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NEW COMPANY LAW SYLLABUS 5YEARS B.A, L.L.B 6th^ semester UNIT-I Introduction and Concept: Company – historical development- nature and characteristics of Company- kinds of Company- Corporate personality- limited liability- lifting of corporate veil- Promoters- duties and liability of promoters. UNIT-II Incorporation: Procedure of incorporation – Certificate of incorporation- MOA- AOA- Doctrine of indoor management- Prospectus. UNIT-III Management and Control of Companies: Board of Directors- Powers and functions: Distribution of Powers between Board of Directors and general meeting. Directors: appointment- qualifications- position of directors- types of directors- powers and duties of directors- remuneration- removal. Meetings: Meetings of Board and Committees- kinds of meetings- procedure relating to Convening and proceedings at General and other meetings- Resolutions- Prevention of Oppression and Mismanagement. Corporate Social Responsibility. UNIT-IV Financial Structure of Company: Sources of capital: shares - types- allotment- transfer of shares- rights and privileges of shareholders- dividends- declaration and payment of dividends, prohibition of buy back- private placement. Debentures – floating charge- appointment of debenture trustees and their duties- kinds- remedies of debenture holders- redemption. Acceptance of Deposit by Companies, charge on assets. UNIT – V Reconstruction and amalgamation and winding up: Reconstruction, rehabilitation and amalgamation: concept- Jurisdiction and powers of Court and NCLT- vesting of rights and transfer of obligations- takeover and acquisition of minority interest.
Winding up: Concept- modes of winding up- who can apply- procedure under different modes. UNIT-I INTRODUCTION AND CONCEPT The word company is an amalgamation of the Latin word ‘com’ meaning with or together and pains means bread. Originally, it referred to a group of persons who took their meals together. A Company is a form of business organization. It is an union of natural persons involved. It is a creature of statute i.e. it is like a person created by law. Because, it is recognized by government as such it must file tax returns and pay taxes and conform to state and federal law. Meaning A company is nothing but a group of persons who have come together or who have contributed money for some common person and who have incorporated themselves into a distinct legal entity in the form a company for that purpose. A company means association of persons or individuals formed for common purpose. Definition
- According to sec. 2(20) of companies Act, 2013 defines the term Company to mean
a company incorporated under the companies Act 2013 or any previous company law. - Justice James – A company is an association of persons united for a common object.
- According to Sec20(10) of Indian companies Act, 1956 states that ‘company’ means a company as defined in Sec 3. Sec3 (1) (i) states that company means a company formed and registered under this Act, or an existing company. (ii) An existing company means a company formed and registered under any of the former companies Acts. Historical development of company law or Evolution In England- A body Corporate during the 17th^ and 18th^ Centuries could be brought into existence either by a Royal charter or by a special Act of parliament. The English parliament, therefore, passed an Act, known as the Bubbles Act of 1720 which, instead of prohibiting the formation of fraudulent Companies, made the very business of promoting Companies illegal yet the Act remained on the statute book for over a century (124year).It was repealed in 1825, But it was only in 1844 that registration and incorporation of large partnerships was made compulsory. The Joint stock companies Act of 1844 was the first legislative measure which facilitated registration, although the concerns registered under it wear still known as partnerships and the principle of unlimited liability was maintained. The right to trade with limited liability was granted in 1855 and a year later in 1856 the whole law relating to such companies was consolidated since, then companies Acts have been considerably amended, enlarged and improved upon until we get to the English Acts of 1948 and 1985 and of 1989.
