The Companies Act, 2013 outlines the legal framework for company incorporation and governance in India. It covers essential topics such as the roles of promoters, the memorandum and articles of association, and the procedures for name reservation and alteration. Key doctrines like constructive notice and indoor management are also discussed, providing insights into corporate law principles. This act serves as a vital resource for business law students and professionals seeking to understand company formation and compliance requirements in India.

Key Points

  • Explains the roles of promoters and their responsibilities in company formation.
  • Covers the memorandum and articles of association, detailing their significance in corporate governance.
  • Discusses the procedures for name reservation and alteration under the Companies Act.
  • Details the doctrines of constructive notice and indoor management relevant to company law.
Keertimathi M P
25 pages
Language:English
Type:Textbook
Accounting
Keertimathi M P
25 pages
Language:English
Type:Textbook
Accounting
300
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Chapter 2.1
Learning Objectives
Basic
Definitions
Promoter
Registrar Memorandum
Articles
Clauses of
Memorandum
Formation
of Company
Analysis on
Articles
Analysis on
Memorandum
Analysis on
Name Clause
Contents
Reservation
of Name
Rectification
of Name
Restrictions
on Name
Alteration of
Name
Analysis on
Situation Clause
Contents
Establishment
of RO
Shifting
of RO
Analysis on
objects clause
Contents
Alteration of
objects clause
Analysis on all
other Clauses
Alteration of
Articles
Conversion of public
company into
private company
and vice-versa
Doctrines
and related
sections
Doctrine of
constructive notice
Doctrine of Indoor
management
Doctrine of
Ultra-vires
Effect of
MOA & AOA
Incorporation
related Sections
Miscellaneous
Incorporation
of Company
Incorporation of
OPC
Incorporation
of Section 8
Company
Declaration of
commencement
of business
Effect of
Resignation
Chapter 2.2
Promoter
Memorandum
a person who is
named as such
in prospectus
(or) AR
control over the affairs
of company either as a
SH (or) as a director
any person upon
whose advice,
directions /
instructions
BOD of the
Company
“Accustomed to
Act”
except when
such advice,
direction (or)
instruction is
given in a
professional
capacity
Indirect Route
Asst.
Registrar
Direct Route
Registrar
Hierarchy
Functions
Registrar
Resignation
of
Companies
Exercise all
such
functions
conferred
under this
Act
Addl.
Registrar
Joint
Registrar
Deputy
Registrar
Articles
means
AOA of a
Company
as originally
framed
as altered
from time
to time
means
MOA of a
Company
as originally
framed
as altered
from time
to time
(or)
(or)
(or) (or)
Chapter 2.3
Basic rules for formation
of a company (Sec.3)
Purpose of
incorporation
Association
Only for a
lawful purpose
Public
Company
Private
Company
OPC
7 / more 2 / more 1 Person
Subscribers to the
Memorandum
Members severally liable
in certain cases (Sec.3A)
When section
gets attracted?
What are the consequences on the
members
falling below the statutory minimum?
Where the no.
of members in
a company has
fall below the
statutory
minimum
Public
Company
Private
Company
Below 7
Below 2
In the first
6 months
After 6
months of fall
Company can
continue to
carry on the
business
Company can
contract its debts
Company shall
be held liable
for all debts
and obligations
General Case
Violative Case
If company carry on
the business and
contract debts after
6 months even
when the number is
below limit
Company cannot
carry on business
in its own name
Company
not liable
Members aware of the fact shall
be jointly + severally liable for
debts contracted after 6 months
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FAQs

What are the basic rules for the formation of a company under the Companies Act, 2013?
According to Chapter 2.3, the basic rules for forming a company include that the purpose of incorporation must be lawful. A public company requires a minimum of seven subscribers, while a private company requires at least two. An One Person Company (OPC) can be formed with just one person as a subscriber. Additionally, if the number of members falls below the statutory minimum, certain consequences apply, such as liability for debts contracted after the fall.

What is the significance of the Memorandum of Association (MOA) in company incorporation?
The Memorandum of Association (MOA) is crucial as it outlines the company's objectives and scope of activities. Chapter 2.4 details various clauses within the MOA, including the Name Clause, Objects Clause, and Liability Clause. These clauses define the company's name, its purpose, and the extent of liability for its members. The MOA must be filed with the Registrar of Companies to legally establish the company.

How can a company alter its name according to the Companies Act, 2013?
Chapter 2.6 explains that a company can alter its name through a process that requires approval from the Board of Directors and shareholders. If the name is identical or too similar to an existing company, the Central Government may direct a change. The alteration must be filed with the Registrar of Companies, and the company must comply with specific provisions under Section 13 of the Act.

What are the doctrines related to the Companies Act, 2013?
The document discusses several important doctrines, including the Doctrine of Constructive Notice, Doctrine of Indoor Management, and Doctrine of Ultra Vires. The Doctrine of Constructive Notice presumes that individuals dealing with a company are aware of its MOA and AOA. The Doctrine of Indoor Management protects outsiders by assuming that internal regulations have been followed. The Doctrine of Ultra Vires states that acts beyond the powers defined in the MOA or AOA are void.

What is the process for the incorporation of a Section 8 company?
Incorporation of a Section 8 company, as outlined in Chapter 2.19, involves applying to the Central Government for a license to operate with charitable objectives. The company must demonstrate that it will apply its profits solely for promoting its objects and may have additional conditions imposed by the government. If approved, the company can be incorporated without using 'Ltd.' or 'Pvt. Ltd.' in its name.

What are the consequences of falling below the statutory minimum number of members in a company?
As stated in Chapter 2.3, if a public company falls below seven members or a private company falls below two, specific consequences arise. For the first six months, the company can continue its business, but after six months, it cannot carry on business in its own name if the number of members remains below the statutory minimum. Members aware of this situation may be held jointly and severally liable for debts incurred after the six-month period.