INCORPORATION OF
COMPANIES UNDER
COMPANIES ACT, 2013
Presented By:
S. DHANAPAL
Sr. Partner
S Dhanapal & Associates
Practising Company Secretaries
Chennai
Organised By:
Nellore Branch of SIRC of ICAI
THURSDAY, 30th April, 2014
Scheme of Presentation
Provisions relating to
incorporation of Private &
Public Companies
Provisions relating to
MOA and AOA
Incorporation of OPC
Incorporation of
companies not for profit
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Provisions relating to
incorporation of Private
and Public Companies
The only way to make sense out of change is to plunge into it, move with it, and join the dance.
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Different Kinds of Companies which can
be incorporated under CA, 2013
• Company Limited by shares
• Company limited by Guarantee
• Unlimited Company
• Formation of Companies with charitable objects etc –
Section 8 company
• Conversion of other form of entities as company under the
act (Chapter XXI companies)
• One person company
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Steps in incorporation of Pvt/Pub Co.
Step 1 - Checking
Name availability /
Obtaining Name
Step 2 - Incorporate
the company by
filing necessary
Forms along with
the requisite
documents and fee
Step 3 - If the
documents are
found in order, ROC
will register the
company and issue
Certificate of
incorporation
Contd..
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Steps in incorporation contd….
Step 4 - Filing of
Document for
Registered office of
the company within
30 days
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Step 5 - File
declaration stating
that the capital
amount has been
brought in by the
subscribers
Step 6 - Commence
business like sales,
purchase ,
borrowing only after
completing Step 4
& Step 5
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Procedural Aspects
Documents to be furnished at the time of incorporation
• Declaration by Professionals
• Affidavit by each of the subscribers to the memorandum and
each of the first directors named in the articles
• Address for correspondence till registered office is established
• Details of subscribers
• Particulars of first directors and their consent to act as
director
• MOA and AOA
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Procedural Aspects
Details of subscribers that need to be furnished at time of incorporation
The following particulars of every subscriber to the memorandum shall be
filed with the Registrar:
(a) Name and recent Photograph affixed and scan with MOA and AOA
(b) Father’s/Mother’s/ Spouse’s name
(c) Nationality
(d) Date of Birth
(e) Place of Birth (District and State)
(f) Occupation
(g) Income-tax permanent account number
(h) Permanent residential address and also Present address ( Time since
residing at present address and address of previous residence address
(es) if stay of present address is less than one year ) similarly the
office/business addresses
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Procedural Aspects
Details of subscribers that need to be furnished at time of
incorporation contd….
(i) Email id of Subscriber
(j) Mobile No. of Subscriber
(k) Phone No. of Subscriber
(l) Fax no. of Subscriber
(m) Proof of Identity
(n) Residential proof
(o) Proof of nationality, in case the subscriber is a foreign national.
(p) Each subscriber to the MOA and AOA shall furnish the specimen
signature duly verified by their respective banker at the time of
incorporation.
(q) If the subscriber is already a director or promoter of a company(s),
then details of those companies are also needed to be given .
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Procedural Aspects
Procedure of Signing of Memorandum of Association and Articles of
Association by subscriber to Memorandum and Articles of
Association
If the Subscriber is Literate and Individual
• Name, Address, Description and occupation, if any, in the presence
of at least one witness
• Witness shall sign along with name, address, description and
occupation, if any.
• The witness shall state that “I witness to subscriber/subscriber(s)
who has/have subscribed and signed in my presence. Further I have
verified his/their ID for their identification and satisfied myself of
his/her/their identification particulars as filled in. He shall also
mention the place and date of signing.
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Procedural Aspects
Procedure of Signing of Memorandum of Association and Articles of
Association by subscriber to Memorandum and Articles of Association
If the Subscriber is Body Corporate
• Same method as mentioned above
• However , In case of Body Corporate subscriber,
•
The memorandum and articles of association shall be signed by
director, officer or employee of the body corporate duly authorized in
this behalf by a resolution of the board of directors of the body
corporate,
•
The person so authorized shall not, at the same time, be a subscriber
to the memorandum and articles of Association.
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Procedural Aspects
Procedure of Signing of Memorandum of Association and Articles of
Association by subscriber to Memorandum and Articles of
Association
If the Subscriber is Limited Liability Partnership
• Same method as mentioned above
• However , In case of Limited Liability Partnership subscriber,
• It shall be signed by a partner of the Limited Liability Partnership,
duly authorized by a resolution approved by all the partners of the
Limited Liability Partnership
• The person so authorized shall not, at the same time, be a
subscriber to the memorandum and articles of Association.
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Procedural Aspects
Procedure of Signing of Memorandum of Association and Articles of
Association by subscriber to Memorandum and Articles of Association
If Subscriber is a Foreign national
who visited India and intended to
incorporate a Company
If Subscriber is Foreign National
residing outside India and living in a
country in any part of Common
Wealth countries
If Subscriber is Foreign National
residing outside India and living in a
country which is a party of Hague
convention
If Subscriber is Foreign National
residing outside India and living in a
country outside the common wealth
and which is not a party to the Hague
Apostille Convention