(e) Provide for the registration of foreign companies; (f) Provide for co-operatives to operate under the style of companies and be registered; (g) Provide for the color coding of certificates of incorporation and of the registration certificates of foreign companies; (h) Incorporate financial reporting provisions; (i) Provide for the responsibilities of public companies; (j) Provide for the startup and functioning of small companies; (k) Repeal and replace the Companies Act, 1994; and (l) Provide for matters connected with or incidental to the foregoing. Nature of company Basically company is formed by the association of persons to do business and share the profits and losses equally. In other words company is a voluntary association of number of individuals formed for some common purpose. Company is also has its own legal entity and legal personality, company is combined of political, social, economic and legal institutions. In modern days the company has become the most dominant form of business organization. A company being a legal person capable of purchasing, enjoying and disposing of the property in its own name. Company being a body corporate can sue and be sued in its own name; criminal complaints can also be file by the company. A company has right to protect its fair name and it can also sue for any defamatory statement against it or anyone who likely to damage its business or property company has right to seek remedy before the court of law by way of damages. A company is not a citizen As per the citizenship Act, 1955 of India only a natural person can be acitizenand not any juristic persons like corporations State trading Corporation of India VS CTO [AIR 1963 SC 1811] It was decided in the case that A Company is a legal person in the eyes of law and can hold property, sue and be sued in its own name. But like a natural person, it cannot be a citizen.it does not enjoying the fundamental rights which are enjoyed by a citizen. Nationality, domicile and residence of company Though Company cannot be a citizen, yet it has a nationality, domicile and residence. The Nationality of the company is decided by the place of its incorporation. Similarly, the domicile of the company is the place of its registration. A company can have only one Nationality and domicile, but it may have several residences. Gasque Vs Inland Revenue commissioners 1940 K B
It was held that a limited company is capable of having a domicile and its domicile is the place of its registration and domicile clings to it throughout its existence. De Bears Consolidated mines VS Howe, 1906 AC 455 The House of lords held that a company resides for the purposes of Income tax where its real business is carried on. The real business is carried on where the central management and control actually resides. Company is corporation or body corporate. Sec 2 (11) of companies Act, 2013 body corporate or corporation includes a company incorporated outside India, But does not include:-
- A corporative society registered under corporative society Act.
- Any other body corporate which the control government may specify.
- Co-operative sole Sec 2(11), corporation sole is a company like corporate aggregate. Commissions Income Tax VS Godawari sugar mills limited It has been held that a corporation sole within the meaning of sec 2(7) of companies Act, 1956 has been described as an incorporated series of successive persons. S. Govinda menon VS Union of India [AIR 1967 SC 1274] It has been state that the distinction between `corporation sole and corporation Aggregate within the meaning of sec 2(3) of Companies Act, 1956 is that former is not endowed with a separate legal personality, whereas the latter is juristic entity. However, as per Sec 2(11) of Companies Act 2013, there is no distinction between corporation Aggregate and corporate sole. Characteristics of a Company The following are the essential characteristic of a company:-
1. Voluntary Association A company is a Voluntary association of certain person registered Under the Companies Act, law can neither compel a person to become a member or a company nor to give up his membership in a Company. 2. Separate legal Entity A Company is, in law regarded as an entity separate from its members. Owners of a corporation only pay taxes on corporate profits paid to them in the form of salaries, bonuses and dividends. The corporation pays taxes, at the corporate rate, on any profits. Solomon VS Solomon and co .ltd The House of Lords held that once a company is formed and registered under the Act is a separate legal person from its members. 3. limited liability
The company can raise capital by public subscriptions either by way of shares or debentures. TYPES OF COMPANY/ KINDS OF COMPANY: Types of companies that can be formed under 2013 Act has remained same as in 1956 Act except one more class of company has been added. The new class of company is OPC (One Person Company). Companies may be classified into various types on the following basis:
1. On the basis of Incorporation: Unincorporated company In the beginning some companies were constituted by contract. These companies are known as ‘common law companies’. An unincorporated company has no legal personality distinct from its members. The liability of its members. The liability of its members is unlimited. At present there are no such companies as such companies can no longer be formed under the companies Act. Incorporated company An incorporated company is one, which is formed for the purpose of carrying business to earn profit. These companies are incorporated either by the Companies Act of 1956 or some of them are incorporated before passing the Companies Act of
- On the basis of incorporation the companies may be classified into following three categories namely. a) Charted Company: Charted company is created by the charter or special permission granted by the head of the state or countries King or Queen. Giving certain exclusive privileges, rights and powers to a particular body of persons for undertaking commercial activities in specified geographical areas. The British East India Company formed in England in 1600, Dutch East India Company formed in Holland in1602, Eastern Bank of England in 1690 are the best examples of the charted companies. Since India attended independence this type of companies does not exist in India. b) Statutory Company: A statutory company is also known as a corporations. It is a company which is incorporated under special Act of the legislature of the country or the state. The powers, responsibilities, liabilities, objects, scope etc of such companies are clearly defined under the provisions of the particular legislation. Usually these companies are established to run enterprise of social or national importance. The RBI, SBI, the Industrial finance corporation of India, LIC, Indian Airlines Corporations, UTI, the Food Corporation of India, Transportation, water supply, Electricity supply are the best examples of statutory companies. c) Registered Company:
It is a company which is organized by getting it registered with the registrar of the companies under the provisions of Companies Act of the country concerned the formation, working and continuity of such companies are controlled by the Companies Act of 2013.most of the companies in India in the field of trade. Commerce and industry are the registered companies.
