC 8 Declaration by an Advocate, Chartered Accountant, Cost

Accountant or Company Secretary in practice that all requirements
of the companies act and rules pertaining to incorporation have been
complied with
INC 9 Declaration by each of the subscribers to the memorandum and each
of the first directors named in the articles that he has not been
convicted of any offence for the preceding 5 years and that all the
documents filed with the Registrar are true and accurate.
INC 11 Certificate of Incorporation

INC-11A Certificate of Incorporation on conversion from unlimited company

to limited company

INC-11B Certificate of Incorporation on conversion from a company limited

by guarantee to a company limited by shares
INC 13 Memorandum of Association

INC 14 Declaration by an Advocate, a Chartered Accountant, Cost

Accountant or Company Secretary in practice, that the articles of
association have been drawn up in conformity with the provisions of
Section 8 and rules made thereunder and that all the requirements
concerning the Act and the rules made thereunder in relation to
registration of the company under Section 8 and matters incidental
or supplemental thereto have been complied with.
INC 15 Declaration by each of the persons making the
application(Section 8 companies)
INC 16/17 License issued under Section 8
INC 18 Application to Regional Director for the conversion of Section 8
company to any other kind of company
INC 19 Notice to Regional Director for companies converting from Section 8
to any other kind and inviting objections (if any).

INC 20 Intimation to the Registrar for revocation or surrender of a licence

issued under Section 8

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INC 20A Declaration given by the director for the commencement of business
for a company
INC 22 Notice for change of situation of the registered office of the company
and its verification
INC 22A Active Company Tagging Identities and Verification(ACTIVE)
INC 23 Application to the Regional Director for shifting of registered office
from the jurisdiction of one RoC to another within the same state or
from one state to another state
INC 24 Application to the Central Government for approval for change in
the name of the company
INC 25 A new certificate of incorporation subsequent to change in name
INC 25A Advertisement to be published in a newspaper when a public
company is converted into a private company
INC 26 Advertisement to be published in newspaper for change in the
registered office from one State Government or Union territory to
another
INC 27 Transformation of a public company into a private company and
vice versa, including company limited by guarantee to a company
limited by shares
INC 28 Notice of the order of the court/any other competent authority
INC 32 Simplified Proforma for Incorporating Company electronically
(SPICe)

INC 33 e-Memorandum of association

INC 34 e-Articles of association

INC 35 Application for Goods and services tax Identification number,
employees state Insurance corporation registration plus Employees
provident fund organization registration(AGILE-PRO)

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