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Same method as mentioned above,
However Incorporation shall be allowed only if subscriber is
having a valid Business Visa
Subscriber’s signatures and address on the memorandum
and articles of association and proof of identity shall be
notarized by a Notary (Public) in that part of the
Commonwealth.
Subscriber’s signatures and address on the memorandum
and articles of association and proof of identity shall be
notarized before a Notary (Public) of the country of his
origin and be duly apostillised in accordance with the said
Hague Convention
Subscriber’s signatures and address on the memorandum
and articles of association and proof of identity shall be
notarized before a Notary (Public) of such country and the
certificate of the Notary (Public) shall be authenticated by a
Diplomatic or Consular Officer empowered in this behalf
An insight on Changes proposed under Companies Act 2013
Provisions relating to
MOA and AOA
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An insight on Changes proposed under Companies Act 2013
Point for noting!
Letterheads should include CIN – Section 12 (3) (c)
Every Company shall get its name, address of its registered office and the Corporate
Identification number along with telephone number, fax number, if any, e-mail and the website
address, if any printed in all its business letters, billheads, letter papers and in all its notices
and other official publications.
If there is name change, former name should come – Proviso to Section 12
(3)
Where a company has changed its name(s) during the last two years, it shall paint or affix or
print, as the case may be, along with its name, the former name(s) so changed during the last
two years as required under clauses (a) and (c)
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Memorandum of Association – Section 13
Object Clause:
The Object clause of the company is now required to include only the following
•The objects for which the company is proposed to be incorporated
•Any matter considered necessary in furtherance thereof
Does this mean the company cannot have other objects clause in its MOA?
Liability clause :
It should state, Liability of members of the company, whether limited or unlimited and
also in the case of a company limited by shares, that liability of its members is limited to
the amount unpaid, if any, on the shares held by them.
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Shifting of Registered Office
Within same state from one ROC to another ROC
Application in form INC 23 to be filed with RD along
with annexure as required
Notice before one month to be published in english and
regional newspaper and individual notice on all
debenture holder, creditor and depositor.
Objection can be made within 21 days, else deemed as
no objection
shifting of registered office shall not be allowed if any
inquiry, inspection or investigation has been initiated
against the company or any prosecution is pending
against the company under the Act.
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Shifting of Registered Office
From one state to another
Application in form INC 23 to be filed with CG
along with documents as prescribed in rules
Notice before 14 days of hearing to be published
in English and regional newspaper and individual
notice on all debenture holder and creditor.
shifting of registered office shall not be allowed if
any inquiry, inspection or investigation has been
initiated against the company or any prosecution
is pending against the company under the Act.
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Articles of association- Section 5
Entrenchment Provisions
The articles of a company may contain provisions for entrenchment to the
effect that specified provisions of the articles may be altered only if
conditions or procedures as that are more restrictive than those applicable
in the case of a special resolution, are met or complied with
Entrenchment provisions can be included either
a) At the time of Incorporation of company itself or
b) Subsequent to incorporation
 In case of Public Company
For Altering Articles of Association to have Entrenchment clause, Alteration
needs to be approved by way of special resolution by members.
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Forms to be filed with Registrar for entrenchment (Rule 10 of
the Companies (Incorporation) Rules, 2014)
 In case of existing companies, the Form No. MGT-14 shall be filed
within thirty days from the date of including entrenchment clause in
the articles.
Form of Articles - Rule 11 of the Companies (Incorporation) Rules,
2014.
 The model articles as prescribed in Table F of Schedule I may be
adopted by a company either in totality or otherwise
ALTERATION OF ARTICLES – Section 14
The company has to pass special resolution for alteration of articles and has
to file Form MGT-14 with Registrar of Companies.
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ONE PERSON COMPANY
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One Person Company
Definition [Section 2(62)]
“One Person Company” means a company which has only one
person as a member.
Salient Features
Number of members(Min & Max is 1 )
Number of Directors(Min 1 & Max 12)
Name of company (Shall carry word (OPC)
Member and Nominee to be natural persons
Limit on number of OPCs is restricted to 1
Automatic conversion to pvt/public co.
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One Person Company
Special requirements, privileges and exemptions:
Incorporation (Nomination also is mandatory)
Annual Return (Signed by CS or the Director)
Financial Statement (Cash flow is not required)
Number of Directors (12 with SR no limit)
General Meetings (No meeting required)
Board Meetings(Two meetings)(Once 6 months)
Term of auditor (No rotation is applicable)
Contract by OPC ( Shall record in minutes)
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One Person Company
Mandatory conversion of OPC to pvt/pub co.
Voluntary conversion of Pvt./Pub co. to OPC
Penal Provisions for OPC
S.No.
1.
Nature of Default
Amount of Penalty
Non-Compliance with any Company and Officer in Default –
provisions of Act or Rules
One time penalty of fine upto Rs.
5000/- plus continuing penalty of
fine of Rs. 500/- per day till
offence continues.
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Incorporation of One Person Company

