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COMPANIES ACT, 2013

BACKGROUNDER

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Introduction

A company comes into existence is generally by a process referredto as incorporation. Once a company has been legally incorporated, itbecomes a distinct entity from those who invest their capital and labourto run the company.

Usually the first step to form a company is the process known as‘promotion’ where a person persuades others to contribute capital to aproposed company before it is incorporated . Such a person is called thepromoter of the company. Promoters also can enter into a contract onbehalf of a company before or after it has been granted a certificate ofincorporation, and arrange share issues in the name of the company.

Section 3 to 22 of the Companies Act, 2013 (herein after called theAct) read with Companies (Incorporation) Rules, 2014 made underChapter II of the Act (herein after called ‘the Rules’) cover the provisionswith regard to incorporation of companies and matters incidentalthereto.

PROMOTERS

1. Definition of the word promoter

Section 2 (69) of the Companies Act, 2013 defines the term‘promoter’ as under:-

“Promoter” means a person—

(a) who has been named as such in a prospectus or is identified bythe company in the annual return referred to in section 92; or

(b) who has control over the affairs of the company, directly orindirectly whether as a shareholder, director or otherwise; or

(c) in accordance with whose advice, directions or instructions theBoard of Directors of the company is accustomed to act.

INCORPORATION OF COMPANIES ANDMATTERS INCIDENTAL THERETO

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Incorporation of Companies and Matters Incidental Thereto2

Provided that sub-clause (c) shall not apply to a person who isacting merely in a professional capacity.

By virtue of above definition, persons in accordance with whoseadvice, directions or instructions the Board of Directors of the companyis accustomed to act are also treated as promoters. However, if a personis merely acting in a professional capacity i.e. giving only professionaladvice to the Board of directors, he shall not be treated as a promoter.

Further, according to SEBI (Issue of Capital and DisclosureRequirements) Regulations, 2009, “promoter” includes:

(i) the person or persons who are in control of the issuer;

(ii) the person or persons who are instrumental in the formulationof a plan or programme pursuant to which specified securitiesare offered to public;

(iii) the person or persons named in the offer document as promoters.

Is a director/officer/employee of the issuer a promoter?

A director/officer/employee who has control over the affairs of thecompany, directly or indirectly whether as a shareholder, director orotherwise is considered as a promoter. As per section 2 (27), control”shall include the right to appoint majority of the directors or to controlthe management or policy decisions exercisable by a person or personsacting individually or in concert, directly or indirectly, including byvirtue of their shareholding or management rights or shareholdersagreements or voting agreements or in any other manner.

However, a director or officer or employee of the issuer or a person,if acting as such merely in his professional capacity, shall not be deemedas a promoter.

But a person may be a promoter even if he has undertaken a lesseractive role in the formation of a company. Any person who becomes adirector, places shares or negotiates preliminary agreements, may becovered by this term. Who constitutes a promoter in a particular case,has to be seen in the light of a clear legislative definition provided undersection 2(69) the Companies Act, 2013. A company may have severalpromoters. A promoter may be a natural person or a company.

It is clear from the foregoing that the word “promoter” is used incommon parlance to denote any individual, corporate, syndicate,association or partnership which has taken all the necessary steps tocreate and mould a company and set it going. The promoter originatesthe scheme for the formation of a company; gets together the subscribers

Incorporation of Companies and Matters Incidental Thereto 3

to the memorandum, gets the Memorandum and Articles prepared,executed and registered, finds the bankers, brokers and legal advisers,finds the first directors, settles the terms of preliminary contracts withvendors and agreement with underwriters, and makes arrangementfor preparation, advertisement and circulation of the prospectus andplacement of the capital. But a person who merely acts in a professionalcapacity on behalf of the promoter, such as a solicitor who draws upan agreement or articles, an accountant or valuer who prepares figuresor valuation on behalf of a promoter, and who is paid for the same, isnot a promoter.

The Companies Act, 2013, contains some provisions regarding theduties of promoters. The fiduciary duties of a promoter are as under:

1. As per section 102, where as a result of the non-disclosure orinsufficient disclosure in any explanatory statement annexed tothe notice of a general meeting , by a promoter, director, manager,if any, or other key managerial personnel, any benefit accrues tosuch promoter, director, manager or other key managerial personnelor their relatives, either directly or indirectly, the promoter, director,manager or other key managerial personnel, as the case may be,shall hold such benefit in trust for the company, and shall, withoutprejudice to any other action being taken against him under thisAct or under any other law for the time being in force, be liable tocompensate the company to the extent of the benefit received byhim.

In the case of default in complying with above provisions, everypromoter, director, manager or other key managerial personnel whois in default shall be punishable with fine which may extend to50,000 rupees or five times the amount of benefit accruing to thepromoter, director, manager or other key managerial personnel orany of his relatives, whichever is more.

The above provision is based on the principle that a promoter cannotmake either directly or indirectly, any profit at the expense of thecompany he promotes, without the knowledge and consent of thecompany and that if he does so, in disregard of this rule, thecompany can compel him to account for it. In relation to disclosureit may be noted that part disclosure will also attract the sameconsequences. A promoter is not forbidden to make profit but he isbarred from making any secret profit. He may make a profit outof promotion with the consent of the company in the same wayas an agent may retain a profit obtained through his agency withhis principal’s consent.


2. A promoter is not allowed to derive a profit from the sale of hisown property to the company unless all material facts are disclosed.If a promoter contracts to sell his own property to the companywithout making a full disclosure, the company may eitherrepudiate the sale or affirm the contract and recover the profit madeout of it by the promoter. Either way the dishonest promoter isdeprived of his advantage.

FORMATION OF A COMPANY

In terms of Section 3(1), a company may be formed for any lawfulpurpose by—

a. seven or more persons, where the company to be formed is tobe a public company;

b. two or more persons, where the company to be formed is to bea private company; or

c. one person, where the company to be formed is to be One PersonCompany that is to say, a private company, by subscribingtheir names or his name to a memorandum and complyingwith the requirements of this Act in respect of registration.

This is done by subscribing to their names or his name to amemorandum and complying with the requirements of this Act inrespect of registration.

(2) A company formed under sub-section (1) may be either—

(a) a company limited by shares; or

(b) a company limited by guarantee; or

(c) an unlimited company.

One Person Company

With the implementation of the Companies Act, 2013, a singleperson could constitute a Company, under the One Person Company(OPC) concept.

The introduction of OPC in the legal system is a move that wouldencourage corporatisation of micro businesses and entrepreneurship.

In India, in the year 2005, the JJ Irani Expert Committeerecommended the formation of OPC. It had suggested that such anentity may be provided with a simpler legal regime through exemptionsso that the small entrepreneur is not compelled to devote considerabletime, energy and resources on complex legal compliance.


As per section 2(62) of the Companies Act, 2013, “One PersonCompany” means a company which has only one person as a member.

The memorandum of One Person Company is required to indicatethe name of the other person, with his prior written consent in theprescribed form, who shall, in the event of the subscriber’s death or hisincapacity to contract become the member of the company and thewritten consent of such person shall be filed with the Registrar at thetime of incorporation of the One Person Company along with itsmemorandum and articles. Such nomination shall be filed in FormNo INC.2 along with consent of such nominee obtained in Form NoINC.3 and fee as provided in the Companies (Registration offices andfees) Rules, 2014. The member of One Person Company may at anytime change the name of such other person by giving notice, changethe name of the person nominated by him at any time for any reasonincluding in case of death or incapacity to contract of nominee andnominate another person after obtaining the prior consent of suchanother person in Form No INC.3.

Similarly. the other person may withdraw his consent by giving anotice in writing to such sole member and to the One Person Company.

The sole member shall nominate another person as nominee withinfifteen days of the receipt of the notice of withdrawal and shall send anintimation of such nomination in writing to the Company, along withthe written consent of such other person so nominated in Form No.INC.3.

The company shall within thirty days of receipt of the notice ofwithdrawal of consent under sub-rule (3) file with the Registrar, a noticeof such withdrawal of consent and the intimation of the name ofanother person nominated by the sole member in Form No INC.4.

Rule 3 of Companies (Incorporation) Rules, 2014 –

One Person Company.-

(1) Only a natural person who is an Indian citizen and resident inIndia-

(a) shall be eligible to incorporate a One Person Company;

(b) shall be a nominee for the sole member of a One PersonCompany.

Explanation.- For the purposes of this rule, the term “resident inIndia” means a person who has stayed in India for a period of


not less than one hundred and eighty two days during theimmediately preceding one calendar year.

(2) No person shall be eligible to incorporate more than a One PersonCompany or become nominee in more than one such company.

(3) Where a natural person, being member in One Person Companyin accordance with this rule becomes a member in another suchCompany by virtue of his being a nominee in that One PersonCompany, such person shall meet the eligibility criteria specifiedin sub rule (2) within a period of one hundred and eighty days.

(4) No minor shall become member or nominee of the One PersonCompany or can hold share with beneficial interest.

(5) Such Company cannot be incorporated or converted into acompany under section 8 of the Act.

(6) Such Company cannot carry out Non-Banking FinancialInvestment activities including investment in securities of anybody corporates.

(7) No such company can convert voluntarily into any kind ofcompany unless two years have expired from the date ofincorporation of One Person Company, except threshold limit(paid up share capital) is increased beyond fifty lakh rupees orits average annual turnover during the relevant period exceedstwo crore rupees.

