Incorporation and Commencement of Business

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Incorporation and Commencement of Business6/16/2015Sriram Srinivasan, Shristi Sinha

TABLE OF CONTENTSTOPIC

Page(s)

1. INTRODUCTION2

2. POSITION UNDER CURRENT ACT4

3. PROMOTION5

4. PROCEDURAL ASPECTS WITH REGARD TO INCORPORATION

6

5. OBTAINING DIGITAL SIGNATURE

6

6. OBTAINING DIN6

7. NAME AVAILABILITY OF COMPANY7

8. PREPERATION OF MOA7

9. PREPERATION OF AOA11

10. COMPANIES ACT 1956 AND 2013

13

11. FILING OF DOCUMENTS

16

12. ISSUE OF CERTIFICATE OF INCORPORATION22

13. ALLOTMENT OF CORPORATE IDENTITY NUMBER23

14. FORMS24

15. PROCEDURE FOR COMMENCEMENT OF BUSINESS25

16. COMPANIES (INCORPORATION) AMMENDMENT RULES, 201526

A company comes into existence is generally by a process referred to as incorporation. Once a company has been legally incorporated, it becomes a distinct entity from those who invest their capital and labor to run the company.This project addresses the major features of incorporation under the new companies act inclusive of the bare act provisions, and is inclusive of the amendements introduced in 2015.

Position As Under Companies Act, 2013 ( Including Companies Act 2015 Amendement):-

Sr No+Action PointRequirement

01Obtain Digital Signature Certificate (DSC)Obtain a Digital Signature Certificate from authorized DSC issuing authority.

02Obtain Director Identification No. (DIN) [S.153]Make Application in Form DIR-3 [Rule 9 of Chapter XI Rules]

04Apply for Reservation of Name [S.4(4)]Apply in Form No. INC.1 [Rule 9]. The same shall be reserved for a period of 60 days

05Adoption of Memorandum of Association [S.4(6)]MoA shall be in respective form as prescribed in Table A, B, C, D and E of Schedule I as may be applicable

06Adoption of Articles of Association [S.5(6)]MoA shall be in respective form as prescribed in Table F, G, H, I and J of Schedule I as may be applicable

07IncorporationFile with ROC Form No. INC.7 [Rule 12 to 18] along with(a) The Memorandum and Articles of the company duly signed by all subscribers;(b) A declaration in Form No.INC.8 by an advocate or Practicing professional (CA, CS, CA) who is engaged in incorporation, and a person named in director as Director, Manager or Secretary, that all requirements related to incorporation has been complied with;(c) an affidavit in Form No. INC.9 from each subscriber and first director that; he is not convicted of any offence in connection with promotion, formation or management of any company, he is not been found guilty of any fraud or misfeasance or of any breach of duty to any company during preceding five years, all the documents filed with the Registrar contain correct, complete and true information to the best of his knowledge and belief;(d) the address for correspondence till its registered office is established;(e) the particulars of every subscribers along with proof of identity;(f) the Particulars of first directors along with proof of identity; and(g) the particulars of interests of first directors in other firms or bodies corporate along with their consent to act as directors.

08Registered Office [S.12]A company shall have a registered office within 15 days of Incorporation and it shall file Form No.INC.22 [Rule 25] to verify the same

PROMOTION The first step to form a company is the process known as promotion where a person persuades others to contribute capital to a proposed company before it is incorporated . Such a person is called the promoter of the company. Promoters also can enter into a contract on behalf of a company before or after it has been granted a certificate of incorporation, and arrange share issues in the name of the company. Section 3 to 22 of the Companies Act, 2013 (herein after called the Act) read with Companies (Incorporation) Rules, 2014 made under Chapter II of the Act. Section 2 (69) of the Companies Act, 2013 defines the term promoter.FORMATION OF A COMPANY Section 3(1), a company may be formed for any lawful purpose bya. seven or more persons, where the company to be formed is to be a public company;b. two or more persons, where the company to be formed is to be a private company; orc. one person, where the company to be formed is to be One Person Company