2. On the Basis of Liability: On the basis of liability companies may be classified into 2 categories namely: a) Limited Liability Companies: Where the liability of a company is limited such companies are called as limited liability companies. Every limited liability companies should properly mention the word ‘limited’. It is further divided into two i) Companies Limited by Shares[Sec.2 (22)]: Company limited by shares are the companies in which the liability of the members is limited to the extent of nominal or face value of the shares held by him. In case of winding up of the company limited by shares the members cannot be asked to pay more than the amount unpaid on the shares held by them. The company limited by shares may be a public company or a private company. ii) Company Limited by Guarantee[Sec.2 (21)]: Where the liability of the members of a company is limited to a fixed amount which the members undertake to contribute to the assets of the company in the event of its being wound up, the company is called as company limited by guarantee. These are the companies established without having share capital and their main intention is not to make profit and to provide services in promoting arts, culture, sports, charity, science, education, literature etc. the guaranteed members are required to pay the guaranteed amount not during the life of the company but only when the company is liquidated. b) Unlimited Liability Companies[section 2 (92)]: “A company not having any limit on the liability is called as unlimited liability companies.” Where the liabilities of the members in a company are not limited such companies are known as unlimited liability companies. In case of such a company every member is liable for the debts of the company. 3. On the Basis of Number of Members: On the basis of number of members company may be classified into 2 categories namely: a) Private Company: According to section 2(68), “A private company is that company which has minimum paid-up capital of rupees 1lakh or much higher capital as may be prescribed by the Articles of Association.
According to section 2(87) “a subsidiary company is a company which is controlled by holding company”. A company is said to be the subsidiary of another company in the following 3 cases: i) Company controlling the Board of Directors. ii) Holding of majority of shares. iii) Subsidiary of another subsidiary.
5. On the Basis of Ownership: On the basis of ownership company may be classified into two: a) Government Company: According to section 2(45) government company means any company in which not less than 51% of the paid-up capital is held by central government or by the state government. Government Company may be public or private company. Hindustan Aeronautics ltd (HAL), HMT, Hindustan steel ltd, BEL, Ashoka Hotels, Bharath Petroleum, BSNL, MTNL, BEML etc. are the best examples for government company’s. Rules relating to Government Company (section-394): 1. Appointment of Auditors: The auditors shall be appointed by the central government on the advice given by the Auditor General of India. The Auditor General of India will have the power to direct the manner in which the accounts of the government company shall be audited by the auditors. 2. Audit Report: The Auditor of a government company will submit copy of the audit report to the Auditor General of India, who shall make comment upon the audit report in such a manner as he thinks fit. Such audit report shall be placed on annual general meeting of a Government company. 3. Annual Report: Where the central government is a member of the government company it shall send an annual report on the working affairs of the company and laid before both the houses of parliament. Where the State government is a member of Government Company the report shall also be laid before the State legislature. b) Non-Government Companies: It means company which is not a government company. A non- Government Company is a company which is owned and controlled or managed by private investors. The majority companies in India belong to this category. 6. Foreign Company: According to section 2 (42), Foreign Company means a company which is incorporated outside India but establishes business inside India. A company which is incorporated outside India is employed by agents in India but if it does not establish a place of business in India it will not be a foreign company. EX: Nokia, Pepsi, Microsoft, Samsung, Sony, Ranbaxy, Honda, Reebok, Vodafone, Benz etc. are the best examples of foreign companies in India. Some rules regarding Foreign Companies(sections 379- 389):
i) Document: every foreign company within 30 days of the establishment of business in India must submit with the registrar for registration with the necessary certified copies of the MOA, AOA, the full address of the main office of the company, the list of Directors and Secretary of the company and the name and address of the person who authorizes the foreign company in India. ii) Accounts: once in every calendar year a foreign company has to get prepare its balance sheet, profit and loss accounts. It shall file with the registrar every year. iii) Name: every foreign company shall exhibit on outside of every office or place of business its name and the country of incorporation in English and in any one of the local language. iv) Penalty: if any foreign company fails to comply with the rules the company and its officers are liable up to the fine of rupees 10,000, and in continuance of an offence additional fine of rupees 1000 may be imposed every day during which the default continues. v) Registration Charges: every foreign company has to pay a registration charges created on any property in India and also they have to pay annual returns. vi) Winding Up : all foreign companies carrying business in India may be closed by an order of the court, it can also be closed if it has been resolve or otherwise cease to exist according to its own laws of incorporation.
