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CHAPTER II
:
INCORPORATION OF COMPANY AND
MATTERS INCIDENTAL THERETO
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Section 3.
Formation of Company
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(1) A company may be formed for any
lawful purpose by—
(a) seven or more persons, where the
company to be formed is to be a public
company;
(b) two or more persons, where the
company to be formed is to be a private
company; or
(c) one person, where the company to be
formed is to be
One Person Company
that is to say, a private company,
by subscribing their names or his name
to a memorandum and complying with the
requirements of this Act in respect of
registration:
Provided
that the memorandum of One Person
Company shall indicate the name of the
other person, with his prior written
consent in the
prescribed form
, who shall, in the event of the
subscriber's death or his incapacity to
contract become the member of the
company and the written consent of such
person shall also be filed with the
Registrar at the time of incorporation
of the One Person Company along with
its memorandum and articles:
Provided further
that such other person may withdraw his
consent in such manner
as may be prescribed:
Provided also
that the member of One Person Company
may at any time change the name of such
other person by giving notice in such
manner
as may be prescribed:
Provided also
that it shall be the duty of the member
of One Person Company to intimate the
company the change, if any, in the name
of the other person nominated by him by
indicating in the memorandum or
otherwise within such time and in such
manner
as may be prescribed,
and the company shall intimate the
Registrar any such change within such
time and in such manner
as may be prescribed:
Provided also
that any such change in the name of the
person shall not be deemed to be an
alteration of the memorandum.
(2) A company formed under sub-section
(1) may be either—
(a) a company limited by shares; or
(b) a company limited by guarantee; or
(c) an unlimited company. ]
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Section 3A. Members severally liable in certain
cases.
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If at any time the number of members of a company is
reduced, in the case of a public company, below seven, in
the case of a private company, below two, and the company
carries on business for more than six months while the
number of members is so reduced, every person who is a
member of the company during the time that it so carries on
business after those six months and is cognisant of the
fact that it is carrying on business with less than seven
members or two members, as the case may be, shall be
severally liable for the payment of the whole debts of the
company contracted during that time, and may be severally
sued therefor.
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Section 4. Memorandum
(1) The memorandum of a company shall state—
(a) the name of the company with the last word "Limited"
1
[in the case of a public limited company, or the last words "Private
Limited" in the case of a private limited company]:
4
[Provided that nothing in this clause shall apply to a company registered
under
section 8
;]
(b) the State in which the registered office of the company is to be
situated;
3&5
[(c) the objects for which the company is proposed to be incorporated and
any matter considered necessary in furtherance thereof;]
(d) the liability of members of the company, whether limited or unlimited,
and also state,—
(i) in the case of a company limited by shares, that liability of
its members is limited to the amount unpaid, if any, on the shares held by
them; and
(ii) in the case of a company limited by guarantee, the amount up
to which each member undertakes to contribute—
(A) 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, as the case may be; and
(B) to the costs, charges and expenses of winding-up and for
adjustment of the rights of the contributories among themselves;
(e) in the case of a company having a share capital,—
(i) the amount of share capital with which the company is to be
registered and the division thereof into shares of a fixed amount and the
number of shares which the subscribers to the memorandum agree to subscribe
which shall not be less than one share; and
(ii) the number of shares each subscriber to the memorandum
intends to take, indicated opposite his name;
(f) in the case of One Person Company, the name of the person who
in the event of death of the subscriber shall become the member of the
company.
(2) The name stated in the memorandum shall not—
(a)
be identical with or resemble too nearly to the name of an existing company
registered under this Act or any previous company law; or
(b)
be such that its use by the company—
(i) will constitute an offence under any law for the time being in
force; or
(ii) is undesirable in the opinion of the
Central Government
.
(3) Without prejudice to the provisions of sub-section (2), a company shall
not be registered with a name which contains—
(a) any word or expression which is likely to give the impression
that the company is in any way connected with, or having the patronage of,
the Central Government, any State Government, or any local authority,
corporation or body constituted by the Central Government or any State
Government under any law for the time being in force; or
(b) such word or expression,
as may be prescribed,
unless the previous approval of the Central Government has been obtained
for the use of any such word or expression.
(4) A person may make an application, in such form and
manner
and accompanied by such fee,
as may be prescribed
, to the Registrar for the reservation of a name set out in the application
as—
(a) the name of the proposed company; or
(b) the name to which the company proposes to change its name.