A company formed under sub-section (1) may be eithera. a company limited by shares; orb. a company limited by guarantee; orc. an unlimited company.ONE PERSON COMPANY As per section 2(62) of the Companies Act, 2013, One Person Company means a company which has only one person as a member. Nomination of a person shall be filed who would become the member of the company in case of the death of the subscriber in Form No INC.2 along with consent of such nominee obtained in Form No INC.3 and fee as provided in the Companies (Registration offices and fees) Rules, 2014. The company shall within thirty days of receipt of the notice of withdrawal of consent under sub-rule (3) file with the Registrar, a notice of such withdrawal of consent and the intimation of the name of another person nominated by the sole member in Form No INC.4.PROCEDURAL ASPECTS WITH REGARD TO INCORPORATION1. Obtain Digital Signatures

Nowadays various documentprescribedunder the Companies Act, 2013, are required to be filed with the digital signature of theManaging Directoror Director or Manager or Secretary of the Company, therefore, it is compulsorily required to Obtain a Digital Signature Certificate from authorized DSC issuing authority for at least one director to sign the E-forms related toincorporatelike form INC.1 and other documents.

2. Obtain Director Identification Number [Section 153]

As per 153 of the Companies Act, 2013, everyindividualintending to be appointed asdirector ofa company shall make an application for allotment of Director Identification Number in formDIR.3to the Central Government in such form and manner and along with such fees as may be prescribed.

Therefore, before submission of e-FormINC.1for availability of name, all thedirectors ofthe proposed company must ensure that they are having DIN and if they are not having DIN, it should be first obtained.

3. Name availability for proposed company

As per section 4(4) read withRule-9of Companies (Incorporation) Rules, 2014, application for the reservation/availability of name shall be in Form no.INC.1along with prescribed fee of Rs. 1,000/-. The approval of the name of the company is done by the Registrar of Companies (ROC) in the State/Union Territory in which the company will maintain its Registered Office. Section 4(2) says that the name should not be identical to any existing companys name. The application should mention at least four suitable names of the proposed company, in order of preference. In the case of a private limited company, the name of the company should end with the words "Private Limited" as the last words. In case of a public limited company, the name of the company should end with the word "Limited" as the last word. The ROC informs the applicant within seven days from the date of submission of the application, whether or not any of the names applied for is available. Validity of Name approved by ROC:As per section 4(5), maximum time for which name will be available has been prescribed in the law itself under section 4(5). The name will be valid for a period of 60 Days from the date on which the application for Reservation was made. If one is unable to do so, an application may be made for renewal of name by paying additional fees. After obtaining the name approval, it normally takes approximately two to three weeks to incorporate a company depending on where the company is registered.

4. Preparation of Memorandum of AssociationMemorandum of association is one of the documents which has to filed with the registrar of companies at the time of incorporation. It is a document which sets out the constitution of the company and is really the foundation on which the structure of the company is based. It contains the fundamental conditions upon which alone the company is allowed to be incorporated. A company may pursue only such objects and exercise only such powers as are conferred expressly in the memorandum. Lord Cairns in Ashbury Railway Carriage Co. V. Riche pointed out, The memorandum is as it were, the area beyond which the action of the company cannot go. Section 2(56) defines MOA. If one is unable to do so, an application may be made for renewal of name by paying additional fees. After obtaining the name approval, it normally takes approximately two to three weeks to incorporate a company depending on where the company is registered. Section 4 prescribes the particulars to be mentioned in a memorandum of association and other requirements. The following forms are applicable to the following companies:

Form in:Type of Company

TABLE ACompany limited by shares.

TABLE BCompany limited by guarantee not having a share capital.

TABLE CCompany limited by guarantee having a share capital.

TABLE DUnlimited company not having a share capital.

TABLE EUnlimited company having a share capital.