ONE PERSON COMPANY (OPC)

Eligible Person for Incorporation & nominee :-
1.
2.
3.
Only natural person who is an Indian Citizen & resident in India
Resident in India - Stayed in India not less than 182 Days immediately
preceding F.Y
Maximum - Not more than 1 OPC

Nomination – Rule 2.2:-
•
Subscriber to OPC shall nominate person along with consent and fee as
provided in Annex ‘B’ to registrar along with its MOA & AOA.
Withdrawal –Nominated person may withdraw his consent by giving notice
provided that another person should be appointed as nominee with in 15 days
of such withdrawal in same manner provided
OPC has to file relevant form within 30 days having notice of such withdrawal.
Change – At any time for any reason including in case of death and incapacity
to contract such has to be intimated to Roc.
•
•
•

Incorporation of One Person Company
SOLE MEMBER:-
 Ceases to be member in the event of Death or his incapacity
 His Nominee becomes the member of OPC and as such he shall nominate
nominee with in 15 days of becoming member
 Such cessation and nomination has to be filled with the Registrar of
Companies

PENALTY – RULE 2.3:-
 OPC and any officer of officer contravenes provision shall be punishable with
fine which may extend to 5000 and further fine which may extend to 5000 for
everyday if same contravention continues

OPC TO CONVERT ITSELF INTO PVT. CO. OR PUBLIC CO – Rule 2.4
 Where paid up Share Capital of OPC exceed 50Lakhs or Avg turnover exceed 2
Crores – it ceases to be OPC
 Such OPC has to convert it self into Pvt. or Public Co. within 6 months from
date of increase of paid-up capital beyond 50 Lakh or last day of relevant
period during which Avg annual turnover exceeds 2 Crore
 Within 30 days of such event OPC has to inform that it has ceased to be OPC
One Person Company
Salient Features
•
•
•
•
•
•
•
A One Person Company is incorporated as a private limited company.
It must have only one member at any point of time and may have only one
director.
The words “One Person Company” must be mentioned in brackets below the
name of the company.
The member and nominee should be natural persons, Indian Citizens and
resident in India. The term "resident in India" means a person who has stayed
in India for a period of not less than 182 days during the immediately
preceding one calendar year.
One person cannot incorporate more than 1 OPC or become nominee in more
than 1 OPC.
If a Member of OPC becomes a member in another OPC by virtue of his being
nominee in that OPC then within 180 days he shall be meet the eligibility
criteria of being Member in one OPC.
OPC to lose its status if paid up capital exceeds Rs. 50 lakhs or average annual
turnover is more than 2 crores in 3 immediate preceding consecutive years.
One Person Company
Salient Features
• No minor shall become member or nominee of the One Person Company
or can hold share with beneficial interest.
• Such Company cannot be incorporated or converted into a company under
section 8 of the Act.
• Such Company cannot carry out Non-Banking Financial Investment
activities including investment in securities of any body corporate.
• No such company can convert voluntarily into any kind of company unless
2 years is expired from the date of incorporation, except in cases where
capital or turnover threshold limits are reached.
• Existing Private Limited Companies can convert themselves into one
Person Company by following the procedure prescribed in the rules,
provided their capital and turnover is below the threshold limits.
• The words ‘‘One Person Company’’ shall be mentioned in brackets below
the name of such company, wherever its name is printed, affixed or
engraved.
RESERVATION OF NAME
 UNDESIRABLE NAMES – Rule 2.5
•
•
•
•
•
•
•
It attracts proviso of Section 3 of The Emblems & Names ( Prevention of
Improper Use) Act, 1950
Name of the Registered Trade Mark – except consent of the owner of such
trademark
Identical or too resembles with name of existing Co. or LLP
Not in consonance with principal object
Other than finance companies no other co. is allowed to use words like
