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Company registration steps for incorporation

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The company registration steps are required to be taken for incorporation of a company other than a producer company. – PowerPoint PPT presentation

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Title: Company registration steps for incorporation


1
Company registration steps for incorporation
  • Company registration procedure
  • Private limited company registration under the
    act 1956
  • Public limited company registration act

2
Company registration steps for incorporation
  • The company registration steps are required to be
    taken for incorporation of a company other than a
    producer company. The following steps are
    required for your company registration
    procedures.
  • Purpose for which a company can be incorporated
  • A company can be incorporated for a lawful
    functional entirely. Every purpose is lawful
    unless it is forbidden by law or is contrary to
    public policy. Subject to the purpose being
    lawful. There is no limit on the purposes for
    which a company can be formed.
  • A company proposed to be formed an illegal
    purpose. Illegal under any law of the country
    cannot be properly registered.
  • Where the purpose is not lawful or where any of
    the objects is illegal. The registrar may refuse
    to register. If registered, the certificate of
    registration is not conclusive for the purpose of
    legitimating the unlawful part of the business.

3
Company Registration Steps for incorporation
  • Ascertain the availability of name proposed for
    the company from the Registrar of Companies. A
    choice of three to four names should be given.
  • Prepare memorandum of association.
  • Prepare articles of association.
  • Get the memorandum and articles of association
    stamped properly.
  • Deposit the requisite amount of registration fee
    as payable on the basis of authorized capital of
    the proposed company as well as the fee for
    documents filed with it.

4
  • File the following forms with the Registrar of
    Companies
  • (a) Memorandum of association of the company
    properly stamped. It is signed in the existence
    of witness by at least 2 persons in the case of a
    private limited company and by at least 7 persons
    in the case of a public limited company.
  • (b) Articles of association properly stamped and
    signed by at least 2 persons in the case of
    private limited company. At least 7 persons in
    the case of a public limited company in the
    existence of witness.
  • (c) A copy of agreement (e.g. agreement for take
    over) if any, referred to in the articles.
  • (d) A statutory declaration by an authorized
    person (in Form No.1) to the effect that the
    conditions of the act. The rules made there under
    in respect of company registration have been
    compiled with in section 33(2).
  • (e) A power of attorney properly stamped and
    performed by all the subscribers allowing anyone
    of them or any other person to make necessary
    corrections on their behalf in the documents
    filed for registration with the Registrar of
    Companies and give due discharge and to receive
    for the certificate of registration.
  • (f) A copy of the letter is intimated to the
    Registrar of Companies for availability of the
    proposed name.

5
The following documents may also be filed if
the applicants so desire
  • (a) A notice in Form No. 18 regarding situation
    of Registration office (section 146). This notice
    can be filed with the Registrar subsequently as
    well. When the company starts to move on business
    or within 30 days of the registration that is
    earlier.
  • (b) Particulars of the directors in Form No.32 in
    duplicate (section 303). These particulars can be
    filed subsequently also, within 30 days of the
    appointment of first directors.
  • (c) In the case of a public limited company
  • (i) Consent in Form No.29 of the persons to act
    as a director or to take and pay for the
    qualification shares of the proposed company
    registration.
  • (ii) Declaration in Form No.20 to the result that
    the provisions of the companies act under section
    149 (2) have been compiled with. The company
    registration must be declared at the registrar
    office in Chennai. This declaration is required
    to file before a company can commence business.

6
Company registration procedure
  • Company Registration Name
  • In case of private limited company
  • In case of companies limited by guarantee

7
The company registration procedure is given below
  • In case of public limited company
  • 1. Select in order of choices, as some eligible
    company names each of which would present as the
    important object of the suggested company.
  • 2. Avoid names which are related to the names or 
    resemble too closely of any other company already
    registered.
  • 3. Follow the guidelines issued by the central
    government for availability or otherwise of
    certain names.
  • 4. See that the name chosen does not violate the
    provisions of Emblems and Names (Prevention of
    Improper Use) Act 1950.