As per Section 6, the Companies Act, 2013 shall override the provisions in the memorandum of a company, if the latter contains anything contrary to the provisions in the Act. The following things must be stated in the Memorandum of a company:

a) Name Clause Name Clause in the Memorandum of Association confers protection against subsequent company registration in the same or closely similar name. Ministry of Corporate Affairs (MCA) has clarified that display of its name in English in addition to the display in the local language will be a sufficient compliance with the requirements of the section. The Central Government is empowered to direct a company, to rectify its name if by inadvertence it has been registered with a name similar to that of an existing company. If a company is so directed by the Central Government, it must change the name within 3 months of the direction after passing an ordinary resolution.b) Situation Clause Memorandum of Association must state the name of the State in which the registered office of the company is to be situated. It will fix up the domicile of the company. Address of the registered office of the company need not be mentioned in the Memorandum of Association. Within 15 days of its incorporation, and at all times thereafter, the company must have a registered office to which all communications and notices may be sent.c) Object Clause As per Section 4(1)(c) all companies must state in their memorandum the objects for which the company is proposed to be incorporated. The purpose of the objects clause is to enable the persons dealing with the company to know its permitted range of activities. The acts beyond this ambit are ultra vires and hence void. Even the entire body of shareholders cannot ratify such acts. However, as against the existing requirement of the 1956 Act, the 2013 Act does not require the objects clause in the memorandum to be classified as the following:(i) The main object of the company(ii) Objects incidental or ancillary to the attainment of the main object(iii) Other objects of the company [section 4(1) of 2013 Act] The basic purpose in the 1956 Act for such a classification as set out in section 149 of the 1956 Act, is to restrict a company from commencing any business to pursue other objects of the company not incidental or ancillary to the main objects except on satisfaction of certain requirements as prescribed in the 1956 Act like passing a special resolution, filing of declaration with the ROC to the effect of resolution.

d) Liability Clause As per this clause liability of the members is limited, if it is intended that the company be limited by shares or by guarantee. In a company limited by shares, no member can be called upon to pay more than what remains unpaid on the shares held by him. In a company limited by guarantee, the liability is the amount which each member should undertake to contribute to the assets of the company in the event of liquidation of the company.e) Capital Clause

Memorandum of Association of a limited company having share capital must state the amount of share capital with which the company is to be registered which is usually called authorized or nominal capital. Further, division of registered share capital into shares of a fixed amount is also required to be given in the memorandum. Each subscriber must take at least one share and write opposite his name the number of shares he takes.f) Declaration For Subscription

All the subscribers are required to declare that they are desirous of being formed in a company. The statutory requirements regarding subscription of memorandum are that: each subscriber must take at least one share; each subscriber must write opposite his name the number of shares which he agrees to take. [Section 4(1)(e))]g) Signing Of Memorandum

Rule 13 of Companies (Incorporation) Rules 2014 states that the Memorandum and Articles of Association of the company shall be signed by each subscriber along with by each subscriber to the memorandum, who shall add his name, address, description and occupation, if any, in the presence of at least one witness who shall attest the signature.5. Preparation of Articles of Association The Articles of Association is defined in Section 2(5) of Companies Act, 2013. The Articles must be in accordance to the following form as specified in Tables, F, G, H, I and J in Schedule I

Form in:Type of Company

TABLE FCompany limited by shares.

TABLE GCompany limited by guarantee having a share capital.

TABLE HCompany limited by guarantee not having a share capital.

TABLE IUnlimited company having a share capital.

TABLE JUnlimited company not having a share capital.

The articles of association of a company are its bye-laws or rules and regulations that govern the management of its internal affairs and the conduct of its business. They are subordinate to and are controlled by the memorandum of association. The articles govern the ways in which the objects of the company are to be carried out. But they must keep within the limits marked out by the memorandum and the Companies Act. ENTRENCHMENT PROVISONS: The articles may contain provisions for entrenchment which can be altered when more stringent conditions are complied [Section 5 (3)]. This provision has been brought in by the Companies Act, 2013.

This provision acts as a protection to the minority shareholders and is of specific interest to the investment community. This shall empower the enforcement of any pre-agreed rights and provide greater certainty to investors, especially in joint ventures. When can an entrenchment provision be added:The provisions for entrenchment referred to in section 5(3) shall be made either on formation of a company, or By an amendment in the articles agreed to by all the members of the company.