(5) (i) Upon receipt of an application under sub-section (4), the Registrar
may, on the basis of information and documents furnished along with the
application, reserve the name for a period of twenty days from the date of
approval or such other period as may be prescribed:
Provided that in case of an application for reservation of name or for
change of its name by an existing company, the Registrar may reserve the
name for a period of sixty days from the date of approval.
(ii) Where after reservation of name under clause (i), it
is found that name was applied by furnishing wrong or incorrect
information, then,—
(a) if the company has not been incorporated, the reserved name
shall be cancelled and the person making application under sub-section (4)
shall be liable to a penalty which may extend to one lakh rupees;
(b) if the company has been incorporated, the Registrar may, after
giving the company an opportunity of being heard—
(i) either direct the company to change its name within a period
of three months, after passing an ordinary resolution;
(ii) take action for striking off the name of the company from the
register of companies; or
(iii) make a petition for winding up of the company.
(6) The memorandum of a company shall be in respective forms specified in
Tables A, B, C, D and E in
Schedule I
as may be applicable to such company.
(7) Any provision in the memorandum or articles, in the case of a company
limited by guarantee and not having a share capital, purporting to give any
person a right to participate in the divisible profits of the company
otherwise than as a member, shall be void.
Exceptions/ Modifications/ Adaptations
1. In case of Government company, in Section 4, in sub-section (1), in
clause (a), the words “in the case of a public limited company, or the last
words "Private Limited" in the case of a private limited company” shall be
omitted. -
Notification dated 5th june, 2015.
2. In case of
Specified IFSC Public Company
- Clause (a) of sub - section (1) of section 4 after the proviso, the
following proviso shall be inserted, namely:-
“Provided further that a Specified IFSC public company shall have the
suffix “International Financial Service Company” or “IFSC” as part of its
name.” -
Notification Date 4th January, 2017
.
3. In case of
Specified IFSC Public Company
- Clause (c) of subsection (1) of section 4 the following proviso shall be
inserted, namely:-
“Provided that a Specified IFSC public company shall state its objects to
do financial services activities, as permitted under the Special Economic
Zones Act, 2005 (28 of 2005) read with the Special Economic Zones Rules,
2006 and any matter considered necessary in furtherance thereof, in
accordance with license to operate, from International Financial Services
Centre located in an approved multi services Special Economic Zone, granted
by the Reserve Bank of India or the Securities and Exchange Board of India
or the Insurance Regulatory and Development Authority of India.” -
Notification Date 4th January, 2017
.
4. In case of
Specified IFSC Private Company
- In clause (a) of sub-section (1) of Section 4, after the proviso, the
following proviso shall be inserted, namely:-
“Provided further that a
Specified IFSC private company
shall have the suffix “International Financial Service Company” or “IFSC”
as part of its name.”.
Notification Dated 4th January 2017
5. In case of
Specified IFSC Private Company
- In clause (c) of sub-section (1) of section 4, the following proviso
shall be inserted, namely:-
“Provided that a
Specified IFSC private company
shall state its objects to do financial services activities, as permitted
under the Special Economic Zones Act, 2005 read with the Special Economic
Zones Rules, 2006 and any matter considered necessary in furtherance
thereof, in accordance with license to operate, from International
Financial Services Centre located in an approved multi services Special
Economic Zone, granted by the Reserve Bank of India or the Securities and
Exchange Board of India or the Insurance Regulatory and Development
Authority of India.”. -
Notification Dated 4th January 2017
Notes:
Clause (1) of Sub-section (5) has been notified on 23rd January 2018
and is effective from 26th January 2018
.
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(1) The articles of a company shall contain the regulations
for management of the company.
(2) The articles shall also contain such matters,
as may be prescribed
:
Provided
that nothing prescribed in this sub-section shall be deemed
to prevent a company from including such additional matters
in its articles as may be considered necessary for its
management.
(3) The articles may contain provisions for entrenchment to
the effect that specified provisions of the articles may be
altered only if conditions or procedures as that are more
restrictive than those applicable in the case of a special
resolution, are met or complied with.
(4) The provisions for entrenchment referred to in
sub-section (3) shall only be made either on formation of a
company, or by an amendment in the articles agreed to by
all the members of the company in the case of a private
company and by a special resolution in the case of a public
company.
(5) Where the articles 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
.
(6) The articles of a company shall be in respective forms
specified in Tables F, G, H, I and J in
Schedule I
as may be applicable to such company.