8
  • Assign to the (ROC) Registrar of Companies to see
    which of the names selected by you is available.
    The Form No.1A application is mandated to
    consider by the companies (Central Government)
    General Rules. Each application is payable with a
    fee of Rs.500/-.
  • The fee can be paid in cash or by means of a
    postal drawn in favour of the Registrar of
    Companies, (Rules4A). A specimen power of
    Attorney is given in Annexure 2.5.
  • The Registrar will ordinarily inform within a
    period of 7 days of your application. If the name
    is not available, you will have to selecting  a
    new company names to apply.
  • Let the Articles of Association and Memorandum
    appropriately drafted. (Section 13 to 15 and 26
    to 30).
  • The articles of association require not
    necessarily be registered and prepared in the
    case of public limited company. In the case,
    Table A shall apply, but in practice, they are
    invariably prepared and registered to suit
    individual requirements.
  • Refer Annexures 5.2 and 5.3 for model Articles of
    Association.
  • Ensure that the licensed share capital of the
    declared public limited company at least is or
    more than Rs.5 lakhs or such higher amount as may
    be prescribed to be the minimum paid up share
    capital for a public limited company.

9
Company Registration Name
  • If the shares of the proposed company are
    enlisted with a recognized stock exchange then
    give the draft of the suggested memorandum.
  • Before in the end printing the Articles and
    memorandum , get them vetted by the Registrar of
    Companies.
  • The Articles of Association and  Memorandum are
    stamped as per the Indian Stamp Act which the
    Company is Registration.
  • The both Articles of Association and Memorandum
    signed by at least 7 subscribers, each of whom
    will also write in his own hand his name,
    address, his fathers name,  occupation and the
    number of shares subscribed for.
  • At least one witness to these signatures, who
    will write in his own hand and  sign his fathers
    name, address and occupation. (Section 12, 15 and
    30). Both of these documents are signed on behalf
    of the subscribers.
  • An illiterate subscriber should mark or give his
    thumb impression is described by the person
    writing for him.

10
  • Both documents will be dated.
  • Let the following forms properly signed and
    filled up .
  • Consent of a person to act as a director in Form
    No.29 (Section 266).
  • Undertaking to take and pay for qualification
    shares in Form No.29. This and the person named
    in the Articles of Association as a director has
    not subscribed the Articles of Association and 
    Memorandum for shares at least equal to his
    qualification shares.
  • Get also the following Forms duly filled up and
    signed
  • Declaration of Compliance in Form No.1 on a
    non-judicial stamp paper of appropriate value.
  • Notice of the situation of the company
    registration office in Form No. 18(Section 146).
  • Particulars of directors, secretary or manager in
    Form No.32 in duplicate (Section 303).
  • Forms stated in sub-items
  • (ii) and
  • (iii) though needed to be filed within 30 days of
    the company registration.

11
Register the following with the Registrar with
must registration and filing fees
  • The signed copy and  stamped of the Articles of
    Association and Memorandum  along with another
    copy.
  • The agreement, if any, which the Company is
    appointment any individual for its managing or
    manager or whole-time director .
  • The Forms mentioned in items 13 and 14 above.
  • Any other agreement, if referred to in the
    Memorandum and Articles of Association, as in the
    case, it will form a part of the Memorandum and
    Articles.
  • Registars letter suggesting about the
    availability of name.
  • A letter of authority (power of Attorney) on a
    duly stamped paper by the subscribers in favour
    of one of them or any other person for creation
    mandatory corrections on their behalf in the
    papers and documents registered for company
    registration.
  • A pay order /demand draft for registration
    calculated in accordance with the proposed
    authorized capital of the company. In addition
    filing fee for documents annexed with the
    application is also be paid.