Rule 10 of Companies (Incorporation) Act, 2014 talks about the manner for notice to ROC for articles containing provisions of entrenchment. Form No. INC 2 or Form No. INC 7 for provision at the time of incorporation Form No. MGT 14 for provisions in existing companies.

Companies Act 1956 and 2013:Sr. No.1956 Act2013 ActAnalysis

1.Concept of One Person Company was not there in the 1956 Act.This concept was introduced in the Act of 2013.Promotes entrepreneurship to persons aspiring to establish a One Person Company.

2.The Memorandum of Association had mandatory content in the form of five clauses: Name clause, Registered Office Clause, Objects clause divisible into Main objects, Ancillary objects and Other objects, Liability clause and Capital Clause.Same clauses required except no classification required for the Object Clause. As a result S. 149(2A) and 149(2B) are no longer applicable.As a result of this the companies are not required to make a division in the object clause.

3.The procedural aspects for Reservation of name for proposed Company is not covered in the Act.It provides for making an application for reservation of new name or change of name of an existing company to the ROC on payment of prescribed fees. As the procedural aspect has been covered so it is less cumbersome for the companies as the procedural aspect is explained.

4.No recourse provided for obtaining name by providing wrong or incorrect information.Recourse provided. If company is: not incorporated: reserved name may be cancelled after penalty of Rs. 1,00,000 incorporated: ROC may give direction to change name within 3 months or make petition for winding up of the company.Thus the rules are made more stringent and serious repercussions can be there if name is obtained by wrong means.

5.Entrenchment provision in Articles of Association did not exist.Articles may provide for more stringent procedure for altering certain provisions in the AoA.

ANALYSIS OF 1956 AND 2013 ACT ONE PERSON COMPANYThe introduction of the concept of One Person Company in the Act is being regarded as a promising concept. This concept envisages bringing in the unorganized business sector into the form of organized business sector by conferring them the status of a private limited company and also promotes entrepreneurship by providing various incentives and exemptions to persons aspiring to establish a One Person Company.

The Old Act mandated a minimum of two shareholders in order to constitute a company which was an obstacle for entrepreneurs who intended to launch a business venture with limited liabilities. Such entrepreneurs were left only with the option of starting a sole proprietorship. The foregoing requirement of bringing in two shareholders was a hurdle for aspiring entrepreneurs to incorporate a company and also an obstacle for the growth of the Indian economy. In an attempt to make things more logical and with a view to promote more avenues for sole business ventures, the Act has incorporated the concept of One Person Company.

ADVANTAGES OF OPC Limited Liability:One Person company confers a separate legal identity upon single person business entities and thereby limits the liabilities of the entrepreneurs to the extent of paid subscription money only. Perpetual Succession:A One Person Company being an incorporated entity shall be a perpetual entity and thereby unlike a sole proprietorship, the death or incapacity of the sole member would not dissolve the company. Middlemen eliminated:One Person Companies enable small entrepreneurs to set up a company by allowing the shareholders to directly access the target market and avail credit facilities, bank loan rather than being forced to share their profits with middlemen. Compliances:One Person Companies have been exempted from various procedural formalities not otherwise available to private companies such as conducting an AGM, General meeting or Extraordinary General Meeting (EGM) etc. thereby, making its operation very convenient and hassle free.

ENTRENCHMENT PROVISIONThough there was nothing specific as entrenchment Clause in Companies Act, 1956, the Old Act did recognize the concept of additional legal safeguards and checks and controls through judicial decisions. The New Act does not define entrenchment nor provides an explanation for identifying entrenchment Clause. The entrenchment clause when introduced by an existing private Company, the same needs to be approved by all shareholders and in case of public limited Company the same needs to be approved by Special resolution. The reason for variance in manner of voting in Private and Public Company limited by shares for introduction of entrenchment Clause is not reasoned. In fact there needs to be special procedure even to introduce such entrenchment Clause in Public Company as Promoters may overpower the minority shareholders and bring in these restrictions much against the wish of minority.