(7) A company may adopt all or any of the regulations
contained in the model articles applicable to such company.
(8) In case of any company, which is registered after the
commencement of this Act, in so far as the registered
articles of such company do not exclude or modify the
regulations contained in the model articles applicable to
such company, those regulations shall, so far as
applicable, be the regulations of that company in the same
manner and to the extent as if they were contained in the
duly registered articles of the company.
(9) Nothing in this section shall apply to the articles of
a company registered under any previous company law unless
amended under this Act.
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Section 6. Act to Override
Memorandum, Articles, etc.
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Save as otherwise expressly provided in
this Act—
(a) the provisions of this Act
shall have effect notwithstanding anything
to the contrary contained in the memorandum
or articles of a company, or in any
agreement executed by it, or in any
resolution passed by the company in general
meeting or by its Board of Directors,
whether the same be registered, executed or
passed, as the case may be, before or after
the commencement of this Act; and
(b) any provision contained in the
memorandum, articles, agreement or
resolution shall, to the extent to which it
is repugnant to the provisions of this Act,
become or be void, as the case may be.
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Section 7.
Incorporation of Company
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(1) There shall be filed with the
Registrar within whose jurisdiction the
registered office of a company is
proposed to be situated, the following
documents and information
for registration, namely:—
(a) the memorandum and
articles of the company duly signed by
all the subscribers to the memorandum
in such manner
as may be prescribed
;
(b)
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;
(c) 1
[a declaration]
each of the subscribers to the
memorandum and from persons named as
the first directors, if any, in the
articles that he is not convicted of
any offence in connection with the
promotion, formation or management of
any company, or that he has not been
found guilty of any fraud or
misfeasance or of any breach of duty to
any company under this Act or any
previous company law during the
preceding five years and that all the
documents filed with the Registrar for
registration of the company contain
information that is correct and
complete and true to the best of his
knowledge and belief;
(d) the address for
correspondence till its registered
office is established;
(e) 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
;
(f) the particulars of the
persons mentioned in the articles as
the first directors of the company,
their names, including surnames or
family names, the Director
Identification Number, residential
address, nationality and such other
particulars including proof of identity
as may be prescribed
; and
(g) the particulars of the
interests of the persons mentioned in
the articles as the first directors of
the company in other firms or bodies
corporate along with their consent to
act as directors of the company in such
form and manner
as may be prescribed
.
(2) The Registrar on the basis of
documents and information filed under
sub-section (1) shall register all the
documents and information referred to
in that sub-section in the register and
issue a certificate of incorporation in
the
prescribed form
to the effect that the proposed company
is incorporated under this Act.
(3) On and from the date mentioned in
the certificate of incorporation issued
under sub-section (2), the Registrar
shall allot to the company a corporate
identity number, which shall be a
distinct identity for the company and
which shall also be included in the
certificate.
(4) The company shall maintain and
preserve at its registered office
copies of all documents and information
as originally filed under sub-section
(1) till its dissolution under this
Act.
(5) If any person furnishes any false
or incorrect particulars of any
information or suppresses any material
information, of which he is aware in
any of the documents filed with the
Registrar in relation to the
registration of a company, he shall be
liable for action under
section 447
.
(6) Without prejudice to the provisions
of sub-section (5) where, at any time
after the incorporation of a company,
it is proved that the company has been
got incorporated by furnishing any
false or incorrect information or
representation or by suppressing any
material fact or information in any of
the documents or declaration filed or
made for incorporating such company, or
by any fraudulent action, the
promoters, the persons named as the
first directors of the company and the
persons making declaration under clause
(b) of sub-section (1) shall
each be liable for action under
section 447
.
*
(7) Without prejudice to the provisions
of sub-section (6), where a company has
been got incorporated by furnishing any
false or incorrect information or
representation or by suppressing any
material fact or information in any of
the documents or declaration filed or
made for incorporating such company or
by any fraudulent action, the Tribunal
may,
on an application
made to it, on being satisfied that the
situation so warrants,—
(a) pass such orders, as it
may think fit, for regulation of the
management of the company including
changes, if any, in its memorandum and
articles, in public interest or in the
interest of the company and its members
and creditors; or
(b) direct that liability of
the members shall be unlimited; or
(c) direct removal of the name
of the company from the register of
companies; or
(d) pass an order for the
winding up of the company; or
(e) pass such other orders as
it may deem fit:
Provided
that before making any order under this
sub-section,—
(i) the company shall be given
a reasonable opportunity of being heard
in the matter; and
(ii) the Tribunal shall take
into consideration the transactions
entered into by the company, including
the obligations, if any, contracted or
payment of any liability.