12
In case of private limited company
  • The procedure for private limited company
    registration is the same as that for a public
    limited company with the following exceptions
  • There should be at least 2 subscribers in place
    of 7.
  • The Form No.29 will not be required to be changed
    and filed in this case.
  • The private limited company registration of the
    articles of association with the Registrar of
    Companies is mandatory.
  • The minimum authorized share capital is Rs.1 lakh
    or such higher amount as may be imposed to be the
    minimum paid-up capital for a private limited
    company.
  • The provisions of Section 3 (1) of the companies
    act should, however, be carefully noted while
    drawing up to the Memorandum and Articles of
    Association of a private limited company.

13
  • The company registration procedure of a company
    limited by guarantee is the same as that for a
    public limited company or a private limited
    company. The case may be, as described earlier.
    In the memorandum of association of such a
    company.
  • However, a clause stating the amount of guarantee
    shall have to be added in addition to the other
    necessary clauses.
  • A guarantee company may be a company with a share
    capital or without a share capital.
  • A company formed not for profit may be formed and
    is usually formed as a guarantee company.
  • A company limited by guarantee may be either a
    private limited company or public limited
    company.
  • The producer in case of a producer company is the
    same as that of a private limited company except
    the following
  • There should be ten or more individuals each of
    them should be a producer within the meaning of
    clause (n) of section 581-A.
  • Any two or more producer institutions within the
    meaning of clause (m) of the said section.
  • A combination of ten or more individuals and
    producer institutions.
  • The signed copy and stamped of the articles of
    association and memorandum as prepared under
    sections 581F and 581G.

14
Private limited company registration under the
act 1956
  • A private limited company has been defined in
    Section 3 (1) of the act 1956. The minimum
    paid-up capital of a company which has a Rs. one
    lakh or such higher paid-up capital as may be
    specified.
  • (a) restrictions towards transfer of its shares.
  • (b) the company members limits is fifty not
    including any other than members
  • (i) persons who are in the company employee .
  • (ii) persons who, having been previously in the
    employment of the company. The company members
    while in that employment. They have proceed to be
    members after the employment is concluded.
  • (c) proscribes any invitation to the public to
    allow for any shares in or debentures of the
    company.
  • (d) proscribes any acceptance or invitation of
    deposits from persons other than its members,
    directors, or their relations.

15
Private limited company registration
  • Where two or more persons have one or more shares
    in a company together. They shall for the
    resolutions of this explanation, be handles as a
    single member.
  • In the default of these conditions. It cannot
    retain its character of a private limited
    company. It will be treated as a public limited
    company.
  • The articles of association of a private limited
    company must expressly contain the same
    limitations,restrictions and prohibitions as
    declared in clause (iii) of sub-section (1) of
    section 3 of the companies act.
  • Private agreement between members as to right to
    transfer Where under the articles of a private
    limited company no transfer was possible without
    previous authorize of the board of directors. The
    supreme court held that this would require
    written resolution of the board of directors
    sanctioning the proposed transfer.
  • The only proper conditions on the transferability
    of the shares of a private limited company are
    those included in the (AOA) articles of the
    Association of the company. Any extra regulation
    not included in the Articles.
  • In a private term between two shareholders which
    moves further obstacles in the way of
    transferability is not building either on the
    shareholders or the company. In this case the
    court upheld the view that shares in a company
    are freely transferable in the absence of express
    restriction in the Articles.
  • The restriction must be set out expressly or must
    arise by necessary implication. Any ambiguous
    provision is explain in approval of the share
    holders.

16
  • A private limited company registration with a
    minimum of 2 persons. It can have a maximum of 50
    persons who have associated for a lawful purpose.
    In computing the ceiling of 50 persons, joint
    holders of shares are treated as a single person.
  • In the annual return to be filed with the
    Registrar of Companies in terms of section 159 of
    the act. Every private limited company is
    required to certify that the company has not
    provided any invitation to the public to holds
    for any debentures or  shares of the company.
  • It has to certify that the surplus of the number
    of company members over 50 consists entirely of
    the persons who are not extracted as members in
    terms of section 3 (1) (iii) of the companies
    act. The company registration has placed in
    Chennai and Bangalore.
  • It has also to be certified that the company did
    not invite or accept deposits from persons other
    that its directors, members or their relatives.
    These certificates are required to be signed by a
    director and a secretary and a manager or by two
    directors of the company. where there is one,
    whom shall be the managing director.