financing, leasing, chit fund, investments , securities…..
Proposed name is identical to Co. dissolved and the period of 2 years has not
elapsed from such dissolution or if the proposed name is struck off in pursuant
to Section 248, the same will not be allowed before expiry of 20 years or in
case of LLP 5 Years
Changed its activities if not reflected in its name than it shall change its name
in line with activities within period of 6 month
SECTION 8 COMPANY
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Steps in incorporation
• Step 1 - Checking Name availability / Obtaining Name
• Step 2 - Apply for grant of license by filing necessary
Form along with the requisite documents and fee
• Step 3 - Applicant shall Within a week of application,
publish a notice as per Form 2.18 at his own expenses
at least once in a) Vernacular language in vernacular
paper and b) English Language in English Paper and c)
on websites to be notified by central Government
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Steps in incorporation
• Step 4 - Deliver the copy of the notice forthwith to
Registrar
• Step 5 - Registrar may require an applicant to furnish
approval or concurrence of any appropriate authority,
regulatory body, department, ministry of central or
state government, if required.
• Step 6 - If registrar decides to issue license, license
shall be in form 2.19 and he will have power to include
conditions, as may be deemed necessary.
• Step 7 - Incorporate the company by filing necessary
form along with the requisite documents and fee
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Steps in incorporation
• Step 8 - If the documents are found in order, ROC will
register the company and issue Certificate of
incorporation (Section 7 (2))
• Step 9 - Filing of Document for Registered office of the
company in along with necessary documents within 30
days of incorporation (Section 12)
• Step 10 - File declaration in stating that the capital
amount has been brought in by the subscribers.
(Section 11)
• Step 11 - Commence business like sales , purchase ,
borrowing only after completing Step 9 & Step 10
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Quick Recap
Basis for
Comparison
Maximum number of
members for private
companies
Object Clause of MOA
Registered Office
Commencement of
Business
Provision contained in Companies Act,
1956
Provision contained in Companies
Act, 2013
50 (Fifty)
200 (Two Hundred)
Object clause bifurcated into – Main Objects,
Incidental or Ancillary Objects and Other Objects.
MOA to contain the objects for which the
company is proposed to be incorporated and any
matter considered necessary in furtherance
thereof.
Companies are required to furnish the details of the A company shall, on and from the 15th day of its
Registered office of the company by filing Form 18
incorporation have a registered office. The
at the time of incorporation.
company is also required to furnish to the
Registrar verification of its registered office within
a period of thirty days of its incorporation in a
prescribed manner.
Notice of every change of the situation of the
Notice of every change of the situation of the
registered office, shall be given to the Registrar
registered office, shall be given to the Registrar
within thirty days of the change, who shall record within fifteen days of the change, who shall record
the same.
the same.
Provision is applicable only to public limited
Applicable to all companies having share capital.
companies
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Quick Recap…..

Affidavit to be filed by first directors and subscribers that they have not
been convicted of any offence, breach of duty to any company etc. and
that all information furnished regarding incorporation is true and
complete to their knowledge.

Proof of identity to be furnished for all directors and subscribers

Directors’ interest in other companies/body corporate to be furnished.

Subscription money to be brought in within 180 days of incorporation

AOA may contain entrenchment provision.