The Entrenchment Clause, however, needs to be in accordance with the Memorandum of Association of the Company and the Companies Act, 2013. Any entrenchment Clause which is against the provision of Companies Act, 2013 or Memorandum of Association is void and unenforceable. The additional safeguard provided by the Entrenchment Clause will raise number of legal issues about their validity. Whether the validity of Entrenchment Clause can be tested on the grounds of reasonableness is a moot question.

6. Filing of Documents:-

Section 7(1)(a) states that the memorandum and articles of the company duly signed by all the subscribers to the memorandum in such manner as may be prescribed.

Memorandum and Articles of Association of the company duly signed:-

7.(1) There shall be filed with the Registrar within whose jurisdiction the registeredoffice of a company is proposed to be situated, the following documents and information for registration, namely:(a) the memorandum and articles of the company duly signed by all the subscribers to the memorandum in such manner as may be prescribed; (b) a declaration in the prescribed form by an advocate, a chartered accountant, cost accountant or company secretary in practice, who is engaged in the formation of the company, and by a person named in the articles as a director, manager or secretary of the company, that all the requirements of this Act and the rules made there under in respect of registration and matters precedent or incidental thereto have been complied with;(c) An affidavit from each of the subscribers to the memorandum and from persons named as the first directors, if any, in the articles that he is not convicted of any offencein connection with the promotion, formation or management of any company, or that he has not been found guilty of any fraud or misfeasance or of any breach of duty to any company under this Act or any previous company law during the preceding five years and that all the documents filed with the Registrar for registration of the company contain information that is correct and complete and true to the best of his knowledge and belief;(d) the address for correspondence till its registered office is established; (e) The particulars of name, including surname or family name, residential address,nationality and such other particulars of every subscriber to the memorandum along with proof of identity, as may be prescribed, and in the case of a subscriber being a body corporate, such particulars as may be prescribed; (f) The particulars of the persons mentioned in the articles as the first directors of the company, their names, including surnames or family names, the Director Identification Number, residential address, nationality and such other particulars including proof of identity as may be prescribed; and(g) The particulars of the interests of the persons mentioned in the articles as the first directors of the company in other firms or bodies corporate along with their consent to act as directors of the company in such form and manner as may be prescribed.

This is read with section13 of Companies (Incorporation) Rules 2014, which states thatThe Memorandum and Articles of Association of the company shall be signed in the following manner, namely:-

(1) The memorandum and articles of association of the company shall be signed by each subscriber to the memorandum, who shall add his name, address, description and occupation, if any, in the presence of at least one witness who shall attest the signature and shall likewise sign and add his name, address, description and occupation, if any and the witness shall state that I witness to subscriber/subscriber(s), who has/have subscribed and signed in my presence (date and place to be given); further I have verified his or their Identity Details (ID) for their identification and satisfied myself of his/her/their identification particulars as filled in(2) Where a subscriber to the memorandum is illiterate, he shall affix his thumb impression or mark which shall be described as such by the person, writing for him, who shall place the name of the subscriber against or below the mark and authenticateit by his own signature and he shall also write against the name of the subscriber, the number of shares taken by him.(3) Such person shall also read and explain the contents of the memorandum and articles of association to the subscriber and make an endorsement to that effect on the memorandum and articles of association.(4) Where the subscriber to the memorandum is a body corporate, the memorandum and articles of association shall be signed by director, officer or employee of the body corporate duly authorized in this behalf by a resolution of the board of directors of the body corporate and where the subscriber is a Limited Liability Partnership, it shall be signed by a partner of the Limited Liability Partnership, duly authorized by a resolutionapproved by all the partners of the Limited Liability Partnership: Provided that in either case, the person so authorized shall not, at the same time, be a subscriber to the memorandum and articles of Association.(5) Where subscriber to the memorandum is a foreign national residing outside India-(a) in a country in any part of the Commonwealth, his signatures and address on the memorandum and articles of association and proof of identity shall be notarized by aNotary (Public) in that part of the Commonwealth. (b) in a country which is a party to the Hague Apostille Convention, 1961, his signatures and address on the memorandum and articles of association and proof of identity shall be notarized before the Notary (Public) of the country of his origin and be duly apostillised in accordance with the said Hague Convention.(c) in a country outside the Commonwealth and which is not a party to the Hague Apostille Convention, 1961, his signatures and address on the memorandum and articles of association and proof of identity, shall be notarized before the Notary (Public) of such country and the certificate of the Notary (Public) shall be authenticated by a Diplomaticor Consular Officer empowered in this behalf under section 3 of the Diplomatic and Consular Officers (Oaths and Fees) Act, 1948 (40 of 1948) or, where there is no such officer by any of the officials mentioned in section 6 of the Commissioners of Oaths Act, 1889 (52 and 53 Vic.C.10), or in any Act amending the same. (d) visited in India and intended to incorporate a company, in such case the incorporation shall be allowed if, he/she is having a valid Business Visa.