PROCEDURAL ASPECTS WITH REGARD TOINCORPORATION

1. Application for Availability of Name of company

As per section 4(4) a person may make an application, in suchform and manner and accompanied by such fee, as may be prescribed,to the Registrar for the reservation of a name set out in the applicationas—

(a) the name of the proposed company; or

(b) the name to which the company proposes to change its name.

As per Rule 9 of Companies (incorporation) Rules 2014, anapplication for the reservation of a name shall be made in Form No.INC.1 along with the fee as provided in the Companies (Registrationoffices and fees) Rules, 2014.


According to section 4(2), the name stated in the memorandum ofassociation shall not—

(a) be identical with or resemble too nearly to the name of anexisting company registered under this Act or any previouscompany law; or

(b) be such that its use by the company—

(i) will constitute an offence under any law for the time beingin force; or

(ii) is undesirable in the opinion of the Central Government.

Section 4(3) provides that without prejudice to the provisions of section4(2), a company shall not be registered with a name which contains—

(a) any word or expression which is likely to give the impressionthat the company is in any way connected with, or having thepatronage of, the Central Government, any State Government,or any local authority, corporation or body constituted by theCentral Government or any State Government under any lawfor the time being in force; or

(b) such word or expression, as may be prescribed, unless theprevious approval of the Central Government has been obtainedfor the use of any such word or expression.

Section 4(5)(i) lays down that upon receipt of an application undersub-section (4), the Registrar may, on the basis of information anddocuments furnished along with the application, reserve the name fora period of 60 days from the date of the application.

Rule 8 of Companies(incorporation) Rules, 2014 states that indetermining whether a proposed name is identical with another, thedifferences on account of certain aspects may be disregarded, the detailsof the same is stated in that rule.

2. Preparation of Memorandum and Articles ofAssociation

A. Memorandum of Association

The Memorandum of Association is the charter of a company. It isa document, which amongst other things, defines the area withinwhich the company can operate.

The first step in the formation of a company is to prepare adocument called the memorandum of association. In fact


memorandum is one of the most essential pre-requisites forincorporating any form of company under the Act.

As per section 2(56) “memorandum” means the memorandum ofassociation of a company as originally framed or as altered from timeto time in pursuance of any previous company law or of this Act.

Section 4 of the Act prescribes the particulars to be mentioned in amemorandum of association and other requirements. It is theconstitution document of the company. The company cannot departfrom the provisions of the memorandum. If it enters into a contract orengages in any trade or business which is beyond the powers conferredon it by the memorandum, such a contract or the act will be ultravires (Beyond Powers) the company and hence void.

Section 4(6) of the Companies Act, 2013 provides that thememorandum of association should be in any one of the Forms specifiedin Tables A, B, C, D or E of Schedule I to the Act, as may be applicable inrelation to the type of company proposed to be incorporated or in aForm as near thereto as the circumstances admit.

i. The Form in Table A is applicable in the case of companies limitedby shares;

ii. the Form in Table B is applicable to companies limitedby guarantee not having a share capital;

iii. the Form in Table C is applicable to the companies limitedby guarantee having a share capital;

iv. the Form in Table D is applicable to unlimited companiesnot having a share capital;

v. the Form in Table E is applicable to unlimited companieshaving a share capital.

A company shall adopt any of the model Forms of thememorandum of association mentioned above, as may be applicableto it.

As per Section 4(1), the memorandum of a limited company muststate the following:

(a) the name of the company with “Limited” as its last word inthe case of a public company; and “Private Limited” as its lastwords in the case of a private company;(Name Clause)

(b) the State in which the registered office of the company is to besituated;(Situation Clause)


(c) the objects for which the company is proposed to be incorporatedand any matter considered necessary in furtherancethereof;(objects clause)

Provided that nothing in this clause shall apply to a companyregistered under section 8;

(d) the liability of members of the company, whether limited orunlimited, and also state,—(Liability Clause)

(i) in the case of a company limited by shares, that liability ofits members is limited to the amount unpaid, if any, on theshares held by them; and

(ii) in the case of a company limited by guarantee, the amountup to which each member undertakes to contribute—

(A) to the assets of the company in the event of its beingwound-up while he is a member or within one year afterhe ceases to be a member, for payment of the debts andliabilities of the company or of such debts and liabilitiesas may have been contracted before he ceases to be amember, as the case may be; and

(B) to the costs, charges and expenses of winding-up andfor adjustment of the rights of the contributories amongthemselves;

(e) in the case of a company having a share capital,—(Capital Clause)

(i) the amount of share capital with which thecompany is to be registered and the divisionthereof into shares of a fixed amount and thenumber of shares which the subscribers to thememorandum agree to subscribe which shall notbe less than one share per subscriber; and

(ii) the number of shares each subscriber to thememorandum intends to take, indicated oppositehis name;

(f) in the case of a One Person Company, the name ofthe person who, in the event of the death of thesubscriber, shall become the member of the company.

According to section 4(7), any provision in the memorandum orarticles, in the case of a company limited by guarantee and not having


a share capital, purporting to give any person a right to participate inthe divisible profits of the company otherwise than as a member, shallbe void.

The above clauses are compulsory and are designated as“conditions” prescribed by the Act, on the basis of which a company isincorporated.

It is to be noted that the Companies Act, 2013 shall override theprovisions in the memorandum of a company, if the latter containsanything contrary to the provisions in the Act (Section 6).

Name Clause

A company being a legal entity must have a name of its own toestablish its separate identity. The name of the company is a symbol ofits independent corporate existence. The first clause in the memorandumof association of the company states the name by which a company isto be known. The company may adopt any suitable name provided itis not undesirable.

Publication of Name

The name of the company and the address of its registered officemust be painted or dispalyed outside every office or place at which itsbusiness is carried on, in a conspicuous position and in legible letters inEnglish and in the language in general use in that locality. The namemust also be engraved on the company’s common seal. Further, thename of the company and the address of the registered office and theCorporate Identity Number along with telephone number, fax number,if any, e-mail and website addresses, if any must be mentioned in legiblecharacters in all business letters, in all its bill heads, letter papers and inall its notices and other official publications, as well as in all negotiableinstruments and other prescribed documents (Section 12).

However, where a company has changed its name or names duringthe last two years, it shall paint or display or print, as the case may be,along with its name, the former name or names so changed during thelast two years as required above.

Further in case of One Person Company, the words ‘‘One PersonCompany’’ shall be mentioned in brackets below the name of suchcompany, wherever its name is printed, affixed or engraved.

Ministry of Corporate Affairs (MCA) has clarified that display ofits name in English in addition to the display in the local language willbe a sufficient compliance with the requirements of the section.


Rectification of name of a company (Section 16)

Section 16 provides that if by inadvertence or otherwise a namehas been registered which is identical to or too nearly resembles thename of an existing company whether registered under this Act or theprevious company law, the Central Government may direct thecompany to change its name. The company shall change its namewithin a period of 3 months from the issue of the above direction afterpassing an ordinary resolution for the purpose. The Central Governmentis empowered to direct a company, at any point of time to rectify itsname if by inadvertence it has been registered with a name similar tothat of an existing company. If a company is so directed by the CentralGovernment, it must change the name within 3 months of the directionafter passing an ordinary resolution.

This section also gives enhanced power to the Central Governmentto order rectification of name where such name in its opinion constitutesan infringement of a registered trade mark. The proprietor of theregistered trade mark may make an application to the CentralGovernment for an order for rectification of name because it is identicalto or too nearly resembles the applicant’s registered trade marks. Suchapplication must be made within three years from the date ofincorporation or the registration or change of name whether underthis Act or previous company law. In such a case the CentralGovernment may direct the company to change its name and thecompany shall change its name, within a period of six months fromthe issue of such direction, after passing an ordinary resolution for thepurpose.

Where a company changes its name or obtains a new name, itshall within a period of fifteen days from the date of such change, givenotice of the change to the Registrar along with the order of the CentralGovernment, who shall carry out necessary changes in the certificateof incorporation and the memorandum.

Section 5(1) states that the articles of a company shall contain theregulations for management of the company.

Situation Clause

The name of the State in which the registered office of the companyis to be situated must be given in the memorandum. But the exactaddress of the registered office is not required to be stated therein. Within15 days of its incorporation, and at all times thereafter, the companymust have a registered office to which all communications and noticesmay be sent. The company must also furnish to the Registrar


verification of its registered office within a period of thirty days of itsincorporation in such manner as may be prescribed.

Section 12(3) states that (3) every company shall—

(a) paint or affix its name, and the address of its registered office,and keep the same painted or affixed, on the outside of everyoffice or place in which its business is carried on, in a conspicuousposition, in legible letters, and if the characters employed thereforare not those of the language or of one of the languages ingeneral use in that locality, also in the characters of thatlanguage or of one of those languages;

(b) have its name engraved in legible characters on its seal;

(c) get its name, address of its registered office and the CorporateIdentity Number along with telephone number, fax number, ifany, e-mail and website addresses, if any, printed in all itsbusiness letters, billheads, letter papers and in all its notices andother official publications; and

(d) have its name printed on hundies, promissory notes, bills ofexchange and such other documents as may be prescribed:

Provided that where a company has changed its name or namesduring the last two years, it shall paint or affix or print, as the casemay be, along with its name, the former name or names so changedduring the last two years as required under clauses (a) and (c).