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Section 8.
Formation of
Companies with
Charitable Objects,
etc.
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(1) Where it is proved
to the satisfaction of
the
Central Government
that a person or an
association of persons
proposed to be
registered under this
Act as a limited
company—
(a) has in its
objects the promotion
of commerce, art,
science, sports,
education, research,
social welfare,
religion, charity,
protection of
environment or any such
other object;
(b) intends to
apply its profits, if
any, or other income in
promoting its objects;
and
(c) intends to
prohibit the payment of
any dividend to its
members,
the Central Government
may, by licence issued
in such manner
as may be
prescribed
, and on such
conditions as it deems
fit, allow that person
or association of
persons to be
registered as a limited
company under this
section without the
addition to its name of
the word "Limited", or
as the case may be, the
words "Private Limited"
, and thereupon the
Registrar shall, on
application, in the
prescribed form
, register such person
or association of
persons as a company
under this section.
(2) The company
registered under this
section shall enjoy all
the privileges and be
subject to all the
obligations of limited
companies.
(3) A firm may be a
member of the company
registered under this
section.
(4) (i) A
company registered
under this section
shall not alter the
provisions of its
memorandum or articles
except with the
previous approval of
the #
Central Government
.
(ii) A company
registered under this
section may convert
itself into company of
any other kind only
after complying with
such conditions
as may be
prescribed
.
(5) Where it is proved
to the satisfaction of
the
Central Government
that a limited company
registered under this
Act or under any
previous company law
has been formed with
any of the objects
specified in clause ( a) of
sub-section (1) and
with the restrictions
and prohibitions as
mentioned respectively
in clauses (b)
and (c) of
that sub-section, it
may, by licence, allow
the company to be
registered under this
section subject to such
conditions as the
Central Government
deems fit and to change
its name by omitting
the word "Limited", or
as the case may be, the
words "Private Limited"
from its name and
thereupon the Registrar
shall, on application,
in the
prescribed form
, register such company
under this section and
all the provisions of
this section shall
apply to that company.
(6) The #Central
Government may, by
order, revoke the
licence granted to a
company registered
under this section if
the company contravenes
any of the requirements
of this section or any
of the conditions
subject to which a
licence is issued or
the affairs of the
company are conducted
fraudulently or in a
manner violative of the
objects of the company
or prejudicial to
public interest, and
without prejudice to
any other action
against the company
under this Act, direct
the company to convert
its status and change
its name to add the
word "Limited" or the
words "Private
Limited", as the case
may be, to its name and
thereupon the Registrar
shall, without
prejudice to any action
that may be taken under
sub-section (7), on
application,
in the prescribed
form
, register the company
accordingly:
Provided
that no such order
shall be made unless
the company is given a
reasonable opportunity
of being heard:
Provided further
that a copy of every
such order shall be
given to the Registrar.
(7) Where a licence is
revoked under
sub-section (6), the
Central Government may,
by order, if it is
satisfied that it is
essential in the public
interest, direct that
the company be wound up
under this Act or
amalgamated with
another company
registered under this
section:
Provided
that no such order
shall be made unless
the company is given a
reasonable opportunity
of being heard.
(8) Where a licence is
revoked under
sub-section (6) and
where the Central
Government is satisfied
that it is essential in
the public interest
that the company
registered under this
section should be
amalgamated with
another company
registered under this
section and having
similar objects, then,
notwithstanding
anything to the
contrary contained in
this Act, the Central
Government may, by
order, provide for such
amalgamation to form a
single company with
such constitution,
properties, powers,
rights, interest,
authorities and
privileges and with
such liabilities,
duties and obligations
as may be specified in
the order.
(9) If on the winding
up or dissolution of a
company registered
under this section,
there remains, after
the satisfaction of its
debts and liabilities,
any asset, they may be
transferred to another
company registered
under this section and
having similar objects,
subject to such
conditions as the
Tribunal may impose, or
may be sold and
proceeds thereof
credited to 1
["Insolvency and
Bankruptcy Fund formed
under
section 224
of the Insolvency and
Bankruptcy Code, 2016"]
(10) A company
registered under this
section shall
amalgamate only with
another company
registered under this
section and having
similar objects.
