Registration and Incorporat

Process ofFormation of a
Company
The whole process of formation of a
joint stock company (in India) can be
divided into four broad stages,
namely:
1. Promotion
2. Incorporation
3. Raising/Floatation of Capital
4. Certificate of Commencement of
Business

Registration
The requirements are as follows
Association of persons : come together to
carry on some business. These person called
promoter .If they do not register they can be
considered to be illegal association.
Submission of Document with Registrar of
Company:
MOA
AOA
Signing of MOA and AOA
Cont.

 Copy
of
proposed
agreement,
agreement with company person for
appointment
of
Director,
MD,
Managers
etc
Application
for
availability of name
Consent of director in case of public
ltd. Company.
Filling of the required documents for
Registration to obtain certificate of
incorporation
and
Certificate of
commencement of business

PROMOTIONSTAGE
Promotion refers to the entire backing process by
which a company is brought into life. It begins
with the conceptualization of the birth of a
company, and sets out the purpose for which it is
to be formed. The persons who conceive the idea
to form a company and invest the initial funds
are known as promoters of the company. The
promoters enter into preliminary contracts with
vendors and make arrangements for the
preparation, advertisement and the circulation of
the prospectus, and arrangement of necessary
capital.
cont.

Legal Position of the

Promoters
Promoters occupy fiduciary position (a position
based on trust and confidence) in the
company. Accordingly, they have some basic
duties towards the company listed as follows:
They cannot make profit at the expense of the
company, which they have promoted without
the knowledge and consent of the company. In
case they do so , they may be compelled to
account for it.
They cannot sell their property to the company
at a profit unless all the material facts are
disclosed at the independent board of
directors or the shareholders of the company.
If they do so, the company may repudiate the
contract of sale or confirm the sale after
recovering the profit made by the promoter.

Promoters have the following liabilities

under the Companies Act, 1956
They can be liable for non compliance of
the provisions of the Act
The court may suspend the promoter from
taking part in the management of the
company
Liable for any untrue statement in the
prospectus to the person who has
subscribed for any shares or debentures on
the faith of the prospectus
The liabilities are .
a) to set aside the allotment of shares,
b) sued for damages,
c) sued for compensation
d) criminal proceedings

Incorporation
On registration, the Registrar will
issue a certificate of incorporation.
From the date of incorporation
mentioned in the certificate, the
company become a legal person
separate from its shareholders.
Features

INCORPORATION

1.

2.
3.
4.
5.

Incorporation is the foremost obligation to be fulfilled to

form any type of company under the Companies Act. For a
company to be incorporated, it must be registered with the
Registrar of Companies (ROC). An application in FORM 1A
needs to be filed with the ROC of the state, in which the
Registered Office of the proposed company is to be
located.The application is required to be signed by one of
the promoters. The details to be stated in the said
application are as follows:
Four alternative names for the proposed company.
Justification for the name needs to be specified along with
the application
Names and addresses of the promoters (Minimum 7 for a
public company while 2 for a private company)
Authorized Capital of the proposed company
Main objects of the proposed company
Names of other group companies.

.INCORPORATION

The ROC shall scrutinize the application on submission and send his
approval or objections thereof in about 10 days to the applicant. On
fulfilling of the objections, a formal letter of name approval is issued
by the ROC. On receipt of it, the Memorandum and Articles are
required to be drafted.
Besides the Memorandum, and the Articles, the following documents
must be filed with the ROC for the registration of the company:
1.
An agreement, if any, which the company proposes to enter into with
any individual for appointment as its managing director or whole-time
director or manager.
2.
A statutory declaration in Form 1 by an advocate or attorney to
appear before the High Court, or a Company Secretary, or a Chartered
Accountant in whole-time practice in India who is engaged in the
formation of the company, or by a person who is named as a director
or manager or secretary of the company that the requirements of the
Companies Act have been complied with in respect of the registration
of the company.
Cont.

.INCORPORATION

In addition to the above, in case of a public

company, the following documents must also
be filed:
a)Written consent of directors in FORM NO. 29 to
agree to act as directors
b)The complete address of the registered office
of the company in FORM NO. 18.
c)Particulars of appointment of directors, MD
and manager of the company in FORM NO. 32.
After the company is registered, it receives a
Certificate of Incorporation or Registration
after which the company becomes a legal
entity.

Certificate of Incorporation
Once all the required documents have been filed along
with the registration fee, filing fee, stamp duty, as
specified and they are found to be in order, the ROC
will issue, under his seal and signature, the Certificate
of Incorporation of the company. The certificate of
incorporation is the conclusive evidence that the
requirements of the Companies Act have been
complied with and the company bearing a specific
name is duly registered.
This document is the birth certificate of the company
and is the proof of the existence of the company. Once
this certificate is issued, the company cannot cease its
existence unless it is dissolved by order of the Court or
otherwise.

Thanks for your

attention!

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