Objects Clause

The third compulsory clause in the memorandum sets out theobjects for which the company has been formed. Under section 4(1)(c)of the Companies Act, 2013, all companies must state in theirmemorandum the objects for which the company is proposed to beincorporated and any matter considered necessary in furtherancethereof.

The objects clause is of great importance because it determines thepurpose and the capacity of the company. It indicates the purpose forwhich the company has been set up and its actual capability, besidesits sphere of activities. It states affirmatively the ambit and extent ofpowers of the company and, stated negatively, that nothing should bedone beyond that ambit and that no attempt shall be made to use thecompany for any other purpose than that which is specified. Thepurpose of the objects clause is to enable the persons dealing with thecompany to know its permitted range of activities. The acts beyond


this ambit are ultra vires and hence void. Even the entire body ofshareholders cannot ratify such acts.

Liability Clause

The fourth compulsory clause must state that liability of themembers is limited, if it is intended that the company be limited byshares or by guarantee. The effect of this clause is that, in a companylimited by shares, no member can be called upon to pay more thanwhat remains unpaid on the shares held by him.

In a company limited by guarantee, the liability clause will statethe amount which each member should undertake to contribute tothe assets of the company in the event of liquidation of the company.He cannot be called upon to pay anything before the company goesinto liquidation.

This is the fifth compulsory clause which must state the amountof the capital with which the company is registered, unless thecompany is an unlimited liability company. The shares into which thecapital is divided must be of fixed value, which is commonly knownas the nominal value of the share. The capital is variously described as“nominal”, “authorised” or “registered”.

The amount of nominal capital is determined having regard to thepresent as well as future requirements of the company with referenceto its objects. The usual way to state the capital in the memorandumis: “The capital of the company is Rs. 10,00,000 divided into 1,00,000equity shares of ` 10 each”. This amount lays down the maximumlimit beyond which the company cannot issue shares without alteringthe memorandum as provided by Section 61 of the Companies Act,2013.

If there are both equity and preference shares, then the division ofthe capital is to be shown under these two heads. A company is notauthorised to issue capital beyond its authorised/nominal/registeredcapital. If it receives applications for shares beyond the shares coveredby the authorised capital, the amount received on excess number ofshares should be returned.

Out of the issued capital, the total amount actually subscribed oragreed to be subscribed is known as subscribed capital, and thissubscribed capital again may be wholly paid or partly paid, in whichlatter case the balance would be payable on future calls when made.The amount actually paid by the shareholders is called the paid-upcapital.


According to Section 60 of the Act, if the amount of the authorisedcapital (nominal capital), of the company is stated in any notice,advertisement, official publication, business letter, bill head or letterpaper, it shall also contain a statement in an equally prominent positionand in equally conspicuous terms the amount of capital which hasbeen subscribed and the amount paid-up.

Declaration for Subscription

The subscribers to the memorandum declare: “We, the severalpersons whose names and addresses are subscribed below, are desirousof being formed into a company in pursuance of this memorandum ofassociation, and we respectively agree to take the number of shares inthe capital of the company set opposite our respective names”. Thenfollow the names, addresses, description, occupations of the subscribers,and the number of shares each subscriber has agreed to take and theirsignatures attested by a witness.(Refer to INC 13 of Companies(Incorporation) Rules 2013)

The statutory requirements regarding subscription of memorandumare that:

— each subscriber must take at least one share;

— each subscriber must write opposite his name the number ofshares which he agrees to take. [Section 4(1)(e))]

Signing of Memorandum

Rule 13 Companies (Incorporation) Rules, 2014

The Memorandum and Articles of Association of the company shallbe signed in the following manner, namely:-

(1) The memorandum and articles of association of the companyshall be signed by each subscriber to the memorandum, whoshall add his name, address, description and occupation, if any,in the presence of at least one witness who shall attest thesignature and shall likewise sign and add his name, address,description and occupation, if any and the witness shall statethat “I witness to subscriber/subscriber(s), who has/havesubscribed and signed in my presence (date and place to begiven); further I have verified his or their Identity Details (ID)for their identification and satisfied myself of his/her/theiridentification particulars as filled in”.

(2) Where a subscriber to the memorandum is illiterate, he shallaffix his thumb impression or mark which shall be described as


such by the person, writing for him, who shall place the nameof the subscriber against or below the mark and authenticateit by his own signature and he shall also write against the nameof the subscriber, the number of shares taken by him.

(3) Such person shall also read and explain the contents of thememorandum and articles of association to the subscriber andmake an endorsement to that effect on the memorandum andarticles of association.

(4) Where the subscriber to the memorandum is a body corporate,the memorandum and articles of association shall be signed bydirector, officer or employee of the body corporate dulyauthorized in this behalf by a resolution of the board of directorsof the body corporate and where the subscriber is a LimitedLiability Partnership, it shall be signed by a partner of theLimited 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 andarticles of Association.

(5) Where subscriber to the memorandum is a foreign nationalresiding outside India-

(a) in a country in any part of the Commonwealth, hissignatures and address on the memorandum and articles ofassociation 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 ApostilleConvention, 1961, his signatures and address on thememorandum and articles of association and proof ofidentity shall be notarized before the Notary (Public) of thecountry of his origin and be duly apostillised in accordancewith the said Hague Convention.

(c) in a country outside the Commonwealth and which is nota party to the Hague Apostille Convention, 1961, hissignatures and address on the memorandum and articles ofassociation and proof of identity, shall be notarized beforethe Notary (Public) of such country and the certificateof the Notary (Public) shall be authenticated by aDiplomatic or Consular Officer empowered in this behalfunder section 3 of the Diplomatic and Consular Officers


(Oaths and Fees) Act, 1948 (40 of 1948) or, where there isno such officer by any of the officials mentioned in section6 of the Commissioners of Oaths Act, 1889 (52 and 53Vic.C.10), or in any Act amending the same;

(d) visited in India and intended to incorporate a company, insuch case the incorporation shall be allowed if, he/she ishaving a valid Business Visa.

Explanation.- For the purposes of this clause, it is hereby clarifiedthat, in case of Person is of Indian Origin or Overseas Citizen of India,requirement of business Visa shall not be applicable.

B. Articles of Association

According to Section 2(5) of the Companies Act, 2013, ‘articles’means the articles of association of a company as originally framed oras altered from time to time or applied in pursuance of any previouscompany law or of this Act. The articles of a company shall be inrespective forms specified in Tables, F, G, H, I and J in Schedule I as maybe applicable to such company.

i. The Form in Table F is applicable in the case of companies limitedby shares;

ii. the Form in Table G is applicable to companies limited byguarantee having a share capital;

iii. the Form in Table H is applicable to the companies limited byguarantee not having a share capital;

iv. the Form in Table I is applicable to unlimited companies havinga share capital;

v. the Form in Table J is applicable to unlimited companies nothaving share capital.

In terms of section 5(1), the articles of a company shall containthe regulations for management of the company. The articles ofassociation of a company are its bye-laws or rules and regulationsthat govern the management of its internal affairs and the conduct ofits business. The articles play a very important role in the affairs of acompany. It deals with the rights of the members of the companyinter se. They are subordinate to and are controlled by the memorandumof association.

The memorandum lays down the scope and powers of the company,and the articles govern the ways in which the objects of the company


are to be carried out and can be framed and altered by the members.But they must keep within the limits marked out by the memorandumand the Companies Act.

Section 5(2) provides that the articles shall also contain suchmatters, as may be prescribed. However, nothing prescribed in this sub-section shall be deemed to prevent a company from including suchadditional matters in its articles as may be considered necessary for itsmanagement.

A company may adopt all or any of the regulations contained inthe model articles applicable to such company. [Section 5(7)]

Section 5(8) provides that in case of any company, which isregistered after the commencement of Companies Act 2013, in so faras the registered articles of such company do not exclude or modifythe regulations contained in the model articles applicable to suchcompany, those regulations shall, so far as applicable, be the regulationsof that company in the same manner and to the extent as if they werecontained in the duly registered articles of the company.

Therefore in terms of Section 5 of the Companies Act, 2013 a publiccompany limited by shares may at its option register its articles ofassociation signed by the same subscribers as to the memorandum, oralternatively it may adopt all or any of the regulations contained inTable F of First Schedule of the Act. If articles are not registered,automatically Table F in Schedule I apply, and if registered, Table F inSchedule I apply except in so far as it is excluded or modified by thearticles. To avoid any confusion, normally every public companydelivers its articles alongwith the memorandum for registration. Furtherit will be specifically stated therein that Table ‘F’ will not apply. Thearticles of a private company must contain the three restrictions ascontained in Section 2(68).

However nothing in section 5 shall apply to the articles of acompany registered under any previous company law unless amendedunder this Act [Section 5(9)].

Entrenchment Provisions

The articles may contain provisions for entrenchment to the effectthat specified provisions of the articles may be altered only if conditionsor procedures that are more restrictive than those applicable in thecase of a special resolution, are met or complied with. [Section 5 (3)]

The Companies Act, 2013 recognizes an interesting concept ofentrenchment. Essentially, the entrenchment provisions allow for


certain clauses in the articles to be amended upon satisfaction of certainconditions or restrictions (such as obtaining a 100% consent) greaterthan those prescribed under the Act. This provision acts as a protectionto the minority shareholders and is of specific interest to the investmentcommunity. This shall empower the enforcement of any pre-agreedrights and provide greater certainty to investors, especially in jointventures.