**7. Other kinds of companies:-
- One Man Company or One Person Company:** Introduction The revolutionary new concept of 'One Person Company' (OPC) has been introduced by the Companies Act, 2013. This concept of OPC was first recommended by the expert committee of Dr. JJ Irani in 2005. OPC provides a new opportunities for those who look forward to start their own ventures with a structure of organized business. OPC will give the young businessman all benefits of a private limited company which categorically means they will have access to credits, bank loans, limited liability, legal protection for business, access to market etc. all in the name of a separate legal entity. Though the concept of OPC is new in India but it is a very successful form of business in UK and several European countries since a very long time. Definition of One Person Company One Person Company is defined in Sub- Section 62 of Section 2 of The Companies Act, 2013, which reads as follows:
It is provided in section 92 of The Companies Act, 2013, that the annual returns in the case of One Person Company shall be signed by the company secretary or where there is no company secretary, then by the director of the company. Holding Annual General Meetings – Section 122 of the Companies Act,2013: Provisions relating to General Meetings, Extra Ordinary General Meeting and Notice Convening to General Meeting are not applicable to One Person Company. However, where any business is required to be transacted at an Annual General Meeting, or other General Meeting of the company by means of an ordinary or special resolution, it shall be sufficient if the resolution is communicated by the member of the company and entered in the minutes book which is required to be maintained and signed and dated by the member and such date shall be deemed to be the date of meeting under the purposes of Companies Act, 2013. Board Meetings and Directors – Section149, 152 & 173 of the Act: One Person Company needs to have one director. It can have maximum of 15 directors for the purposes of holding board meetings, in case of a OPC which has only One director, it shall be sufficient compliance if all resolutions required to be passed by such a company at a board meeting are entered in a minute book – signed and dated by the member and such date shall be deemed to have the date of the board meeting for all the Purposes under Companies Act, 2013. Signatures on Financial Statements: The OPC shall file with the Registrar of Companies a copy of financial statements duly adopted by its members along with all the documents which are required to be attached to such financial statement, within 180 days from the closure of the financial year along with cash flow statements. The financial statement shall be signed by only one director and the annual return shall be signed by the company secretary and the director, and in case if there is no company secretary then only by the director. Contracts by One Person Company – Section 193 of the Act: The new Companies Act, 2013 gives special attention to the contracts which will be entered by One Person Company. If the company fails to comply with the provisions as to providing the information to the Registrar of companies then it shall be liable for punishment of fine which will be not less than twenty thousand rupees and extend to one lakh rupees and the imprisonment for a term which may extend up to 6 months. HOW IS AN OPC DIFFERENT FROM SOLE PROPRIETORSHIP The concept of OPC allows a single person to run a company limited by shares, and Sole proprietorship means an entity where it is run and owned by one individual and where there is no distinction between the owner and the business. The distinction between both the structures is as follows: Limited Liability - Fundamentally the basic difference between a sole proprietorship and an OPC is the way and manner in which the liability is treated in an OPC. OPC is different from sole proprietorship because it is a completely separate entity and that is the distinction between the promoter and the company. The liability of the shareholder will be limited to the unpaid subscription money in his name. On the other hand the
liability in a sole proprietorship, the person/owner is alone liable for the claims which will be made against the business. Tax Bracket - Though the concept of an OPC has been incorporated in the Companies Act, 2013 but the concept of same does not exist in tax laws as yet, as a result an OPC can be put in the same bracket of taxation as other private companies. According to Income TA, 1961 a private limited company is under the bracket of 30% on total income with an additional surcharge of 5% if the income exceeds 10 million with an addition to 3%. Succession - In an OPC there is a nominee designated by the member. The nominee which will be a Natural Born citizen of India and who resides in India. The nominee shall in the event of death of the member become a member of the company and will be responsible for the running of the company. But in the case of sole proprietorship this can only happen through an execution of WILL which may or may not be challenged in the court of law. Compliances - A One Person Company has to file annual returns etc just like a normal company and would also need to get its accounts audited in the same manner. On the other hand a sole proprietorship would only need to get audited under the provisions of Section 44 AB of the Income Tax Act, 1961 once its turnover crosses the certain threshold. Conclusion: Though the concept of an OPC is still very new in Indian entrepreneurship and thus very revolutionary, it will take time for such a new concept to be incorporated with complete efficiency, an OPC will have a sparkling future and it will be embraced as a most successful business concept. The reason behind it is the incorporation of same is less paper work, one person can form a company without any additional shareholder.
