Part – I of Chapter XXI deals with companies authorizes to register under this Companies Act, 2013.
COMPANIES CAPABLE OF BEING REGISTERED (SECTION 366):
For the purpose of this Part the “company” includes any partnership firm, limited liability partnership, cooperative society, society or any other business entity formed under any other law for the time being in force which applied for registration under this Part.
Any company formed under any law for the time being in force duly constituted according to law and consisting of seven or more members may at any time register under this Act as a company. This registration shall not be invalid by reason only that it has taken place with a view to the companies being wound up. Oh Yes! A company already registered under this Act, shall not be registered under this Part.
Essential conditions are:
(a) Formed under any law for the time being in force;
(b) Company constituted according to the law; and
(c) Consisting of seven or more members.
In my opinion, a proprietorship and Hindu Undivided Family business may not register as per this Section.
Other Conditions are:
(i) A Company registered under the Indian Companies Act, 1882 or the Indian Companies Act, 1913 or the Companies Act, 1956 shall nit register in pursuance of this Section;
(ii) A company having the liability of its members limited by any Act of Parliament shall not register in pursuance of this section as an unlimited company or as a company limited by guarantee;
(iii) A company shall be registered in pursuance of this Section as a company limited by shares only if it has a permanent paid – up or nominal share capital of fixed amount divided into shares of fixed amount or held and transferable as stock or partly in both form. Not any other person, but only its members should be holders of those shares or that stock.
(iv) A company shall be register in pursuance of this section with the assent of majority of its members as present in person or in proxy at a general meeting summoned for this purpose.
(v) Where a company not having the liability of its members limited by any Act of Parliament or any other law for the time being in force is about to register in pursuance of this Section, the majority shall consist of not less than three – fourths of the members present in person or in proxy at the meeting.
(vi) where a company is about to register as a company limited by guarantee, the assent to its being so registered shall be accompanied by a resolution declaring that each member undertakes to contribute to the assets of the company, in the event of its being wound up while he is a member, or within one year after he ceases to be a member, for payment of the debts and liabilities of the company or of such debts and liabilities as may have been contracted before he ceases to be a member, and of the costs, charges and expenses of winding up, and for the adjustment of the rights of the contributories among themselves, such amount as may be required, not exceeding a specified amount.
In computing any majority, when a poll id demanded regard shall be had to the number of votes to which each member is entitled according to the regulation of the company.
CERTIFICATE OF REGISTRATION OF EXISTING COMPANIES (SECTION 367):
On compliance with the requirements of this Chapter with respect to registration, and on payment of such fees, the Registrar shall certify under his hand that the company applying for registration is incorporated as a company under this Act, and in the case of a limited company that it is limited and thereupon the company shall be so incorporated.
On compliance with the requirement of this chapter, the Registrar shall issue a certificate of incorporation.
VESTING OF PROPERTY ON REGISTRATION (SECTION 368):
All property, movable and immovable (including actionable claims), belonging to or vested in a company at the date of its registration in pursuance of this Part, shall, on such registration, pass to and vest in the company as incorporated under this Act for all the estate and interest of the company therein.
There will be no effect on the ownership of any property of the company.
SAVING OF EXISTING LIABILITIES (SECTION 369):
The registration of a company in pursuance of this Part shall not affect its rights or liabilities in respect of any debt or obligation incurred, or any contract entered into, by, to, with, or on behalf of, the company before registration.
There will be no change in rights and liabilities in respect of any debt or obligation or any contract.
CONTINUATION OF PENDING LEGAL PROCEEDINGS (SECTION 370):
All suits and other legal proceedings taken by or against the company, or any public officer or member thereof, which are pending at the time of the registration of a company in pursuance of this Part, may be continued in the same manner as if the registration had not taken place. Any execution shall not issue against the property or persons of any individual member of the company on any decree or order obtained in any such suit or proceeding; but, in the event of the property of the company being insufficient to satisfy the decree or order, an order may be obtained for winding up the company.
There will be no effect on any suit or other legal proceedings but any execution shall not be issued against person or property of any individual members. In event of the property of the company remain insufficient to satisfy the decree or order, there may be a winding up of the company.