The provisions for entrenchment referred to in section 5(3) shall bemade either on formation of a company, or by an amendment in thearticles agreed to by all the members of the company in the case of aprivate company and by a special resolution in the case of a publiccompany. [Section 5 (4)]

Where the articles contain provisions for entrenchment, whethermade on formation or by amendment, the company shall give noticeto the Registrar of such provisions in such form and manner as maybe prescribed. [Section 5 (5)]

Contents of Articles

The articles set out the rules and regulations framed by the companyfor its own working. The articles should contain generally the followingmatters:

1. Exclusion wholly or in part of Table F.

2. Adoption of preliminary contracts.

3. Number and value of shares.

4. Issue of preference shares.

5. Allotment of shares.

6. Calls on shares.

7. Lien on shares.

8. Transfer and transmission of shares.

9. Nomination.

10. Forfeiture of shares.

11. Alteration of capital.

12. Buy back.

13. Share certificates.

14. Dematerialisation.

15. Conversion of shares into stock.


16. Voting rights and proxies.17. Meetings and rules regarding committees.18. Directors, their appointment and delegations of powers.19. Nominee directors.20. Issue of Debentures and stocks.21. Audit committee.22. Managing director, Whole-time director, Manager, Secretary.23. Additional directors.24. Seal.25. Remuneration of directors.26. General meetings.27. Directors meetings.28. Borrowing powers.29. Dividends and reserves.30. Accounts and audit.31. Winding up.32. Indemnity.33. Capitalisation of reserves.

Utmost caution must be exercised in the preparation of the articlesof association of a company. At the same time, certain provisions ofthe Act are applicable to the company “notwithstanding anything tothe contrary in the articles”. Therefore, the articles must containprovisions in respect of all matters which are required to be containedtherein so as not to hamper the working of the company later.

Act to over-ride Memorandum and Articles

Section 6 of the Companies Act, 2013 provides that:-

(a) the provisions of this Act shall have effect notwithstandinganything to the contrary contained in the memorandum orarticles of a company, or in any agreement executed by it, or inany resolution passed by the company in general meeting orby its Board of Directors, whether the same be registered,executed or passed, as the case may be, before or after thecommencement of this Act; and

(b) any provision contained in the memorandum, articles,agreement or resolution shall, to the extent to which it isrepugnant to the provisions of this Act, become or be void, asthe case may be.


3. Filing of documents

Section 7(1) that the following documents and information forregistration shall be filed with the Registrar within whose jurisdictionthe registered office of a company is proposed to be situated:

Memorandum and Articles of Association of the company duly signed

Section 7(1)(a) states that the memorandum and articles of thecompany duly signed by all the subscribers to the memorandum insuch manner as may be prescribed;

Rule 13 of Companies (Incorporation) Rules 2014 states that

The Memorandum and Articles of Association of the company shallbe signed in the following manner, namely:-

(1) The memorandum and articles of association of the companyshall be signed by each subscriber to the memorandum, whoshall add his name, address, description and occupation, if any,in the presence of at least one witness who shall attest thesignature and shall likewise sign and add his name, address,description and occupation, if any and the witness shall statethat “I witness to subscriber/subscriber(s), who has/havesubscribed and signed in my presence (date and place to begiven); further I have verified his or their Identity Details (ID)for their identification and satisfied myself of his/her/theiridentification particulars as filled in”

(2) Where a subscriber to the memorandum is illiterate, he shallaffix his thumb impression or mark which shall be described assuch by the person, writing for him, who shall place the nameof the subscriber against or below the mark and authenticateit by his own signature and he shall also write against the nameof the subscriber, the number of shares taken by him.

(3) Such person shall also read and explain the contents of thememorandum and articles of association to the subscriber andmake an endorsement to that effect on the memorandum andarticles of association.

(4) Where the subscriber to the memorandum is a body corporate,the memorandum and articles of association shall be signed bydirector, officer or employee of the body corporate dulyauthorized in this behalf by a resolution of the board of directorsof the body corporate and where the subscriber is a LimitedLiability 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 andarticles of Association.

(5) Where subscriber to the memorandum is a foreign nationalresiding outside India-

(a) in a country in any part of the Commonwealth, hissignatures and address on the memorandum and articles ofassociation 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 ApostilleConvention, 1961, his signatures and address on thememorandum and articles of association and proof ofidentity shall be notarized before the Notary (Public) of thecountry of his origin and be duly apostillised in accordancewith the said Hague Convention.

(c) in a country outside the Commonwealth and which is nota party to the Hague Apostille Convention, 1961, hissignatures and address on the memorandum and articles ofassociation and proof of identity, shall be notarized beforethe Notary (Public) of such country and the certificate ofthe Notary (Public) shall be authenticated by a Diplomaticor Consular Officer empowered in this behalf under section3 of the Diplomatic and Consular Officers (Oaths and Fees)Act, 1948 (40 of 1948) or, where there is no such officer byany of the officials mentioned in section 6 of theCommissioners 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, insuch case the incorporation shall be allowed if, he/she ishaving a valid Business Visa.

Explanation.- For the purposes of this clause, it is hereby clarifiedthat, in case of Person is of Indian Origin or Overseas Citizen of India,requirement of business Visa shall not be applicable.

Declaration from the professional

Section 7(1)((b) states that a declaration in the prescribed form byan advocate, a chartered accountant, cost accountant or companysecretary in practice, who is engaged in the formation of the company,


and by a person named in the articles as a director, manager or secretaryof the company, that all the requirements of this Act and the rulesmade thereunder in respect of registration and matters precedent orincidental thereto have been complied with;

Rule 14 of The Companies (Incorporation) Rules 2014 states thatfor the purposes of clause (b) of sub-section (1) of section 7, thedeclaration by an advocate, a Chartered Accountant, Cost accountantor Company Secretary in practice shall be in Form No. INC.8.

Explanation (i) “chartered accountant” means a charteredaccountant as defined in clause (b) of sub section 1 of section 2 of theChartered Accountants Act, 1949 (ii) “Cost Accountant” means a costaccountant as defined in clause (b) of sub-section (1) of section 2 of theCost and Works Accountants Act, 1959 and (iii) “company secretary”means a “company secretary” or “secretary” means as defined inclause (c) of sub-section (1) of section 2 of the Company SecretariesAct, 1980.

Affidavit from the subscribers to the Memorandum

Section 7(1)(c) states that an affidavit from each of the subscribersto the memorandum and from persons named as the first directors, ifany, in the articles that he is not convicted of any offence in connectionwith the promotion, formation or management of any company, orthat he has not been found guilty of any fraud or misfeasance or ofany breach of duty to any company under this Act or any previouscompany law during the preceding five years and that all thedocuments filed with the Registrar for registration of the companycontain information that is correct and complete and true to the bestof 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, theaffidavit shall be submitted by each of the subscribers to thememorandum and each of the first directors named in the articles inForm 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 ofits incorporation and at all times thereafter, have a registered officecapable of receiving and acknowledging all communications andnotices as may be addressed to it. The company can furnish to theregistrar verification of registered office with in 30 days of incorporationin the manner prescribed. As per rule 25(1) of Companies


(Incorporation) Rules 2014, the verification of registered office shall befiled in Form no INC 22.

Where the location of the registered office is finalised prior toIncorporation of a company by the promoters, the promoters can alsofile along with the Memorandum and Articles, the verification of itsRegistered office in Form no INC 22.

Particulars of subscribers

Section 7(1)(e) states that the particulars of name, includingsurname or family name, residential address, nationality and such otherparticulars of every subscriber to the memorandum along with proofof identity, as may be prescribed, and in the case of a subscriber being abody corporate, such particulars as may be prescribed;

Rule 16 of Companies (Incorporation) Rules states that

Particulars of every subscriber to be filed with the Registrar at thetime of incorporation.

(1) The following particulars of every subscriber to the memorandumshall be filed with the Registrar-

(a) Name (including surname or family name) and recentPhotograph affixed and scan with MOA and AOA:

(b) Father’s/Mother’s/ 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 (Timesince residing at present address and address of previous residenceaddress (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)


Explanation.- information related to (i) to (l) shall be of the individualsubscriber and not of the professional engaged in the incorporationof the company;

(m) Proof of Identity:

For Indian Nationals:

PAN Card ( mandatory) and any one of the following

Voter’s identity card

Passport copy

Driving License copy

Unique Identification Number (UIN)

For Foreign nationals and Non Resident Indians

Passport

(n) 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 acompany(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 bythe 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 Registrationnumber 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;


(e) E-mail Id;

(f) if the body corporate is a company, certified true copy of theboard resolution specifying inter alia the authorization tosubscribe to the memorandum of association of the proposedcompany and to make investment in the proposed company,the number of shares proposed to be subscribed by the bodycorporate, and the name, address and designation of the personauthorized to subscribe to the Memorandum;

(g) if the body corporate is a limited liability partnership orpartnership firm, certified true copy of the resolution agreed toby all the partners specifying inter alia the authorization tosubscribe to the memorandum of association of the proposedcompany and to make investment in the proposed company,the number of shares proposed to be subscribed in the bodycorporate, and the name of the partner authorized to subscribeto the Memorandum;

(h) the particulars as specified above for subscribers in terms ofclause (e) of sub- section (1) of section 7 for the person subscribingfor body corporate;

(i) in case of foreign bodies corporate, the details relating to-

(i) the copy of certificate of incorporation of the foreign bodycorporate; and

(ii) the registered office address.

