Friday, 3 October 2014

Companies Act 1956: Incorporation of a Company

Incorporation means that the company is incorporated. It is a legal procedure by which the company is created.
During incorporation following documents are submitted to the registrar of companies (ROC).
                Memorandum of Association signed by the subscribers
                Articles of Association signed by the subscribers
                Prospectus or Statement in lieu of prospectus
                All the agreements made with different persons in connection with the company
                A declaration certificate is to be taken from a C.A or C.S or Advocate, this compliance certificate will mention that the company to be created fulfills all legal requirements and it may be registered.
                Registration is payable on incorporation and all the formalities regarding incorporation are completed.

Certificate of Incorporation:

The ROC will issue a registration number to the company and the company will be registered.
ROC will also issue a certificate of incorporation which is a conclusive proof that the company is registered.

Conclusive nature of certificate of Incorporation:

Certificate of incorporation is a conclusive document and it cannot be challenged on any ground after its incorporation. The certificate of incorporation is a full and final document regarding the registration of company. Hence once the certificate is issued then company comes into existence for all purposes.

Lewis Case:

In this case the company was registered on 8th Jan however certificate had been wrongly dated as 06th Jan by ROC. Company had issue some shares on 6th Jan hence issue of shares was considered as valid issue and it was decided that the certificate was a proof that company has been created.

Moosa Vs Ibrahim:

In this case a public company was created and seven members were required to sign the documents of company. Two members were major members and five were minor signing with a guardian. It was decided by court that the incorporation was valid even though in this case five minor members signed with the single guardian who only signed one in the documents.

Certificate of commencement of business:

Every public company must take certificate of commencement of business from ROC. Hence the ROC will issue a certificate to the company that the same has been registered.

The private companies may start their business after incorporation so they do not require the certificate of commencement of business.

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