(11) If a company makes
any default in
complying with any of
the requirements laid
down in this section,
the company shall,
without prejudice to
any other action under
the provisions of this
section, be punishable
with fine which shall
not be less than ten
lakh rupees but which
may extend to one crore
rupees and the
directors and every
officer of the company
who is in default shall
be punishable with
imprisonment for a term
which may extend to
three years or with
fine which shall not be
less than twenty-five
thousand rupees but
which may extend to
twenty-five lakh
rupees, or with both:
Provided
that when it is proved
that the affairs of the
company were conducted
fraudulently, every
officer in default
shall be liable for
action under
section 447
.
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Section
9. Effect of Registration
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From the date of incorporation mentioned in the certificate
of incorporation, such subscribers to the memorandum and
all other persons, as may, from time to time, become
members of the company, shall be a body corporate by the
name contained in the memorandum, capable of exercising all
the functions of an incorporated company under this Act and
having perpetual succession
1
[
and a common seal
] with power to acquire, hold and dispose of property, both
movable and immovable, tangible and intangible, to contract
and to sue and be sued, by the said name.
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Section 10. Effect of
Memorandum and Articles
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(1)Subject to the provisions of this
Act, the memorandum and articles shall,
when registered, bind the company and
the members thereof to the same extent
as if they respectively had been signed
by the company and by each member, and
contained covenants on its and his part
to observe all the provisions of the
memorandum and of the articles.
(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.
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Section 10A.Commencement of business etc.
(1) A company incorporated after the commencement of the
Companies (Amendment) Ordinance, 2[2019] and
having a share capital shall not commence any business or
exercise any borrowing powers unless—
(a) a declaration is filed by a director within a period of
one hundred and eighty days of the date of incorporation of
the company in such form and verified in such manner as may
be prescribed, 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
(b) The company has filed with the Registrar a verification
of its registered office as provided in sub-section (2) of
section 12.
(2) If any default is made in complying with the
requirements of this section, the company shall be liable
to a penalty of fifty thousand rupees and every officer who
is in default shall be liable to a penalty of one thousand
rupees for each day during which such default continues but
not exceeding an amount of one lakh rupees.
(3) Where no declaration has been filed with the Registrar
under clause (a) of sub-section (1) within a period of one
hundred and eighty days of the date of incorporation of the
company and the Registrar has reasonable cause to believe
that the company is not carrying on any business or
operations, he may, without prejudice to the provisions of
sub-section (2), initiate action for the removal of the
name of the company from the register of companies under
Chapter XVIII.]]
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Section 12. Registered Office
of Company
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(1) A company shall, 10
[within thirty day of its
incorporation] and at all times
thereafter, have a registered office
capable of receiving and acknowledging
all communications and notices as may
be addressed to it.]
(2) The company shall furnish to the
Registrar verification of its
registered office within a period of 3&7[thirty days] of its
incorporation in such manner
as may be prescribed
.
(3) Every company shall—
(a) paint or affix its name,
and the address of its registered
office, and keep the same painted or
affixed, on the outside of every office
or place in which its business is
carried on, in a conspicuous position,
in legible letters, and if the
characters employed therefor are not
those of the language or of one of the
languages in general use in that
locality, also in the characters of
that language or of one of those
languages;
1
[(b) have its name engraved in
legible characters on its seal;if any:]
(c) get its name, address of
its registered office and the Corporate
Identity Number along with telephone
number, fax number, if any, 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
(d) have its name printed on hundies, promissory notes,
bills of exchange and such other
documents
as may be prescribed
:
Provided
that where a company has changed its
name or names during the last two
years, it shall paint or affix or
print, as the case may be, along with
its name, the former name or names so
changed during the last two years as
required under clauses (a) and
(c):
Provided further
that the words "One Person Company"
shall be mentioned in brackets below
the name of such company, wherever its
name is printed, affixed or engraved.
(4) Notice of every change of the
situation of the registered office,
verified
in the manner prescribed
, after the date of incorporation of
the company, shall be given to the
Registrar 11[within thirty
days] of the change, who shall record
the same.