Notice of change in situation of registered office and alteration of
articles to be filed with ROC within 15 days instead of 30 days as
provided in the earlier Act.
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Penal Provisions
Section
7(5)
7 (6)
Nature of Default
Penalty
If any person furnishes any false or
incorrect particulars of any information
or suppresses any material information,
of which he is aware in any of the
documents filed with the Registrar in
relation to the registration of a
company
The promoters, the persons named as
the first directors of the company and
the persons making declaration are
liable where, at any time after the
incorporation of a company, it is proved
that the company has been got
incorporated by furnishing any false or
incorrect information or representation
or by suppressing any material fact or
information in any of the documents or
declaration filed or made for
incorporating such company, or by any
fraudulent action
He is liable for action of Fraud under section 447, for
which punishment is
Imprisonment for a term which shall not be less than
six months but which may extend to ten years and shall
also be liable to fine which shall not be less than the
amount involved in the fraud, but which may extend to
three times the amount involved in the fraud
They are liable for action of Fraud under section 447,
for which punishment is
Imprisonment for a term which shall not be less than
six months but which may extend to ten years and shall
also be liable to fine which shall not be less than the
amount involved in the fraud, but which may extend to
three times the amount involved in the fraud
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Penal Provisions
Section
Nature of Default
Penalty
Proviso to
8 (11)
when it is proved that the affairs
of the section 8 company were
conducted fraudulently, every
officer in default is liable
They are liable for action of Fraud under section
447, for which punishment is
Imprisonment for a term which shall not be less
than six months but which may extend to ten
years and shall also be liable to fine which shall
not be less than the amount involved in the
fraud, but which may extend to three times the
amount involved in the fraud
11 (2)
If company makes default in
complying with requirements of
Section 11
a.
Company will be liable for fine which may
extend to five thousand rupees.
b.
Every officer of the company who is in
default shall be punishable with fine which
may extend to one thousand rupees for
every day.
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Penal Provisions
Section
12 (8)
Nature of Default
Penalty
If company makes default in Company and every officer of the company who
complying with requirements of is in default shall be punishable with fine which
Section 12
may extend to one thousand rupees for every
day during which the default continues but not
exceeding one lakh rupees.
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FORMS PRESCRIBED FOR INCORPORATION
Form no.INC 2
Nomination of the person who shall, in the event of subscriber’s death or his
incapacity to contract, become the member of OPC
Form no.INC 3
Consent of the person who shall, in the event of subscriber’s/member’s death
or his incapacity to contract, become the member of OPC
Form no.INC 3
Notice of withdrawal of consent by the nominee of OPC
Form no.INC 4
Intimation about change in the name of the nominee of OPC
Form no.INC 4
Intimation of cessation
Form no.INC 5
Form no.INC 7
Form no.INC 2
Notice to the Registrar by one person company giving intimation of ceasing to
be such company
Application for incorporation of a company [Pursuant to section 7(1) and rule
12]
Notice of provisions of entrenchment in Articles of Association incase of
Incorporation of the Company
Form no.INC 7
Application for incorporation of a company
Form no.INC 8
Declaration [Pursuant to section 7(1)(b) and rule 2.11]
Form no.INC 9
Affidavit
Form no.DIR 12
Particulars of appointment of first directors and their consent to act as
such and the disclosure of their interest in other firms or body corporate
Form no.INC 25
The Certificate of Incorporation
Form no.INC 12
Application to the Registrar for the grant of licence under section 8
Form no.INC 14
Declaration
Form no.INC 15
Declaration
Form no.INC 13
Memorandum of association
Form no.INC 26
notice
Form no.INC 16
Licence under section 8 (1) of the Companies Act, 2013
Form no.INC 17
Licence under section 8 (5) of the Companies Act, 2014
Form no.INC 18
Application to Regional Director for conversion of a company under
section 8 into any other kind of company
Form no.INC 19
Notice
Form no.INC 20
Intimation to Registrar of revocation of licence issued under section 8
Form no.INC 21
Declaration prior to the commencement of business or exercising
borrowing powers
Form no.INC 22
Notice of situation or change of situation of registered office
Form no.INC 22
Application for confirmation by Regional Director for change of
registered office of the company within the State
Form no.INC 25
Certificate of Incorporation pursuant to change of name
Form no.INC 23
Form no.INC 28
Application to the Central Government for approval to shift the
Registered Office from one State to another
Notice of order of the Central Government approving the transfer of
registered office from one State to another or within the State
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REFLECTIONS TO