Incorporation of a Company

Formation of a company involves certain processes like.

• Incorporation
• Promotion
• Raising Capital
• Commencement of business

Incorporation of a Company

Before forming a company, certain preliminary and key decisions need to be taken about the business. Theses decisions are usually done by a person known as ''Promoter'. Promoter will do all the necessary work incidental to the formation of a company. Section 3 of the Companies Act, 2013 deals with the Mode of Forming Incorporated Company. 

Procedural aspects with regard to Incorporation

1. Application for Availability of Name of company

As per section 4(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.

2. Preparation of Memorandum and Articles of Association

Before filing the documents and information with Registrar of the company, generally, promoters need to prepare two basic documents called as Memorandum of Association and Articles of Association. Memorandum is a document which describes the scope of company's activities and Articles is the document which contains the rules and regulations of the company. These two documents must be signed by the required number of persons necessary for the formation of company and who come forward to form it.

3. Filing of documents

After getting the approval of name and preparing MOA and AOA, documents must be filed with the Registrar of Companies. The following documents are needed to file with the Registrar.

• Memorandum of Association and Articles of Association duly signed by all the subscribers.
• A declaration in the prescribed form by an advocate, CA, CS, Director, Manager or Secretary.
• A declaration by each of the subscribers and director to Memorandum.
• Address for correspondence.
• Details of every subscriber to the Memorandum.
• Particulars of first directors of the company
• Particulars of the interests of the persons

4. Issue of Certificate of Incorporation by Registrar

Registrar on receiving the documents in proper format, register all the documents and information in the register and issue a certificate of incorporation in the prescribed form. On and from the date, corporate identity number will be mentioned in the incorporation certificate. All the document filed with Registrar must be preserved and maintained in copies at Registered office of the company. For any false information provided during incorporation will be liable for action under Section 447.

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Redrafted for Educational Purpose.

Deekshith Kumar,
Assistant Professor of Commerce

Book Reference:

1. Elements of Mercantile Law by N. D. Kapoor
2. Principles of Mercantile Law by Avtar Singh
3. A Textbook of Business Law by Dr. Umesh Maiya
4. Business Law by B.S. Raman