5&9
[(5) Except on the authority of a
special resolution passed by a company,
the registered office of the company
shall not be changed,—
(a) in the case of an existing
company, outside the local limits of
any city, town or village where such
office is situated at the commencement
of this Act or where it may be situated
later by virtue of a special resolution
passed by the company; and
(b) in the case of any other
company, outside the local limits of
any city, town or village where such
office is first situated or where it
may be situated later by virtue of a
special resolution passed by the
company:
Provided
that no company shall change the place
of its registered office from the
jurisdiction of one Registrar to the
jurisdiction of another Registrar
within the same State unless such
change is confirmed by the Regional
Director on an application made in this
behalf by the company
in the prescribed manner
.]
(6) The confirmation referred to in
sub-section (5) shall be communicated
within a period of thirty days from the
date of receipt of application by the
Regional Director to the company and
the company shall file the confirmation
with the Registrar within a period of
sixty days of the date of confirmation
who shall register the same and certify
the registration within a period of
thirty days from the date of filing of
such confirmation.
(7) The certificate referred to in
sub-section (6) shall be conclusive
evidence that all the requirements of
this Act with respect to change of
registered office in pursuance of
sub-section (5) have been complied with
and the change shall take effect from
the date of the certificate.
(8) If any default is made in complying
with the requirements of this section,
the company and every officer who is in
default shall be liable to a penalty of
one thousand rupees for every day
during which the default continues but
not exceeding one lakh rupees.
(9) If the Registrar has reasonable
cause to believe that the company is
not carrying on any business or
operations, he may cause a physical
verification of the registered office
of the company in such manner as may be
prescribed and if any default is found
to be made in complying with the
requirements of sub-section (1), he may
without prejudice to the provisions of
sub-section (8), initiate action for
the removal of the name of the company
from the register of companies under
Chapter XVIII.]]
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Section 13.Alteration of
Memorandum
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(1) Save as provided in
section 61,
a company may, by a special resolution
and after complying with the procedure
specified in this section, alter the
provisions of its memorandum.
(2) Any change in the name of a company
shall be subject to the provisions of
sub-sections (2) and (3) of
section 4
and shall not have effect except with
the approval of the
Central Government in writing
:
Provided
that no such approval shall be
necessary where the only change in the
name of the company is the deletion
therefrom, or addition thereto, of the
word "Private", consequent on the
conversion of any one class of
companies to another class in
accordance with the provisions of this
Act.
(3) When any change in the name of a
company is made under sub-section (2),
the Registrar shall enter the new name
in the register of companies in place
of the old name and issue a fresh
certificate of incorporation with the
new name and the change in the name
shall be complete and effective only on
the issue of such a certificate.
(4) The alteration of the memorandum
relating to the place of the registered
office from one State to another shall
not have any effect unless it is
approved by the #
Central Government
on an application in such form and
manner
as may be prescribed
.
(5) The #
Central Government
shall dispose of the application under
sub-section (4) within a period of
sixty days and before passing its order
may satisfy itself that the alteration
has the consent of the creditors,
debenture-holders and other persons
concerned with the company or that the
sufficient provision has been made by
the company either for the due
discharge of all its debts and
obligations or that adequate security
has been provided for such discharge.
(6) Save as provided in
section 64,
a company shall, in relation to any
alteration of its memorandum, file with
the Registrar—
(a) the special resolution
passed by the company under sub-section
(1);
(b) the approval of the
Central Government under sub-section
(2), if the alteration involves any
change in the name of the company.
(7) Where an alteration of the
memorandum results in the transfer of
the registered office of a company from
one State to another, a certified copy
of the order of the Central Government
approving the alteration shall be filed
by the company with the Registrar of
each of the States within such time and
in such manner
as may be prescribed
, who shall register the same, and the
Registrar of the State where the
registered office is being shifted to,
shall issue a fresh certificate of
incorporation indicating the
alteration.
(8) A company, which has raised money
from public through prospectus and
still has any unutilised amount out of
the money so raised, shall not change
its objects for which it raised the
money through prospectus unless a
special resolution is passed by the
company and—
(i) the details,
as may be prescribed
, in respect of such resolution shall
also be published in the newspapers
(one in English and one in vernacular
language) which is in circulation at
the place where the registered office
of the company is situated and shall
also be placed on the website of the
company, if any, indicating therein the
justification for such change;
(ii) the dissenting
shareholders shall be given an
opportunity to exit by the promoters
and shareholders having control in
accordance with regulations to be
specified by the Securities and
Exchange Board.
(9) The Registrar shall register any
alteration of the memorandum with
respect to the objects of the company
and certify the registration within a
period of thirty days from the date of
filing of the special resolution in
accordance with clause (a) of
sub-section (6) of this section.