Declaration from the professional:-Section 7(1)((b) states that a declaration in the prescribed form by an advocate, a chartered accountant, cost accountant or company secretary in practice, who is engaged in the formation of the company and by a person named in the articles as a director, manager or secretary of the company, that all the requirements of this Act and the rules made there under in respect of registration and matters precedent or incidental thereto have been complied with;

Rule 14 of The Companies (Incorporation) Rules 2014 states that for the purposes of clause (b) of sub-section (1) of section 7, the declaration by an advocate, a Chartered Accountant, Cost accountant or Company Secretary in practice shall be in Form No. INC.8. Affidavit from the subscribers to the Memorandum:-

Section 7(1)(c) states that an affidavit from each of the subscribers to the memorandum and from persons named as the first directors, if any, in the articles that he is not convicted of any offence in connection with the promotion, formation or management of any company, or that he has not been found guilty of any fraud or misfeasance or of any breach of duty to any company under this Act or any previous company law during the preceding five years and that all the documents filed with the Registrar for registration of the company contain information that is correct and complete and true to the best of his knowledge and belief; Rule 15 of The Companies (Incorporation) Rules 2014 states that For the purposes of clause (c) of sub-section (1) of section 7, the affidavit shall be submitted by each of the subscribers to the memorandum and each of the first directors named in the articles in Form No.INC.9

The address for correspondence till its registered office is established:-

Under Section 12, a company shall, on and from the 15th day of its incorporation and at all times thereafter, have a registered office capable of receiving and acknowledging all communications and notices as may be addressed to it. The company can furnish to the registrar verification of registered office with in 30 days of incorporation in the manner prescribed. As per rule 25(1) of Companies (Incorporation) Rules 2014, the verification of registered office shall be filed in Form no INC 22. Where the location of the registered office is finalised prior to Incorporation of a company by the promoters, the promoters can also file along with the Memorandum and Articles, the verification of its registered office in Form no INC 22. Particulars of subscribers