2. Banking company Sec.2 (9) of companies Act 2013, a company which is defined under banking regulation Act. Sec.5 of the BRA Act, defines company as one which transects the business of banking means accepting the purpose of lending or investment of deposits of money from the public repayable on demand or otherwise, withdrawn by Cheque, draft, order or otherwise. 3. Small company According to sec. 2 (85) companies Act 2013, other than a public company Paid up share capital which does not exceed 50 lakhs Rs, or such higher amount as may be prescribed which shall be not more than 5 crores. Turnover of which per last profit and loss account which does not exceed 2 crore Rs or such higher amount as may be prescribed which shall not be more than 20 years. 4. Listed company According to Sec.2(52) companies Act 2013, company which has any of his securities listed on any registered stock exchange.
Formation of a company involves completion of several legal formalities and procedures. The process of formation of the company can be divided into following stages:-
- Promotion of a company
- Incorporation of a company
- Commencement of business
- Promotion of a company It is the first stage in the formation of a company. It begins with a person or a group of persons having thought of or conceived a possible future business opportunity and then taking an initiative to give it a practical shape by way of forming a company. Meaning of Promoter: A promoter is a person who does the necessary preliminary work incidental to the formation of a company. He is a person who brings the company into existence. In other words, he is the person who takes the necessary steps for formation of a company. The persons, who assume the primary responsibility of matters relating to promotion of a company, are called ‘promoters’. It is the promoters who conceive the ideas of forming the company. Promoters are the persons who give a proper shape to a company in this commercial world. They may be called as the parents of a company to whom a company is born. The role of promoter is vital in the formation of a companies. Definition of promoter: According to section 2 ( 69 ) “promoter” means a person- ( a ) Who has been named as such in a prospectus or is identified by the Company in the annual return; or ( b ) Who has control over the affairs of the company, directly or indirectly whether as a shareholder, director or otherwise; or ( c ) In accordance with whose advice, directions or instructions the Board of Directors of the company is accustomed to act: Provided that nothing in sub-clause ( c ) shall apply to a person who is acting merely in a professional capacity; The first persons, who control a company’s affairs, are its promoters. Twycross VS grant [1877] Lord ,CJ Cockburn defines promoter is one who undertakes to form a company with reference to given object and to set it in going and who takes necessary steps to accomplish that purpose. Perhaps, the true test whether a person is a promoter or not is to find out if he has the desire that company shall be formed and is prepared to take concrete steps which may or may not involve other persons to implement it. Functions / Duties of a Promoters: The followings are the functions of a promoter: i) He conceives the idea of formation of company after a thorough study of the business world. ii) He draws up the scheme and determines the object of a future company
iii) The promoter of a company decides its name and ascertains that it will be accepted by the Registrar of Companies. iv) He prepares the MOA, AOA and Prospectus of the company. v) He takes necessary permission from the appropriate Government. vi) He finds out suitable financiaries to back up the company. vii) He makes arrangements with vendors, directors, legal advisors, bankers, auditors and secretary of the company. viii) He takes the pain for filing necessary documents with the Registrar of Companies for the Certificate of Incorporation. ix) He bears all the preliminary expenses of the company. x) He cannot make either directly or indirectly any profits at the expense of the company. xi) He is not allowed to make any profit by sale of his own property to the company, unless all material facts are disclosed. In brief, a promoter shows the way for a company to stand on its own feet. When all these things have been done they handover the control of the company to Directors, who are often the Promoters under a different name. Position of Promoters: Promoter occupies significant position in formation of a company. However, it is very difficult to determine his accurate legal position, because the company is not in existence. He is neither trustee nor agent of the company. His position may be described with reference to his legal status, duties and liabilities. Legal Status of a Promoters: As to the exact legal status of a promoter, the statutory provisions are silent in most part, except for a couple of Sections in the Specific Relief Act, 1963. His legal status is incapable of precise statements, but in Lyndney & Wigpool Iron Ore Co. v/s Bird , the court described the position of a promoters as follows: “although not an agent for the company, nor a trustee for it before its formation, the old familiar principles of the law of agency and trusteeship have been extended and very properly extended, to meet such cases.” Promoter as Agent or Trustees: Promoters are neither agents nor trustees of a company because no one can act as an agent for a person who is not in existence. Therefore the promoters are not the agents or trustees of a company. Fiduciary position of Promoters: In many respects a promoter stands in a fiduciary relationship towards a company (confidence/trust/ faith) a) Not to make any profit at the expenses of the company: The promoters must not make either any profit at the expenses of the company which he is going to start. If any secret is made the promoter is liable for the loss.