(10) No alteration made under this
section shall have any effect until it
has been registered in accordance with
the provisions of this section.
(11) Any alteration of the memorandum,
in the case of a company limited by
guarantee and not having a share
capital, purporting to give any person
a right to participate in the divisible
profits of the company otherwise than
as a member, shall be void.
Note:
#
MCA Notification Dated 19th
December 2016, conferring powers by
Section 458 of the Companies Act,
2013
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Section 14. Alteration of
Articles
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(1) Subject to the provisions of this
Act and the conditions contained in its
memorandum, if any, a company may, by a
special resolution, alter its articles
including alterations having the effect
of conversion of—
(a) a private company into a
public company; or
(b) a public company into a
private company:
Provided
that where a company being a private
company alters its articles in such a
manner that they no longer include the
restrictions and limitations which are
required to be included in the articles
of a private company under this Act,
the company shall, as from the date of
such alteration, cease to be a private
company:
4[1[Provided further that any
alteration having the effect of
conversion of a public company into a
private company shall not be valid
unless it is approved by an order of
the Central Government on an
application made in such form and
manner as may be prescribed:
Provided also that any application
pending before the Tribunal, as on the
date of commencement of the Companies
(Amendment) Ordinance, 3
[2019], shall be disposed of by the
Tribunal in accordance with the
provisions applicable to it before such
commencement.]]
*
(2) Every alteration of the articles
under this section and a copy of the
order of the 2[Central Government]
approving the alteration as per
sub-section (1) shall be filed with the
Registrar, together with a printed copy
of the altered articles, within a
period of fifteen days in such manner
as may be prescribed
, who shall register the same.
(3) Any alteration of the articles
registered under sub-section (2) shall,
subject to the provisions of this Act,
be valid as if it were originally in
the articles.
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Section 15. Alteration of
Memorandum or Articles to be
Noted in Every Copy
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(1) Every alteration made in the
memorandum or articles of a company
shall be noted in every copy of the
memorandum or articles, as the case may
be.
(2) If a company makes any default in
complying with the provisions of
sub-section (1), the company and every
officer who is in default shall be
liable to a penalty of one thousand
rupees for every copy of the memorandum
or articles issued without such
alteration.
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Section 16.
Rectification of Name of
Company
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(1) If, through inadvertence or
otherwise, a company on its first
registration or on its registration by
a new name, is registered by a name
which,—
(a) in the opinion of the #
Central Government
, is identical with or too nearly
resembles the name by which a company
in existence had been previously
registered, whether under this Act or
any previous company law, it may direct
the company to change its name and the
company shall change its name or new
name, as the case may be, within a
period of three months from the issue
of such direction, after adopting an
ordinary resolution for the purpose;
(b) on an application by a
registered proprietor of a trade mark
that the name is identical with or too
nearly resembles to a registered trade
mark of such proprietor under the Trade
Marks Act, 1999, made to the #
Central Government
within three years of incorporation or
registration or change of name of the
company, whether under this Act or any
previous company law, in the opinion of
the #Central Government, is identical
with or too nearly resembles to an
existing trade mark, it may direct the
company to change its name and the
company shall change its name or new
name, as the case may be, within a
period of six months from the issue of
such direction, after adopting an
ordinary resolution for the purpose.
(2) Where a company changes its name or
obtains a new name under sub-section
(1), it shall within a period of
fifteen days from the date of such
change, give notice of the change to
the Registrar along with the order of
the #
Central Government
, who shall carry out necessary changes
in the certificate of incorporation and
the memorandum.
(3) If a company makes default in
complying with any direction given
under sub-section (1), the company
shall be punishable with fine of one
thousand rupees for every day during
which the default continues and every
officer who is in default shall be
punishable with fine which shall not be
less than five thousand rupees but
which may extend to one lakh rupees.
Note:
#
MCA Notification Dated 19th
December 2016, conferring powers by
Section 458 of the Companies Act,
2013.
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Section 17.Copies of
Memorandum, Articles, etc., to
be Given to Members
|
(1) A company shall, on being so
requested by a member, send to him
within seven days
of the request and subject to the
payment of such fees
as may be prescribed
, a copy of each of the following
documents, namely:—
(a) the memorandum;
(b) the articles; and
(c) every agreement and every
resolution referred to in sub-section
(1) of
section 117,
if and in so far as they have not been
embodied in the memorandum or articles.