EFFECT OF REGISTRATION UNDER THIS PART (SECTION 371):
Following provisions shall apply to companies registered under this Act:
- All provisions contained in any Act of Parliament or any other law for the time being in force, or other instrument constituting or regulating the company, including, in the case of a company registered as a company limited by guarantee, the resolution declaring the amount of the guarantee, shall be deemed to be conditions and regulations of the company, in the same manner and with the same incidents as if so much thereof as would, if the company had been formed under this Act, have been required to be inserted in the memorandum, were contained in a registered memorandum, and the residue thereof were contained in registered articles.
All legal provision regulating the company before registration under this Part, shall continue to be regulate as they have been inserted in the memorandum or in the articles.
- All the provisions of this Act shall apply to the company and the members, contributories and creditors thereof, in the same manner in all respects as if it had been formed under this Act, subject as follows:—
- Table F in Schedule I shall not apply unless and except in so far as it is adopted by special resolution;
- the provisions of this Act relating to the numbering of shares shall not apply to any company whose shares are not numbered.
- in the event of the company being wound up, every person shall be a contributory, in respect of the debts and liabilities of the company contracted before registration, who is liable to pay or contribute to the payment of any debt or liability of the company contracted before registration, or to pay or contribute to the payment of any sum for the adjustment of the rights of the members among themselves in respect of any such debt or liability, or to pay or contribute to the payment of the costs, charges and expenses of winding up the company, so far as relates to such debts or liabilities as aforesaid;
- in the event of the company being wound up, every contributory shall be liable to contribute to the assets of the company, in the course of the winding up, all sums due from him in respect of any such liability as aforesaid; and in the event of the death or insolvency of any contributory, the provisions of this Act with respect to the legal representatives of deceased contributories, or with respect to the assignees of insolvent contributories, as the case may be, shall apply.
- The provisions of this Act with respect to—
- the registration of an unlimited company as a limited company;
- the powers of an unlimited company on registration as a limited company, to increase the nominal amount of its share capital and to provide that a portion of its share capital shall not be capable of being called-up except in the event of winding up;
- the power of a limited company to determine that a portion of its share capital shall not be capable of being called-up except in the event of winding up,
shall apply, notwithstanding anything in any Act of Parliament or any other law for the time being in force, or other instrument constituting or regulating the company.
- Nothing in this section shall authorise the company to alter any such provisions contained in any instrument constituting or regulating the company as would, if the company had originally been formed under this Act, have been required to be contained in the memorandum and are not authorised to be altered by this Act.
- None of the provisions of this Act (apart from those of section 242) shall derogate from any power of altering its constitution or regulations which may be vested in the company, by virtue of any Act of Parliament or any other law for the time being in force, or other instrument constituting or regulating the company.
- In this section, the expression “instrument” includes deed of settlement, deed of partnership, or limited liability partnership.
POWER OF COURT TO STAY OR RESTRAIN PROCEEDINGS (SECTION 372):
Where the application to stay or restrain is by a creditor, the provisions of this Act with respect to staying and restraining suits and other legal proceedings against a company at any time after the presentation of a petition for winding up and before the making of a winding up order shall extend to suits and other legal proceedings against any contributory of the company.
SUIT STAYED ON WINDING UP ORDER (SECTION 273):
Where an order has been made for winding up, or a provisional liquidator has been appointed for, a company registered in pursuance of this Part, no suit or other legal proceeding shall be proceeded with or commenced against the company or any contributory of the company in respect of any debt of the company. The suit or other legal proceeding shall be proceeded with leave of the Tribunal and except on such terms as the Tribunal may impose.
OBLIGATION OF COMPANIES REGISTERING UNDER THIS PART (SECTION 374):
Every company which is seeking registration under this Part shall,—
(a) ensure that secured creditors of the company, prior to its registration under this Part, have either consented to or have given their no objection to company’s registration under this Part;
(b) publish in a newspaper, advertisement one in English and one in vernacular language in such form as may be prescribed giving notice about registration under this Part, seeking objections and address them suitably;
(c) file an affidavit, duly notarised, from all the members or partners to provide that in the event of registration under this Part, necessary documents or papers shall be submitted to the registering or other authority with which the company was earlier registered, for its dissolution as partnership firm, limited liability partnership, cooperative society, society or any other business entity, as the case may be.
(d) comply with such other conditions as may be prescribed.
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