Incorporation of a Company under Companies Act, 2013

The company has to maintain and preserve at its registered office copies of all the documents and information as originally filed under Section 7(1) till its dissolution under the Act.

Punishment for false particulars. -If any person furnishes any false or incorrect particulars of any material information of which he was aware, he is to be liable for action under Section 447. [S. 7(5)]

Section 447 provides punishment for fraud. If it is proved after incorporation of the company that the incorporation was obtained by furnishing false or incorrect information or by suppressing any material fact or information or by any fraudulent action, the promoters, the persons named as first directors and those making the declaration are also liable for action under Section 447. [S. 7(6)]

In such cases, an application can also be made to the Tribunal which may according to its satisfaction pass any of the following orders:

  1. pass orders for regulation of the management of the company including any changes in its memorandum and articles in public interest or in the interest of the company and its members and creditors;
  2. direct that the liability of the members is to be unlimited;
  3. direct removal of company’s name from the Register of Companies;
  4. pass an order for winding up; or
  5. pass such other orders as it may deem fit.

Before any such orders the company has to be given a reasonable opportunity of being heard in the matter. The Tribunal has to take into consideration transactions entered into by the company, including all the obligations, contracts or payment of any liability. [S.7(7)]

If the Registrar finds the documents to be satisfactory, he registers them and enters the name of the company in the Register of Companies’ and issues a certificate called the certificate of incorporation. [S. 7(2)]. The Registrar has then to allot to the company a corporate identity number which is to be a distinct identity for the company. This number has also to be included in the certificate. [S. 7(3)]

 

 

 

Certificate of incorporation [S. 7]

The certificate of incorporation brings the company into existence as a legal person. Upon its issue the company is born. For the Act provides that “from the date of incorporation such of the subscribers of the memorandum and other persons, as may from time to time be the members of the company, shall be a body corporate, … capable forthwith of exercising all the functions of an incorporated company”. The company’s life commences from the date mentioned in the certificate of incorporation and the date appearing on it is conclusive, even if wrong.

Certificate as conclusive evidence. -Not only does the certificate create the company. It also is “the conclusive evidence that all the requirements of this Act have been complied with in respect of registration and matters precedent and incidental thereto and that the association is a company authorised to be registered and duly registered under this Act”. In other words, the validity of the certificate cannot be disputed on any grounds whatsoever. This is illustrated by the decision of the Judicial Committee of the Privy Council in Moosa Goolam Ariff v Ebrahim Goolam Ariff.

The memorandum of association of a company was signed by two adult persons and by a guardian of the other five members, who were minors at the time, the guardian making a separate signature for each of the minors. The Registrar, however, registered the company and issued under his hand a certificate of incorporation. The plaintiff contended that this certificate of incorporation should be declared void.

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