(2) If a company makes any default in
complying with the provisions of this
section, the company and every officer
of the company who is in default shall
be liable for each default, to a
penalty of one thousand rupees for each
day during which such default continues
or one lakh rupees, whichever is less.
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Section 18.
Conversion of Companies Already
Registered
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(1) A company of any class registered
under this Act may convert itself as a
company of other class under this Act
by alteration of memorandum and
articles of the company in accordance
with the provisions of this Chapter.
(2) Where the conversion is required to
be done under this section, the
Registrar shall on an application made
by the company, after satisfying
himself that the provisions of this
Chapter applicable for registration of
companies have been complied with,
close the former registration of the
company and after registering the
documents referred to in sub-section
(1), issue a certificate of
incorporation in the same manner as its
first registration.
(3) The registration of a company under
this section shall not affect any
debts, liabilities, obligations or
contracts incurred or entered into, by
or on behalf of the company before
conversion and such debts, liabilities,
obligations and contracts may be
enforced in the manner as if such
registration had not been done.
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Section 19. Subsidiary Company
not to Hold Shares in its
Holding Company
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(1) No company shall, either by itself
or through its nominees, hold any
shares in its holding company and 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:
Provided
that nothing in this sub-section shall
apply to a case—
(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 a subsidiary company of the
holding company:
Provided further
that the subsidiary company referred to
in the preceding proviso shall have a
right to vote at a meeting of the
holding company only in respect of the
shares held by it as a legal
representative or as a trustee, as
referred to in clause (a) or
clause (b) of the said
proviso.
(2) The reference in this section to
the shares of a holding company which
is a company limited by guarantee or an
unlimited company, not having a share
capital, shall be construed as a
reference to the interest of its
members, whatever be the form of
interest.
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Section 20.Service of Documents
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(1) A document may be served on a
company or an officer thereof by
sending it to the company or the
officer at the registered office of the
company by registered post or by speed
post or by courier service or by
leaving it at its registered office or
by means of such electronic or other
mode
as may be prescribed
:
Provided
that where securities are held with a
depository, the records of the
beneficial ownership may be served by
such depository on the company by means
of electronic or other mode.
1
(2) Save as provided in this Act or the
rules made thereunder for filing of
documents with the Registrar in
electronic mode, a document may be
served on Registrar or any member by
sending it to him by post or by
registered post or by speed post or by
courier or by delivering at his office
or address, or by such electronic or
other mode
as may be prescribed
:
Provided
that 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.
Explanation
.—For the purposes of this section, the
term "courier" means a person or agency
which delivers the document and
provides proof of its delivery.
Exception/ Modification/ Adaptation
1.In case of Nidhi Company -
Sub-section (2) of Section 20 shall
apply subject to the modification that
in the case of a Nidhi, the document
may be served only on members who hold
shares of more than one thousand rupees
in face value or more than one per
cent, of the total paid-up share
capital of the Nidhis whichever is
less.
For other shareholders, document may be
served by a public notice in newspaper
circulated in the district where the
Registered Office of the Nidhi is
situated; and publication of the same
on the notice board of the Nidhi. -
Notification dated 5th june, 2015.
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Section 21. Authentication of
Documents, Proceedings and
Contracts
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Save as otherwise provided in this
Act,—
(a) a document or proceeding
requiring authentication by a company;
or
(b) contracts made by or on
behalf of a company,
may be signed by any key managerial
personnel or 3[an officer or
employee of the company] duly
authorised by the Board in this behalf.
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Section 22.
Execution of Bills of Exchange,
etc.
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(1) A bill of exchange, hundi
or promissory note shall be deemed to
have been made, accepted, drawn or
endorsed on behalf of a company if
made, accepted, drawn, or endorsed in
the name of, or on behalf of or on
account of, the company by any person
acting under its authority, express or
implied.
(2) A company may, by writing
1
[under its common seal,if any]
authorise any person, either generally
or in respect of any specified matters,
as its attorney to execute other deeds
on its behalf in any place either in or
outside India.
2
[Provided that in case a company does
not have a common seal, the
authorisation under this sub-section
shall be made by two directors or by a
director and the Company Secretary,
wherever the company has appointed a
Company Secretary]
(3) A deed signed by such an attorney
on behalf of the company and under his
seal shall bind the company
3
[
and have the effect as if it were
made under its common seal]
.
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