Registration of company in India
Before proceeding to register a company, the promoters have to inter alia decide the following aspects.
- Type of Company
- Name of company
- Preparation of Memorandum of Association and Articles of Association
A promoter is required to take the following steps before getting the company duly registered:
- An application in the prescribed form and with the prescribed fees (Rs.500 w.e.f. 1994) is to be made to the Registrar of Companies to ascertain whether the name under which the intended company is to be started is available for adoption.
- The promoters have to file an application with the Registrar for registration of the company.
The application for registration must be accompanied by the following documents:
- the memorandum of association duly stamped, signed and witnessed. It must be signed by at least seven persons in the case of a public company and by two if it relates to a private company. The signatories must also append their address, occupation, and the number of shares subscribed for. The signatories must sign in the presence of a witness. But a firm cannot be a signatory to the memorandum as it has no separate existence of its own. Only an individual or some legal entity can be a signatory to the memorandum.
- the articles of association properly stamped duly signed by the signatories to the memorandum and witnessed. A public company which does not prepare its own articles may adopt Table ‘A’, the model set of articles. A company adopting Table ‘A’ must specify in the memorandum ‘Registered without articles’ which will be taken to mean that the company has adopted Table ‘A’.
- a written consent of each person named in the articles as a director to act in that capacity and the undertaking to buy qualification shares as mentioned in the articles of the company and to pay for them.
- the agreement the company proposes to enter into with any individual for appointment as its managing or whole time director or manager.
- a statutory declaration stating that all the requirements of the Act regarding registration have been complied with. It must be signed by an advocate of the Supreme court, attorney or pleader entitled to appear before a High Court, or a chartered accountant practising in India, who is engaged in the formation of the company or by a person named in the articles as a director.
- if the Registrar is satisfied that all the requirements have been complied with by the company and that it is authorised to be registered under this act, he shall certify under his hand that the company is incorporated. This will result in a certificate of incorporation being issued by the Registrar earning the company a separate legal status, perpetual succession and a common seal.
- within 30 days of incorporation, intimation of the address of the company must be filed with the Registrar.
Memorandum of association
Memorandum of association is a document of supreme importance in relation to the company. It contains the basic conditions on which the company is incorporated or is allowed to be incorporated. It is one of the two public documents available for inspection. No company can be registered under the Companies Act, 1956, without memorandum of association. The Indian Company Law have named the fundamental charter as the memorandum of association similar to English expression.
Contents of the memorandum
- The Name clause
- Registered office clause
- Object clause
- Liability clause
- Capital clause
- Association clause
Articles of association
The other important document is the Articles of Association which contains the rules and regulations relating to the internal management of the company.
The important clauses contained in the document are:
- Calls of shares
- Share certificates
- Transfer and transmission of shares
- Forfeiture of shares
- Lien on shares
- Borrowing powers of the company
- Voting rights of the shareholders
- General meetings
- Board of directors and their powers
- Common seal and its use
- Quorum of Board Meetings and General Meetings
- Resolution by circulation
- Service of notice, etc.
The articles constitute a contract between the company and its members and members inter se defining their respective rights and duties and are binding on the members.
Documents to be filed for registration (section 33)
The complete list of documents that must be filed with the Registrar of Companies of the State in which the registered office of the company is to be situated is as follows:
- The Memorandum of Association
- The articles of association
- An agreement, if any, which the company proposes to enter into with any individual for appointment as its managing or whole time director or manager.
- A statutory declaration in Form No.1 by an advocate, an attorney or pleader entitles to appear in a High Court or a secretary or a 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 all requirements of the act and the rules thereunder have been compiled within respect of registration and matters precedent and incidental thereto (Section 33).
- If the first directors are appointed by the articles:
- Written consent of each director to act signed by him or by an agent duly authorised in writing in Form No. 29 and
- An undertaking in the same Form No.29, in writing, to take from the company and to pay for his qualification shares, if any, or signed the memorandum for shares not being less than his qualification shares (Section 266).
- The address of the registered office of the company may be filed in Form No.18 – This has, in any case, to be filed within 30 days after the date of incorporation (Section 146).
- Particulars regarding directors, managing director, manager and secretary may also be filed in Form no.32 in duplicate although it may be filed within 30 days of incorporation.