Particulars of first directors

Section 7(1)(f) states that the particulars of the persons mentionedin the articles as the first directors of the company, their names,including surnames or family names, the Director IdentificationNumber, residential address, nationality and such other particularsincluding proof of identity as may be prescribed. Section 7(1)(g) statesthat the particulars of the interests of the persons mentioned in thearticles as the first directors of the company in other firms or bodiescorporate along with their consent to act as directors of the companyin 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 firstdirector of the company and his interest in other firms or bodiescorporate along with his consent to act as director of the companyshall be filed in Form No.DIR.12 along with the fee as provided in theCompanies (Registration offices and fees) Rules, 2014.


As per section 152 (3), no person shall be appointed as a director ofa company unless he has been allotted the Director IdentificationNumber under section 154. Section 152(4) provides that every personproposed to be appointed as a director by the company in generalmeeting or otherwise, shall furnish his Director Identification Number.By virtue of section 153, every individual intending to be appointed asdirector of a company shall make an application for allotment ofDirector Identification Number in Form no Dir 3. Any individual whointends to be a director of a company will have to mandatorily applyfor DIN first. DIN has to be obtained by the directors of the companybefore commencing the procedure for incorporation of a company.

Power of Attorney

With a view to fulfilling the various formalities that are requiredfor incorporation of a company, the promoters may appoint anattorney empowering him to carry out the instructions/requirementsstipulated by the Registrar. This requires execution of a Power ofAttorney on a non-judicial stamp paper of a value prescribed in therespective State Stamp Laws.

4. Issue of Certificate of Incorporation by Registrar

Section 7(2) states that the Registrar on the basis of documentsand information filed under sub-section (1) of section 7, shall registerall the documents and information referred to in that sub- section inthe register and issue a certificate of incorporation in the prescribedform to the effect that the proposed company is incorporated underthis Act.

From the date of incorporation mentioned in the certificate ofincorporation, such subscribers to the memorandum and all otherpersons, 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 companyunder this Act and having perpetual succession and a common sealwith power to acquire, hold and dispose of property, both movable andimmovable, tangible and intangible, to contract and to sue and besued, by the said name. (Section 9). The subscribers would become themembers of the company.

The company as separate legal entity enables a director, representingthe company, to enter into a contract of employment with himself inhis individual capacity [Lee v. Lee’s Air Farming Ltd., (1961) 31 ComCases 233, 246, 248, 249: (1960) 3 All ER 420 (PC)]. Two companieswhich are incorporated with the same set of shareholders are


nevertheless distinct and separate entities. [Patinson v. Bindhya Debi,AIR 1933 Pat 196].

A company may also act, as trustee, executor or administrator,provided its constitution, i.e., its Memorandum of Association permitsor authorises the doing of such business.

Conclusive Evidence

A Certificate of Incorporation given by the Registrar in respect ofany association shall be conclusive evidence that all the requirementsof the Act have been complied with in respect of registration andmatters precedent and incidental thereto, and that the association is acompany authorised to be registered and duly registered under the Act.

5. Allotment of Corporate identity number

Section 7(3) states that on and from the date mentioned in thecertificate of incorporation issued under sub-section (2), the Registrarshall allot to the company a corporate identity number, which shall bea distinct identity for the company and which shall also be included inthe certificate.

Preservation of Documents of incorporation

Section 7(4) states that the company shall maintain and preserveat its registered office copies of all documents and information asoriginally filed under sub-section (1) till its dissolution under this Act.

PUNISHMENT FOR FURNISHING FALSE OR INCORRECTINFORMATION AT THE TIME OF INCORPORATION

The Companies Act, 2013 imposes severe punsihment forincorporation of a company by furnishing false or incorrectinformation. The persons furnishing false or incorrect information shallbe liable for following punishment:-

(i) If any person furnishes any false or incorrect particulars of anyinformation or suppresses any material information, of whichhe is aware in any of the documents filed with the Registrar inrelation to the registration of a company, he shall be punishablefor fraud under section 447. [Section 7(5)]

(ii) Without prejudice to the above liability, where, at any timeafter the incorporation of a company, it is proved that thecompany has been got incorporated by furnishing any false orincorrect information or representation or by suppressing anymaterial fact or information in any of the documents or


declaration filed or made for incorporating such company, orby any fraudulent action, the promoters, the persons named asthe first directors of the company and the persons makingdeclaration under section 7(1)(b) shall each be punishable forfraud under section 447. [Section 7(6)]

Powers of the Tribunal in case of Incorporation of a Company by furnishingfalse or incorrect information

As per Section 7(7), where a company has been got incorporatedby furnishing any false or incorrect information or representation orby suppressing any material fact or information in any of thedocuments or declaration filed or made for incorporating such companyor by any fraudulent action, the Tribunal may, on an application madeto it, on being satisfied that the situation so warrants:-

(a) pass such orders, as it may think fit, for regulation of themanagement of the company including changes, if any, in itsmemorandum and articles, in public interest or in the interestof the company and its members and creditors; or

(b) direct that liability of the members shall be unlimited; or

(c) direct removal of the name of the company from the register ofcompanies; or

(d) pass an order for the winding up of the company; or

(e) pass such other orders as it may deem fit.

Provided that before making any order under this sub-section,—

(i) the company shall be given a reasonable opportunity of beingheard in the matter; and

(ii) the Tribunal shall take into consideration the transactionsentered into by the company, including the obligations, if any,contracted or payment of any liability.

PROVISIONS SPECIFICALLY RELATING TO INCORPORATIONOF COMPANIES WITH CHARITABLE OBJECTS UNDERSECTION 8

Rule 19-20 of Companies (Incorporation) Rules, 2014

Rule 19. License under section 8 for new companies with charitableobjects etc.-

(1) A person or an association of persons (hereinafter referred to in

1 Section 7(7) is yet to be notified.


this rule as “the proposed company”), desirous of incorporatinga company with limited liability under sub-section (1) ofsection 8 without the addition to its name of the word“Limited”, or as the case may be, the words “Private Limited”,shall make an application in Form No.INC.12 along with thefee as provided in the Companies (Registration offices and fees)Rules, 2014 to the Registrar for a license under sub-section (1)of section 8.

(2) The memorandum of association of the proposed company shallbe in Form No.INC.13.

(3) The application under sub-rule (1) shall be accompanied by thefollowing documents, namely:—

(a) the draft memorandum and articles of association of theproposed company;

(b) the declaration in Form No.INC.14 by an Advocate, aChartered Accountant, Cost Accountant or CompanySecretary in practice, that the draft memorandum andarticles of association have been drawn up in conformitywith the provisions of section 8 and rules made thereunderand that all the requirements of the Act and the rules madethereunder relating to registration of the company undersection 8 and matters incidental or supplemental theretohave been complied with;

(c) an estimate of the future annual income and expenditureof the company for next three years, specifying the sourcesof the income and the objects of the expenditure;

(d) the declaration by each of the persons making the applicationin Form No. INC.15.

Rule 20 -License for existing companies.-

(1) A limited company registered under this Act or under anyprevious company law, with any of the objects specified in clause(a) of sub-section (1) of section 8 and the restrictions andprohibitions as mentioned respectively in clause (b) and (c) ofthat sub-section, and which is desirous of being registered undersection 8, without the addition to its name of the word“Limited” or as the case may be, the words “Private Limited”,shall make an application in Form No.INC.12 along with thefee as provided in the Companies (Registration offices and fees)Rules, 2014 to the Registrar for a licence under sub-section (5)of section 8.


(2) The application under sub-rule (1), shall be accompanied bythe following documents, namely:-

(a) the memorandum and articles of association of thecompany;

(b) the declaration as given in Form No.INC.14 by an Advocate,a Chartered accountant, Cost Accountant or CompanySecretary in Practice, that the memorandum and articlesof association have been drawn up in conformity with theprovisions of section 8 and rules made thereunder and thatall the requirements of the Act and the rules made thereunderrelating to registration of the company under section 8and matters incidental or supplemental thereto have beencomplied with;

(c) for each of the two financial years immediately precedingthe date of the application, or when the company hasfunctioned only for one financial year, for such year (i) thefinancial statements, (ii) the Board’s reports, and (iii) theaudit reports, relating to existing companies;

(d) a statement showing in detail the assets (with the valuesthereof), and the liabilities of the company, as on the date ofthe application or within thirty days preceding that date;

(e) an estimate of the future annual income and expenditureof the company for next three years, specifying the sourcesof the income and the objects of the expenditure;

(f) the certified copy of the resolutions passed in general/ boardmeetings approving registration of the company undersection 8; and

(g) a declaration by each of the persons making the applicationin Form No.INC.15.

(3) The company shall, within a week from the date of makingthe application to the Registrar, publish a notice at his ownexpense, and a copy of the notice, as published, shall be sentforthwith to the Registrar and the said notice shall be in FormNo. INC.26 and shall be published-

(a) at least once in a vernacular newspaper in the principalvernacular language of the district in which the registeredoffice of the proposed company is to be situated or is situated,and circulating in that district, and at least once in English


language in an English newspaper circulating in thatdistrict; and

(b) on the websites as may be notified by the CentralGovernment.