Section 7(1)(e) states that the particulars of name, including surname or family name, residential address, nationality and such other particulars of every subscriber to the memorandum along with proof of identity, as may be prescribed, and in the case of a subscriber being a body corporate, such particulars as may be prescribedRule 16 of Companies (Incorporation) Rules talks about the particulars to be filled with the registrar at time of incorporation.Particulars of every subscriber to be filed with the Registrar at the time of incorporation:-(1) The following particulars of every subscriber to the memorandum shall be filed with the Registrar-(a) Name (including surname or family name) and recent Photograph affixed and scan with MOA and AOA:(b) Fathers/Mothers/ name:(c) Nationality:(d) Date of Birth:(e) Place of Birth (District and State):(f) Educational qualification:(g) Occupation:(h) Income-tax permanent account number:(i) Permanent residential address and also Present address (Time since residing at present address and address of previous residence address(es) if stay of present address is less than one year) similarly the office/business addresses :(j) Email id of Subscriber;(k) Phone No. of Subscriber;(l) Fax no. of Subscriber (optional)(m) Proof of Identity: For Indian Nationals:- PAN Card ( mandatory) and any one of the following- Voters identity card- Passport copy- Driving License copy- Unique Identification Number (UIN)(n)For Foreign nationals and Non Resident Indians- Passport- Residential proof such as Bank Statement, Electricity Bill,- Telephone / Mobile Bill: (Provided that Bank statement Electricity bill, Telephone or Mobilebill shall not be more than two months old)(o) Proof of nationality in case the subscriber is a foreign national.(p) If the subscriber is already a director or promoter of a company(s), the particulars relating to-(i) Name of the company;(ii) Corporate Identity Number;(iii) Whether interested as a director or promoter;(q) The specimen signature and latest photograph duly verified by the banker or notary shall be in the prescribed Form No.INC.10.(2) Where the subscriber to the memorandum is a body corporate,Then the following particulars shall be filed with the Registrar-(a) Corporate Identity Number of the Company or Registration number of the body corporate, if any (b) GLN, if any;(c) The name of the body corporate ;(d) The registered office address or principal place of business (f) if the body corporate is a company, certified true copy of the board resolution specifying inter alia the authorization to subscribe to the memorandum of association of the proposed company and to make investment in the proposed company, the number of shares proposed to be subscribed by the body corporate, and the name, address and designation of the person authorized to subscribe to the Memorandum; (g) if the body corporate is a limited liability partnership or partnership firm, certified true copy of the resolution agreed to by all the partners specifying inter alia the authorization to subscribe to the memorandum of association of the proposed company and to make investment in the proposed company, the number of shares proposed to be subscribed in the body corporate, and the name of the partner authorized to subscribe to the Memorandum; (h) the particulars as specified above for subscribers in terms of clause (e) of sub- section (1) of section 7 for the person subscribing for body corporate;(i) in case of foreign bodies corporate, the details relating to-(i) the copy of certificate of incorporation of the foreign body corporate; and(ii) the registered office address. Particulars of first directors:-Section 7(1)(f) states that the particulars of the persons mentioned in the articles as the first directors of the company, their names, including surnames or family names, the Director Identification Number, residential address, nationality and such other particulars including proof of identity as may be prescribed. Section 7(1)(g) states that the particulars of the interests of the persons mentioned in the articles as the first directors of the company in other firms or bodies corporate along with their consent to act as directors of the company in such form and manner as may be prescribed. Rule 17 of Companies (Incorporation) Rules 2014 states that The particulars of each person mentioned in the articles as first director of the company and his interest in other firms or bodies corporate along with his consent to act as director of the company shall be filed in Form No.DIR.12 along with the fee as provided in the Companies (Registration offices and fees) Rules, 2014. As per section 152 (3), no person shall be appointed as a director of a company unless he has been allotted the Director Identification Number under section 154. Section 152(4) provides that every person proposed to be appointed as a director by the company in general meeting or otherwise, shall furnish his Director Identification Number. By virtue of section 153, every individual intending to be appointed as director of a company shall make an application for allotment of Director Identification Number in Form no Dir 3. Any individual who intends to be a director of a company will have to mandatorily apply for DIN first. DIN has to be obtained by the directors of the company before commencing the procedure for incorporation of a company.

Power of Attorney:-

With a view to fulfilling the various formalities that are required for incorporation of a company, the promoters may appoint an attorney empowering him to carry out the instructions/requirements stipulated by the Registrar. This requires execution of a Power of Attorney on a non-judicial stamp paper of a value prescribed in the respective State Stamp Laws.

7. Issue Of Certificate Of Incorporation By Registrar:-

Section 7(2) states that the Registrar on the basis of documents and information filed under sub-section (1) of section 7, shall register all the documents and information referred to in that sub- section in the register and issue a certificate of incorporation in the prescribed form to the effect that the proposed company is incorporated under this Act. From the date of incorporation mentioned in the certificate of incorporation, such subscribers to the memorandum and all other persons, as may, from time to time, become members of the company, shall be a body corporate by the name contained in the memorandum, capable of exercising all the functions of an incorporated company under this Act and having perpetual succession and a common seal with power to acquire, hold and dispose of property, both movable and immovable, tangible and intangible, to contract and to sue and be sued, by the said name. (Section 9). The subscribers would become the members of the company. The company as separate legal entity enables a director, representing the company, to enter into a contract of employment with himself in his individual capacity[footnoteRef:2]. Two companies which are incorporated with the same set of shareholders are nevertheless distinct and separate entities[footnoteRef:3]. A company may also act, as trustee, executor or administrator, provided its constitution, i.e., its Memorandum of Association permits or authorizes the doing of such business. [2: Lee v. Lees Air Farming Ltd., (1961) 31 Com Cases 233, 246, 248, 249: (1960) 3 All ER 420 (PC)] [3: Patinson v.Bindhya Debi, AIR 1933 Pat 196]