company is not bound to pay the services of solicitor. On the instruction of promoter prepare the necessary documents and obtained the registration of the company. Since, the company was non-existence before incorporation. Therefore, the company could not be sued for those expenses which are incurred on pre-incorporation contract. Ratification of a pre-incorporated contract A company cannot ratify a contract entered into by the promoters on its behalf before its incorporation. The doctrine of ratification applies only if an agent contracts for a principal who is in existence and who is competent to contract at the time of the contract by the agent. UNIT-II INCORPORATION Introduction Incorporation is the legal process used to form a corporate legal entity or company. A corporation is a separate legal entity from its owners. Corporations can be created in nearly all countries in the world and it is the process of legally declaring a corporate entity as separate from its owners. After promotion, the second stage in the formation of a company is the registration or Incorporation. Meaning and Definition A company is said to be form when it is incorporated or registered under the provisions of companies Act. Before the company is formed lot of preliminary works are to be performed such as whether it should be a public or private company, what its capital should be concerned. All these decisions are taken by the certain persons known as ‘promoters’. They do all the necessary preliminary work, incidental to the formation of a company. N Mode of forming incorporated company (section3): Any 7 or more persons (2 or more in case of private company) associated for any lawful purpose may form an incorporated company, with or without limited liability. They shall subscribe their names to a Memorandum of Association and also comply with other formalities in respect of registration. A company so formed may be: A company limited by shares, or a company limited by guarantee, or an unlimited company. Procedure for incorporation (section 7): Before a company is registered, it is essential to ascertain from the Registrar of Companies (for the State in which the registered office of the company is to be situate) if the proposed name of the company is approved. Then the following documents duly stamped together with the necessary fees are to be filed with the Registrar: i) The Memorandum of Association duly signed by the minimum member i.e.7 persons for public company and 2 member for private company. It must be duly stamped.
ii) The Articles of Association, if any, signed by the Subscribes to the, Memorandum of Association. iii) A list of the directors who have agreed to become the first directors of the company (this applies to a public company limited by shares) and their written consent to act as directors and take up qualification shares. iv) A list of directors with their names, address, and occupation is prepared and filed with the registrar of the companies. v) A declaration stating that all the requirements of the Companies Act and other formalities relating to registration have been complied with. Such declaration shall be signed by any of the following persons: viz., an Advocate of the Supreme Court or of a High Court; or an Attorney or a pleader entitled to appear before a High Court; or a secretary or a Charted accountant in whole-time practice in India, who is engaged in the formation of a company; a person named in the Articles as a director, manager or secretary of the company. vi) Director identification number (DIN) is allotted by the ministry to the individual for acting as Director in a company. vii) An application for reservation of name of public limited company shall be made in form NO.1 and for private limited company in form NO.29. Issuance of the certificate of incorporation According to sec.7(2) of companies Act 2013,the registrar of companies on the basis of documents and information under sec.7(1) of the Act, shall register all the documents and information referred that the register and issue a certificate of incorporation in the prescribed form to the effect that the proposed company is incorporated under the Act. Then within 30 days of the date of incorporation of the company, a notice of the situation of the registered office of the company shall be given to the Registrar who shall records the same in the Register book of Companies. Allotment of corporate identity number According to sec.7 (3), the registrar shall allot to the company a corporate identity number and it shall be a distinct identity for the company and the same shall be mentioned in the certificate of incorporation. Procedure for Charitable objects Sec.8 Company is incorporated for the following purposes: For promoting, arts, commerce, science, education, research, social welfare, religion, charity for environment protection for any other purpose related to social welfare and in promoting the object of the company.
- It is not required to use the words ‘ltd’ or ‘Pvt ltd’.
- Availability of Name as in case of incorporation of a public company is to be followed.
- The MOA and AOA should be prepared and typed. It must be signed by the regional director and subscribers of the memorandum