(4) The Registrar may require the applicant to furnish the approvalor concurrence of any appropriate authority, regulatory body,department or Ministry of the Central Government or the StateGovernment(s).

(5) The Registrar shall, after considering the objections, if any,received by it within thirty days from the date of publicationof notice, and after consulting any authority, regulatory body,Department or Ministry of the Central Government or the StateGovernment(s), as it may, in its discretion, decide whether thelicense should or should not be granted.

(6) The licence shall be in Form No.INC.16. or Form No.INC.17, asthe case may be, and the Registrar shall have power to includein the licence such other conditions as may be deemed necessaryby him.

(7) The Registrar may direct the company to insert in itsmemorandum, or in its articles, or partly in one and partly inthe other, such conditions of the license as may be specified bythe Registrar in this behalf.

ALTERATION OF MEMORANDUM OF ASSOCIATION

Section 13(1) of the Companies Act, 2013 provides that save asprovided in section 61 (Dealing with power of limited company toalter its share capital), a company may, by a special resolution andafter complying with the procedure specified in this section, alter theprovisions of its memorandum. The memorandum of association of acompany may be altered in the following respects:

(1) By changing its name [Sections 13(2)].

(2) By altering it in regard to the State in which the registered officeis to be situated [Section 13(4) & (7)].

(3) By altering its objects [Section 13 (1) & (9).

(4) By altering its share capital (Section 61).

(5) By re-organising its share capital (Sections 230 to 237).

(6) By reducing its capital (Section 66).


The provisions or conditions of the memorandum of associationrelating to the name clause, registered office clause, the objects clause,limited liability clause, subscriber’s share clause as provided in Section4 of the Companies Act, 2013 or any other specific provisions containedtherein, can be altered by following the prescribed procedure laid downin the Act. Strict compliance of the prescribed procedure is demandedby law. Failure to comply with the express provisions made under theAct for the purpose of alteration of the provisions or conditionscontained in the memorandum will be deemed as a nullity.

Further section 13(6) provides that a company shall, in relation toany alteration of its memorandum, file with the Registrar the specialresolution passed by the company under section 13(1).

Section 13(10) provides that no alteration made under this sectionshall have any effect until it has been registered in accordance with theprovisions of the said section.

Further, any alteration of the memorandum, in the case of acompany limited by guarantee and not having a share capital,purporting to give any person a right to participate in the divisibleprofits of the company otherwise than as a member, shall be void.[Section 13 (11)]

The procedure for the alteration of the compulsory clauses orconditions of the memorandum is discussed in detail in the followingparagraphs.

Alteration of Name Clause

The name of the company can be altered by a special resolutionand with the approval of the Central Government in writing. Approvalof the Central Government is not necessary if the change relates to theaddition/deletion of the word ‘Private’ to the name of the companyconsequent to the conversion of a private company into a publiccompany and vice versa. [Section 13(1) & (2)]

When any change in the name of a company is made under section13(2), the Registrar shall enter the new name in the register ofcompanies in place of the old name and issue a fresh certificate ofincorporation with the new name and the change in the name shall becomplete and effective only on the issue of such a certificate [ Section13(3)].

A company shall, in relation to any alteration of its name clause inthe memorandum, file with the Registrar the special resolution passedby it in e-form no. 23 and also the approval of the Central Governmentunder section 13(2) sanctioning the change of name. [Section 13(6)].


Under Section 16 of the Act, rectification of the name of thecompany is required to be carried out if, through inadvertence orotherwise, a company (whether on its first registration or on itsregistration by a new name) is registered by a name which is identicalto or too nearly resembles the name of a company already in existence.The rectification of the name must also be carried out if the CentralGovernment so directs at any point of time after the registration of thecompany. The direction of the Central Government is required to becomplied with by the company within a period of 3 months from thedate of issue thereof. Further where a company changes its name orobtains a new name under section 16 (1), it shall within a period offifteen days from the date of such change, give notice of the change tothe Registrar along with the order of the Central Government, whoshall carry out necessary changes in the certificate of incorporationand the memorandum. Any default in complying with the directionissued by the Central Government would render the company liablefor punishment with fine which may extend to one thousand rupeesfor every day during which default continues and its officers in defaultshall be liable for fine which shall not be less than five thousand rupeesbut which may extend to one lakh rupees.

Rule 29 of Companies(incorporation) Rules 2014 states that

(1) The change of name shall not be allowed to a company whichhas defaulted in filing its annual returns or financial statementsor any document due for filing with the Registrar or which hasdefaulted in repayment of matured deposits or debentures orinterest on deposits or debentures.

(2) An application shall be filed in Form No.INC.24 along with thefee for change in the name of the company and a new certificateof incorporation in Form No.INC.25 shall be issued to thecompany consequent upon change of name.

Name change requirement under Clause 32 of ListingAgreement

If the company has changed its name suggesting any new line ofbusiness, it shall disclose the net sales or income, expenditure and netprofit or loss after tax figures pertaining to the said new line of businessseparately in the financial results and shall continue to make suchdisclosures for the three years succeeding the date of change in name.

Further, all listed companies which decide to change their namesshall be required to comply with the following conditions:

1. A time period of atleast 1 year should have elapsed from thelast name change.


2. At least 50% of its total revenue in the preceding 1 year periodshould have been accounted for by the new activity suggestedby the new name, or, the amount invested in the new activity/project (Fixed Assets + Advances + Work in Progress) is at least50% of the assets of the company. The ‘advances’ shall includeonly those extended to contractors and suppliers towardsexecution of project, specific to new activity as reflected in thenew name. To confirm the compliance, the company wouldhave to submit auditor’s certificate to the stock exchange.

3. The new name along with the old name shall be disclosedthrough the web sites of the respective stock exchange/s wherethe company is listed for a continuous period of one year, fromthe date of the last name change.

Effect of Change

The change of name shall not affect any rights or obligations ofthe company, or render defective any legal proceedings by or against it,and any legal proceedings which might have been continued orcommenced by or against the company in its former name may becontinued by or against the company in its new name.

Alteration of Registered Office Clause

(a) Change within the local limits of same town

Section 12(5) of the Act provides that except on the authority of aspecial resolution passed by a company, the registered office of thecompany shall not be changed,—

(a) in the case of an existing company, outside the local limits ofany city, town or village where such office is situated at thecommencement of this Act or whereit may be situated later byvirtue of a special resolution passed by the company; and

(b) in the case of any other company, outside the local limits ofany city, town or village where such office is first situated orwhere it may be situated later by virtue of a special resolutionpassed by the company:

No company shall change the place of its registered office fromthen jurisdiction of one Registrar to the jurisdiction of another Registrarwithin the same State unless such change is confirmed by the RegionalDirector on an application made in this behalf by the company in theprescribed manner.

Thus according to Section 12(5), a company can change its


registered office from one place to another within the local limits ofthe city, town or village, where it is situated, by merely passing a Boardresolution. A notice of the change is required to be given to the Registrarin Form no INC 22, within 15 days of such change.(Section 12(4)read with rule 27 of Companies(incorporation) Rules, 2014. This doesnot involve alteration of memorandum.

(b) Change from one city to another within the same State

If the registered office is to be shifted from one city, town or villageto another city, town or village within the same State, a specialresolution has to be passed in the general meeting of the company. Anotice of the change is required to be given to the Registrar in Formno INC 22, within 15 days of such change along with Form no MGT14, as required under Section 117(1), towards special resolutionpassed...

(c) Change within the same State from the jurisdiction of one Registrar ofCompanies to the jurisdiction of another Registrar of Companies

Proviso to Section 12(5) provides that confirmation by the RegionalDirector will be necessary for changing registered office of a companyfrom one place to another if the change of registered office is from thejurisdiction of one Registrar to the jurisdiction of another within thesame State.

Section 12(6) states that the Regional Director, after hearing theparties shall pass necessary orders within a period of thirty days fromthe date of the receipt of the application. Thereafter, the companyconcerned shall file a copy of the said order with the Registrar ofCompanies (ROC) within a period of sixty days from the date of theconfirmation order by Regional Director. The said ROC shall record theordered changes in its records. The ROC of the state where the registeredoffice of the company was previously situated, shall transfer all thedocuments and papers to the new ROC.

Rule 28 of Companies(Incorporation) Rules 2014 states that

(1) An application seeking confirmation from the Regional Directorfor shifting the registered office within the same State from thejurisdiction of one Registrar of Companies to the jurisdiction ofanother Registrar of Companies, shall be filed by the companywith the Regional Director in Form no.INC.23 along with thefee.

(2) The company shall, not less than one month before filing any


application with the Regional Director for the change ofregistered office.-

(a) publish a notice, at least once in a daily newspaper publishedin English and in the principal language of that district inwhich the registered office of the company is situated andcirculating in that district; and

(b) serve individual notice on each debenture holder, depositorand creditor of the company, clearly indicating the matterof application and stating that any person whose interestis likely to be affected by the proposed alteration of thememorandum may intimate his nature of interest andgrounds of opposition to the Regional Director with a copyto the company within twenty one days of the date ofpublication of that notice:

Additionally, Form no MGT.14 is to be filed with the Registrartowards special resolution.