Conclusive Evidence:- A Certificate of Incorporation given by the Registrar in respect of any association shall be conclusive evidence that all the requirements of the Act have been complied with in respect of registration and matters precedent and incidental thereto, and that the association is a company authorized to be registered and duly registered under the Act.8. Allottement Of Corporate Identity Number:- Section 7(3) states that on and from the date mentioned in the certificate of incorporation issued under sub-section (2), the Registrar shall allot to the company a corporate identity number, which shall be a distinct identity for the company and which shall also be included in the certificate.Preservation of Documents of incorporation Section 7(4) states that the company shall maintain and preserve at its registered office copies of all documents and information as originally filed under sub-section (1) till its dissolution under this Act.

FormsNameForm No:Date OF Notification

Integrated Incorporation FormForm INC-2901-June-2015

Application for reservation of nameForm INC-104-Jun-2015

One Person Company- Application for IncorporationForm INC-201-June-2015

One Person Company- Nominee consent formForm INC-302-June-2014

Application for Incorporation of Comapny (Other than OPC)Form INC-701-June-2015

Notice of situation or change of situation of registered officeForm INC-2230-May-2015

A new integrated company incorporation form to make compliance and reporting easier and convenient for corporate (INC 29). Name availability, allotment ofDirector Identification Number(DIN), company incorporation and commencement of business will now be possible through a single form.

Procedure for Commencement of Business( Additional research as to Commencement of Buisness):-

Under Companies Act 2013, the date ofincorporation of a companycannot be the date of commencement of business. From the point of commencement of Business companies may be divided into 2 categories:1. Public and Private Companies not having Share Capital2. Public and Private Companies having Share Capital

1. Public and Private Companies not having Share Capital A private company and a public limited company not having share capital are not required to comply with any other formalities and may commence its business activities immediately after obtaining the certificate of incorporation from the concerned Registrar of Companies.

2. Public and Private Companies having Share Capital As per section 11 of Companies Act, 2013, now allnewlyincorporatedPublic and Private Companies having Share Capital would be required to obtain certificateofcommencementofbusinessfrom concerned Registrar of Companies before commencing the business or exercise of borrowing powers.

Position which was under Companies Act, 1956:-

Under the Companies Act, 1956, a private company could start its business immediately upon receiving certificate of incorporation. Private companies were not required to obtain a certificate of commencement of business from concerned Registrar of Companies under section 149 of Companies Act, 1956. As said in Section 149 Which speaks on restriction on commencement of business 149(7) Nothing in this section shall apply to - (a) a private company ;

However as per the latest notification on the MCA website section 11 and rule no. 24 have been removed w.e.f 01-06-2015. Thus it is assumed that a commencement of business certificate is no longer required.

The Companies (Incorporation) Amendment Rules, 2015After the Incorporation Amendment Rules, 2015 there are two routes for incorporating a company. It introduced on integrated form prescribed and notified by MCA INC-29, which covers Issue of DIN, Reservation of name, Incorporation of Company and issue of PAN & TAN at the same time. Now it is not required to fill three different forms DIR-3, INC-1 and INC-7 for incorporation. Some of the key points are: As 3 different approvals are applied for so if any one fails all the others also fail. Also DIN for only 3 Directors can be applied at one time. Only 2 re-submissions are allowed. All attachments which are required to be filed with INC-1, INC-7, INC-22 and DIR-12 are also to be filed with this form. Normal registration fee for each form is Rs. 2000.