17
Public limited company registration act
  • Company Registration Name
  • In case of private limited company
  • In case of companies limited by guarantee

18
  • A public limited company has been defined in
    section 3 (2) (iv) to mean a company which-
  • is not a private limited company
  • The minimum paid-up capital of  a public company
    which has five lakh rupees or such higher paid-up
    capital as may be prescribed.
  • is a private limited company which is a
    subsidiary of a company which is not considered
    as a private limited company.
  • As per amendments made in clauses (iii) and (iv)
    of sub-section (1) by the Act of 2000. The
    minimum paid-up capital of a private limited
    company must have Rs.1 lakh for their company
    registration.
  • The minimum paid-up capital of a public limited
    company must have a  Rs.5 lakhs. This requirement
    can only be compiled with by the promoters/
    subscribers to the memorandum by subscribing for
    the shares of the requisite paid-up share capital
    through subscription clause of the memorandum of
    association of the company as its registration.

19
Consequence of failure to effect increase
  • An existing company having less than the required
    minimum paid-up share capital must. However,
    ensure that the paid-up capital is increased at
    least to the level of the prescribed sum of Rs.1
    lakh or Rs.5 lakhs.
  • As the case may be, within 2 years from the date
    of the registration of the companies (Amendment)
    Act, 2000 which is 13-12-2000. In case of
    default, considered the provision has been made
    under sub-section (5) to the effect that such a
    company is consider as a defunct company under
    section 560. The company name shall be affect
    from the register of companies maintained by the
    Registrar.
  • In such an event, the Registrar is not required
    to comply with the procedure laid down in
    sub-sections(1), (2) and (3) of section 560. It
    may straight away strike off the company name
    from the register. Publish a notice of it in the
    Official Gazette in terms of s.560(5).
  • The company or any member or any creditor may,
    however, approach the Court for its revival under
    s.560(6) by producing evidence in support of
    enhancement of the paid-up share capital of the
    company.
  • It appears that the provision is considered to
    made in sub-section (5) may not be in public
    interest. It may cause hardship to the creditors
    of the company struck off. These conditions do
    not assign to a section 25 company or a company
    not having any share capital.
  • Under Section 12 of the Act, a public limited
    company registration with 7 or more persons
    associated for any lawful purpose. While a
    minimum number of persons is required to form a
    public limited company. There is no ceiling on
    the maximum number of its members.

20
Distinguishing features between a Public
limited Company and a Private Company
  • The major distinguishing features between a
    Private limited Company and Public Limited
    Company are as under below
  • (i) A minimum of 7 persons are required to form
    public company. Whereas in the case of private
    limited company only 2 persons are required for
    private limited company registration.
  • (ii) There is no ceiling on the number of members
    of the public limited company. Whereas in the
    case of private limited company. The number of
    members should not exceed 50 excluding. The
    members who are not past of present employees of
    the company. The join holders are counted as one
    member for this purpose.
  • (iii) The public limited company can invite the
    public to subscribe to its share capital. Whereas
    the private limited company is prohibited from
    doing so.
  • (iv) The shares of public limited company are
    freely conveyable in accordance with the Articles
    of the company. Whereas the transfer of shares
    of  private limited company are subject to
    certain regulations

21
  • A public limited company is subject to all  the
    regulatory provisions of the Companies Act 1956.
    Whereas a private limited company enjoys certain
    privileges and exemptions from some stipulation
    of the act.
  • (vi) A public limited company can accept/renew
    deposits from public. Whereas a private limited
    company cannot invite and/or assume deposits from
    public except from its members their directors or
    their relatives.
  • (vii) A private limited company can commence new
    business immediately after registration. But, a
    public limited company cannot do so.
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