(d) Change of Registered office from one State to another

The change of registered office from one State to another Stateinvolves alteration of memorandum, and the change can be effectedby a special resolution of the company which must be confirmed bythe Central Government on an application made to it [Section 13(4)].

According to Section 13(1), a company may, by special resolutionand after complying with the procedure specified alter the provisionsof its memorandum

Further, the alteration of the provisions of the memorandum relatingto the change of the place of its registered office from one State toanother shall not take effect unless it is confirmed by the CentralGovernment on an application made to it in the prescribed form andmanner [Section 13(4)].

The Central Government shall dispose of the application under sub-section (4) within a period of sixty days and before passing its ordermay satisfy itself that the alteration has the consent of the creditors,debenture-holders and other persons concerned with the company orthat a sufficient provision has been made by the company either forthe due discharge of all its debts and obligations or that adequate securityhas been provided for such discharge. [Section 13(5)].

A company shall, in relation to any alteration of its memoranduminvolving change of registered office from one State to another, file


with the Registrar the special resolution passed by it in MGT 14 [Section13(6)].

Where an alteration of the memorandum results in the shifting ofthe registered office of a company from one State to another, a certifiedcopy of the order of the Central Government approving the alterationshall be filed by the company with the Registrar of each of the Stateswithin such time and in such manner as may be prescribed, who shallregister the same, and the Registrar of the State where the registeredoffice is being shifted to, shall issue a fresh certificate of incorporationindicating the alteration. [Section 13(7)].

Rule 30-31 of Companies (Incorporation) Rules 2014

Rule 30 states that

(1) An application under sub-section (4) of section 13, for thepurpose of seeking approval for alteration of memorandumwith regard to the change of place of the registered office fromone State Government or Union territory to another, shall befiled with the Central Government in Form No. INC.23 alongwith the fee and shall be accompanied by the followingdocuments, namely:-

(a) a copy of the memorandum and articles of association;

(b) a copy of the notice convening the general meeting alongwith relevant Explanatory Statement;

(c) a copy of the special resolution sanctioning the alterationby the members of the company;

(d) a copy of the minutes of the general meeting at which theresolution authorizing such alteration was passed, givingdetails of the number of votes cast in favor or against theresolution;

(e) an affidavit verifying the application;

(f) the list of creditors and debenture holders entitled to objectto the application;

(g) an affidavit verifying the list of creditors;

(h) the document relating to payment of application fee;

(i) a copy of board resolution or Power of Attorney or theexecuted Vakalatnama, as the case may be.


(2) There shall be attached to the application, a list of creditors anddebenture holders, drawn up to the latest practicable datepreceding the date of filing of application by not more than onemonth, setting forth the following details, namely:-

(a) the names and address of every creditor and debenture holderof the company;

(b) the nature and respective amounts due to them in respectof debts, claims or liabilities:

Provided that the applicant company shall file an affidavit,signed by the Company Secretary of the company, if any andnot less than two directors of the company, one of whom shallbe a managing director, where there is one, to the effect thatthey have made a full enquiry into the affairs of the companyand, having done so, have formed an opinion that the list ofcreditors is correct, and that the estimated value as given in thelist of the debts or claims payable on a contingency or notascertained are proper estimates of the values of such debts andclaims and that there are no other debts of or claims againstthe company to their knowledge.

(3) There shall also be attached to the application an affidavit fromthe directors of the company that no employee shall beretrenched as a consequence of shifting of the registered officefrom one state to another state and also there shall be anapplication filed by the company to the Chief Secretary of theconcerned State Government or the Union territory

(4) A duly authenticated copy of the list of creditors shall be keptat the registered office of the company and any person desirousof inspecting the same may, at any time during the ordinaryhours of business, inspect and take extracts from the same onpayment of a sum not exceeding ten rupees per page to thecompany.

(5) There shall also be attached to the application a copy of theacknowledgment of service of a copy of the application withcomplete annexures to the Registrar and Chief Secretary of theState Government or Union territory where the registered officeis situated at the time of filing the application.

(6) The company shall at least fourteen days before the date ofhearing-

(a) advertise the application in the Form No.INC.26 in a


vernacular newspaper in the principal vernacular languagein the district in which the registered office of the companyis situated, and at least once in English language in anEnglish newspaper circulating in that district;

(b) serve, by registered post with acknowledgement due,individual notice(s), to the effect set out in clause (a) oneach debenture-holder and creditor of the company; and

(c) serve, by registered post with acknowledgement due, a noticetogether with the copy of the application to the Registrarand to the Securities and Exchange Board of India, in thecase of listed companies and to the regulatory body, if thecompany is regulated under any special Act or law for thetime being in force.

(7) Where any objection of any person whose interest is likely tobe affected by the proposed application has been received by theapplicant, it shall serve a copy thereof to the CentralGovernment on or before the date of hearing.

(8) Where no objection has been received from any of the parties,who have been duly served, the application may be put up fororders without hearing.

(9) Before confirming the alteration, the Central Government shallensure that, with respect to every creditor and debenture holderwho, in the opinion of the Central government, is entitled toobject to the alteration, and who signifies his objection in themanner directed by the Central government, either his consentto the alteration has been obtained or his debt or claim hasbeen discharged or has determined, or has been secured to thesatisfaction of the Central Government. (10.) The CentralGovernment may make an order confirming the alteration onsuch terms and conditions, if any, as it thinks fit, and maymake such order as to costs as it thinks proper:

Provided that the shifting of registered office shall not be allowed ifany inquiry, inspection or investigation has been initiated against thecompany or any prosecution is pending against the company underthe Act.

Rule 31 The certified copy of the order of the Central Government,approving the alteration of the memorandum for transfer of registeredoffice of the company from one State to another, shall be filed in FormNo.INC.28 along with the fee as with the Registrar of the State withinthirty days from the date of receipt of certified copy of the order.


Alteration of Objects Clause

According to section 13(1), a company may, by a special resolutionand after complying with the procedure specified in this section, alterthe provisions of its memorandum. It means that a company canchange its objects by passing a special resolution. Further section13(6)(a) provides that a company shall, in relation to any alterationof its memorandum, file with the Registrar the special resolution passedby the company under section 13(1). As per section 13(9), the Registrarshall register any alteration of the memorandum with respect to theobjects of the company and certify the registration within a period ofthirty days from the date of filing of the special resolution in accordancewith section 13(6)(a).

Consequently pursuant to Section 13(1), a company can changeits objects clause by passing a special resolution. Further in case of alisted company, the special resolution for alteration in the objects clauseof the Memorandum of Association needs to be passed through PostalBallot in terms of section 110.

Further, section 13(8) lays down that a company, which has raisedmoney from public through prospectus and has any unutilised amountout of the money so raised, shall not change its objects for which itraised the money through prospectus unless a special resolution is passedby the company and—

(i) the details, as may be prescribed, in respect of such resolutionshall be published in the newspapers (one in English and one invernacular language) which is in circulation at the place wherethe registered office of the company is situated and shall also beplaced on the website of the company, if any, indicating thereinthe justification for such change;

(ii) the dissenting shareholders shall be given an opportunity toexit by the promoters and shareholders having control inaccordance with regulations to be specified by the Securitiesand Exchange Board.

Also for deleting any portion of the objects clause, the procedurelaid down in this section has to be followed.

A company may wish to alter its objects stated in its memorandumdue to various reasons e.g. if a company wishes to cut-back i.e. whereit feels it has diversified in various directions and that management ofthe company has become difficult or uneconomical, it may alter itsobjects to sell or dispose of whole or part of its undertaking(s).


Rule 32 of Companies (Incorporation) Rules states that :

(1) when the company has raised money from public throughprospectus and has any unutilised amount out of the moneyso raised, it shall not change the objects for which the moneyso raised is to be applied unless a special resolution is passedthrough postal ballot and the notice in respect of the resolutionfor altering the objects shall contain the following particulars,namely:-

(a) the total money received;

(b) the total money utilized for the objects stated in theprospectus;

(c) the unutilized amount out of the money so raised throughprospectus,

(d) the particulars of the proposed alteration or change in theobjects;

(e) the justification for the alteration or change in the objects;

(f) the amount proposed to be utilised for the new objects;

(g) the estimated financial impact of the proposed alterationon the earnings and cash flow of the company;

(h) the other relevant information which is necessary for themembers to take an informed decision on the proposedresolution;

(i) the place from where any interested person may obtain acopy of the notice of resolution to be passed.

(2) The advertisement giving details of each resolution to be passedfor change in objects which shall be published simultaneouslywith the dispatch of postal ballot notices to shareholders.

(3) The notice shall also be placed on the website of the company, ifany.

Registration of Alteration

Section 13(6)(a) provides that a company shall, in relation to anyalteration of its memorandum, file with the Registrar :

(a) the special resolution passed by the company under section13(1); and

(b) the approval of the Central Government under section 13(2), ifthe alteration involves any change in the name of the company.


The special resolution shall be filed with the Registrar within thirtydays of the passing or making thereof in the prescribed manner andpayment of prescribed fees within the time specified under section 403.

As per section 13(9), the Registrar shall register any alteration ofthe memorandum with respect to the objects of the company andcertify the registration within a period of thirty days from the date offiling of the special resolution in accordance with section 13 (6)(a).

