Tag Archives: Incorporation

Now, Added SPICe Incorporation


The era of simple incorporation has already been over. We have SPICe since long which claimed to facilitate additional registrations at the option of the applicant. Now, This is over. The Government is now at the final stage of serving added SPICe. The menu name “SPICe+”

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Active Company Tagging Identities and Verification (ACTIVE)


According to old Indian saying – Daroga (Inspector) is the Supreme Sovereign. We, professionals, have a similar experience with Indian corporate law. Ministry of Corporate Affairs (MCA) notified a new rule 25A by way of the Company (Incorporation) Amendment Rules 2019 with effect from 25th February 2019. In this post, we will discuss Rule 25A and Form ACTIVE which technically is Form INC – 22A.

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Notification of Sections Relevant for NCLT


Yesterday late evening, I posted here about press release issued by Ministry of Corporate Affairs. Soon thereafter, two files uploaded on Official Gazette website with two notifications in each. In earlier post here today, we discussed establishment and jurisdiction of various NCLT benches.

In this post, we will have a bird’s eye view on Sections notified on 1st June 2016 related to NCLT.

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Triggering Unlimited Liability for Members


Recently introduced amendment bill to the Companies Act, 2013 propose to reintroduce unlimited liability for members in certain cases. Though, similar provision was there in earlier in the companies Act, 1956; I have no intention to go into history; but to examine this provision in light of justice and equity.

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Amended Form INC – 7 (W.E.F. 1 May 2015)


Form INC-7 is required to be filed pursuant to Section 7 (1) of the Companies Act, 2013 and pursuant to Rule 10, 12, 14 and 15 of Companies (Incorporation) Rules, 2014. New version of this form came into force from 1st May 2015 by the Companies (Incorporation) Amendment Rules 2015. This replaced earlier version of Form INC – 7 discussed earlier here.

Form INC-7 deals with incorporation of a new company (other than OPC). This form is accompanied by supporting documents such as details of Directors/subscribers, the Memorandum of Association (MoA) and Articles of Association (AoA) and evidence of payment of stamp duty. Once the Form is processed and found complete, a company is registered and CIN is allocated.

The Form INC – 7 is not required where Integrated Incorporation Form INC – 29 was opted by applicant.

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DECLARATION BY PROFESSIONALS


Section 7 of the Companies Act, 2013 discusses incorporation of a company including a One Person Company. We have discussed this Section earlier here. Clause (b) of Section (1) of Section 7 requires a declaration in the prescribed form by an advocate, a chartered accountant, cost accountant or company secretary in practice, who is engaged in the formation of the company, and by a person named in the articles as a director, manager or secretary of the company, that all the requirements of this Act and the rules made thereunder in respect of registration and matters precedent or incidental thereto have been complied with.

Rule 14 of the Companies (Incorporation) Rules 2014 prescribe Form INC – 8 for this declaration.

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SIGNING OF MEMORANDUM AND ARTICLES


Section 7 of the Companies Act, 2013 discusses incorporation of a company including a One Person Company. We have discussed this Section earlier here. Clause (a) of Section (1) of Section 7 requires submitting the memorandum and articles of the company duly signed by all the subscribers to the memorandum in such manner as may be prescribed.

Rule 13 of the Companies (Incorporation) Rules 2014 prescribes this manner.

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PARTICULARS AND SPECIMEN SIGNATURE OF SUBSCRIBERS


Section 7 of the Companies Act, 2013 discusses incorporation of a company including a One Person Company. We have discussed this Section earlier here. Clause (e) of Section (1) of Section 7 require the particulars of name, including surname or family name, residential address, nationality and such other particulars of every subscriber to the memorandum along with proof of identity, as may be prescribed, and in the case of a subscriber being a body corporate, such particulars as may be prescribed.

Rule 16 of the Companies (Incorporation) Rules 2014 lists the particulars to be filed with the Registrar by the company under Section 7(1)(e).

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AFFIDAVIT BY SUBSCRIBER AND FIRST DIRECTORS


Section 7 of the Companies Act, 2013 discusses incorporation of a company including a One Person Company. We have discussed this Section earlier here. Clause (c) of Section (1) of Section 7 require an affidavit form an affidavit from each of the subscribers to the Memorandum and from persons named as the first directors.
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APPLICATION FOR INCORPORATION OF ONE PERSON COMPANY


As we discussed earlier here, Section 7 of the Companies Act, 2013 deals with incorporation of a company other than a charitable or non – profit company. In this post we will discuss incorporation of one person company.

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NAME AND CLASS OF THE COMPANY


UPDATE: on 30th August 2013: Companies Bill 2012 became the Companies Act, 2013 (Act 18 of 2013).

After reading my posts on Formation of a Company and Alteration of Memorandum and Articles, few readers suggested that I should cover provisions related to names in one place. I will discuss these provisions here along with provisions related to conversion of company from one class to another.

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REGISTERED OFFICE


UPDATE: on 30th August 2013: Companies Bill 2012 became the Companies Act, 2013 (Act 18 of 2013).

In last Blog Post, I discussed formation and incorporation of company and its effects. What next? Business, but comply certain legal provisions. Here, we will discuss provision related to present companies Bill, 2012 Act, 2013.

COMMENCEMENT OF BUSINESS (SECTION 11):

[Update: Section 11 is no longer relevant after the Companies (Amendment) Act, 2015]

Before starting any business or borrow any money, every company having share capital, shall have to comply two requirements.

Firstly, A Director of company shall file a declaration with Registrar of companies, that:

(i)           Every subscriber to the memorandum has paid the value of shares agreed to be taken by him,

(ii)          The paid up capital of company is not less than one lakh in case of private company or five lakh in case of public company on date of declaration.

Any commencement of business or borrowing before complying above requirement, the company shall liable five thousand rupees (one time) and every officer who is in default shall be punishable with fine up to rupees one thousand for every day during which the default continues.

If no declaration has filed within one hundred and eighty day of the date of incorporation, the registrar may initiate action for removal of name of company from register of companies.

This simply means company should receive from their subscribers all the money value of shares subscribed by them before commencing the business. The company should take that money value into its book of accounts.  After receiving all this money value from subscribers and other shareholders, the paid up capital of the company should be in conformity of minimum paid up share capital requirement. At this point, please, recall Section 10 (2), all monies payable by any member to the company under the memorandum or articles shall be a debt due from him to the company. That Section 10 (2) may not help company to commence its business but act against subscriber only. Effectively, all subscribers must pay their subscription money in total within one hundred and eighty days from the date of incorporation.

REGISTERED OFFICE OF COMPANY (SECTION 12):

The company shall have on and from fifteenth day of its incorporation and all time thereafter a registered office for all communication purpose. When we read all other provision under Companied Bill, 2012 the registered office is office of company is a hub connecting the company and outside world.

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INCORPORATION OF COMPANY


UPDATE: on 30th August 2013: Companies Bill 2012 became the Companies Act, 2013 (Act 18 of 2013).

Section 7, 8 of Companies Bill 2012 Act, 2013

In my last blog post “Formation of Company”, I discussed the formation of company and its foundation documents; Memorandum, Articles and proposed/changed Name.  In This post we will discuss, Incorporation of Company including incorporation of non- profit company.

INCORPORATION OF COMPANY (SECTION 7):

All document related to incorporation shall be filed be filed before the registrar, in whose jurisdiction registered office of a company is proposed to be situated. A Registrar may have jurisdiction over several states or only a part of a state. Following documents are to be submitted:

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FORMATION OF A COMPANY


UPDATE: on 30th August 2013: Companies Bill 2012 became the Companies Act, 2013 (Act 18 of 2013).

Section 3, 4 and 5 of the Companies Bill, 2012 Act 2013

In my last post, I discussed definition of companies and classes.

FORMATION OF COMPANY (SECTION 3):

A company may be formed for any lawful purpose by:

(a)    Seven or more persons as public company;

(b)   Two or more persons as private company;

(c)    One person as One Person Company

By subscribing names to a memorandum and complying other requirements.

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