Further section 13(7) provides that where an alteration of thememorandum results in the transfer of the registered office of acompany from one State to another, a certified copy of the order of theCentral Government approving the alteration shall be filed by thecompany with the Registrar of each of the States within such timeand in such manner as may be prescribed, who shall register the same,and the Registrar of the State where the registered office is being shiftedto, shall issue a fresh certificate of incorporation indicating thealteration.

The certificate shall be conclusive evidence that all the requirementsof this Act with respect to the alteration and confirmation thereofhave been complied with. The Registrar of the State from which theregistered office is transferred will send to the Registrar of the otherState all the documents relating to the company registered in his office.

No alteration made under section 13 (i.e., alteration ofmemorandum) shall have any effect until it has been registered inaccordance with the provisions of this section. [Section 13(10)].

The main spirit behind Section 13(7) of the Companies Act, 2013in regard to the filing of the order confirming the transfer of thecompany’s registered office from one State to another State with theRegistrar of Companies of each State is that the Registrar of Companiesfrom whose State the registered office is transferred should keep theorder duly registered in his office as an evidence to such shifting andshould transfer all other records of the company to the Registrar ofCompanies to whose State the Registered Office has been so shifted.The other Registrar of Companies will register the other copy of theorder and keep that order with the records transferred to him by hiscounterpart.

Alteration of Liability Clause

According to section 13(1), a company may, by a special resolutionand after complying with the procedure specified in this section, alterthe provisions of its memorandum. It means that a company can


change the liability clause of its memorandum of association by passinga special resolution. Further section 13(6)(a) provides that acompany shall, in relation to any alteration of its memorandum,file with the Registrar the special resolution passed by the companyunder section 13(1).

Alteration of Capital Clause

A limited company having a share capital may make the followingtypes of alterations in its memorandum by an ordinary resolution, ifso authorised by its articles, at its general meeting to (Section 61)—

(i) increase its authorised share capital by such amount as it thinksexpedient;

A company may at any time increase its authorised share capitalby the alteration of its memorandum. Although, section 61(1)(a) of the Companies Act, 2013 refers to the issue of new shares,it really deals with a case of increase in the authorised sharecapital, and not increase of the issued share capital. The case ofincrease of the issued or subscribed capital is dealt with separatelyby section 62 of the Act.

(ii) consolidate and divide all or any of its share capital into sharesof a larger amount than its existing shares:

(iii) convert all or any of its fully paid-up shares into stock, andreconvert that stock into fully paid-up shares of anydenomination;

(iv) sub-divide its shares, or any of them, into shares of smalleramount than is fixed by the memorandum, so, however, thatthe proportion between the amount paid and unpaid shallremain the same.

(v) cancel shares which, at the date of the passing of the resolutionin that behalf, have not been taken or agreed to be taken byany person, and diminish the amount of its share capital bythe amount of the shares so cancelled.

All the above alterations do not require the confirmation by theTribunal except that alteration relating to consolidation and divisionwhich results in changes in the voting percentage of shareholders shallnot take effect unless it is approved by the Tribunal on an applicationmade in the prescribed manner.

These alterations are, however, required to be notified and a copy ofthe resolution should be filed with the Registrar within 30 days of the


passing of the resolution along with an altered memorandum. [Section64(1)]

The Registrar shall record the notice and make any alteration whichmay be necessary in the company’s memorandum or articles or both.It must be noted that cancellation of shares in pursuance of section61(1) does not amount to reduction of share capital.

Alteration of Articles of Association

A company has a statutory right to alter its articles of association.But the power to alter is subject to the provisions of the Act and to theconditions contained in the memorandum. Section 14(1) provides thatsubject to the provisions of this Act and the conditions contained in itsmemorandum, if any, a company may, by a special resolution, alterits articles including alterations having the effect of conversion of aprivate company into a public company; or a public company into aprivate company. First proviso to section 14(1) lays down that wherea company being a private company alters its articles in such a mannerthat they no longer include the restrictions and limitations which arerequired to be included in the articles of a private company under thisAct, the company shall, as from the date of such alteration, cease to bea private company. Second proviso to section 14(1) stipulates thatany alteration having the effect of conversion of a public companyinto a private company shall not take effect except with the approvalof the Tribunal which shall make such order as it may deem fit.2

Every alteration of the articles under this section and a copy of theorder of the Tribunal approving the alteration as per section 14(1) shallbe filed with the Registrar, together with a printed copy of the alteredarticles, within a period of fifteen days in such manner as may beprescribed, who shall register the same. [Section 14 (2)]

Any alteration of the articles registered under section 14(2) shall,subject to the provisions of this Act, be valid as if it were originally inthe articles. [Section 14(3)]

Copies of memorandum, articles, etc., to be given tomembers

(1) A company shall, on being so requested by a member, send tohim within seven days of the request and subject to the paymentof such fees as may be prescribed, a copy of each of the followingdocuments, namely:—

(a) the memorandum;

2 Second proviso to Section 14(1) is yet to be notified.


(b) the articles; and

(c) every agreement and every resolution referred to in sub-section (1) of section 117, if and in so far as they have notbeen embodied in the memorandum or articles.

(2) If a company makes any default in complying with theprovisions of this section, the company and every officer of thecompany who is in default shall be liable for each default, to apenalty of one thousand rupees for each day during which suchdefault continues or one lakh rupees, whichever is less.

CONVERSION OF COMPANIES ALREADY REGISTERED

Section 18 provides as under with regard to conversion of companiesalready registered:

(1) A company of any class registered under this Act may convertitself as a company of other class under this Act by alterationof memorandum and articles of the company in accordancewith the provisions of this Chapter.

(2) Where the conversion is required to be done under this section,the Registrar shall on an application made by the company,after satisfying himself that the provisions of this Chapterapplicable for registration of companies have been compliedwith, close the formerregistration of the company and afterregistering the documents referred to in sub-section (1), issue acertificate of incorporation in the same manner as its firstregistration.

(3) The registration of a company under this section shall not affectany debts, liabilities, obligations or contracts incurred or enteredinto, by or on behalf of the company before conversion andsuch debts, liabilities, obligations and contracts may be enforcedin the manner as if such registration had not been done.

Subsidiary company not to hold shares in its holdingcompany

Section 19 provides that no company shall, either by itself orthrough its nominees, hold any shares in its holding company and noholding company shall allot or transfer its shares to any of its subsidiarycompanies. Any such allotment or transfer of shares of a company toits subsidiary company shall be void.

However, this will not apply in the following cases:

(a) where the subsidiary company holds such shares as the legal


representative of a deceased member of the holding company;or

(b) where the subsidiary company holds such shares as a trustee;or

(c) where the subsidiary company is a shareholder even before itbecame a subsidiary company of the holding company

It is further provided that the subsidiary company referred to aboveshall have a right to vote at a meeting of the holding company only inrespect of the shares held by it as a legal representative or as a trustee,as referred to in clause (a) or clause (b).

In case of a holding company which is a company limited byguarantee or an unlimited company, not having a share capital, thereference of ‘share’ shall be construed as a reference to the interest of itsmembers, whatever be the form of interest.

SERVICE OF DOCUMENTS

Section 20 (1) provides that a document may be served on acompany or an officer thereof by sending it to the company or theofficer at the registered office of the company by registered post or byspeed post or by courier service or by leaving it at its registered office orby means of such electronic or other mode as may be prescribed.

Where securities are held with a depository, the records of thebeneficial ownership may be served by such depository on the companyby means of electronic or other mode.

As per the rules, the term, “electronic transmission” means acommunication–

(a) delivered by –

(i) facsimile telecommunication or electronic mail whendirected to the facsimile number or electronic mail address,respectively, which the company or the officer has providedfrom time to time for sending communications to thecompany or the officer respectively;

(ii) posting of an electronic message board or network that thecompany or the officer has designated for suchcommunications, and which transmission shall be validlydelivered upon the posting; or

(iii) other means of electronic communication, in respect ofwhich the company or the officer has put in place reasonable


systems to verify that the sender is the person purportingto send the transmission; and

(b) that creates a record that is capable of retention, retrieval andreview, and which may thereafter be rendered into clearly legibletangible form.

Other than filing of documents with the Registrar in electronicmode, a document may be served on Registrar or any member bysending it to him by post or by registered post or by speed post or bycourier or by delivering at his office or address, or by such electronic orother mode as may be prescribed. For this purpose “electronictransmission” means a communication –

(a) delivered by –

(i) facsimile telecommunication or electronic mail whendirected to the facsimile number or electronic mail address,respectively, which the Registrar or the member has providedfrom time to time for sending communications to theRegistrar or the member respectively;

(ii) posting of an electronic message board or network that theRegistrar or the member has designated for thosecommunications, and which transmission shall be validlydelivered upon the posting; or

(iii) other means of electronic communication, in respect ofwhich the Registrar or the member has put in placereasonable systems to verify that the sender is the personpurporting to send the transmission, and (b) that creates arecord that is capable of retention, retrieval and review, andwhich may thereafter be rendered into clearly legible tangibleform

A member may request for delivery of any document through aparticular mode, for which he shall pay such fees as may be determinedby the company in its annual general meeting.

AUTHENTICATION OF DOCUMENTS

Section 21 states that unless otherwise provided, a document orproceeding requiring authentication by a company; or contracts madeby or on behalf of a company, may be signed by any key managerialpersonnel or an officer of the company duly authorized by the Boardin this behalf.