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INTRODUCTION
COMPANY
What Is A Company?
The word 'Company' is an amalgamation of the Latin word
'Com' meaning "with or together" and ‘Pains’ meaning "bread".
Originally, it referred to a group of persons who took their meals
together. A company is nothing but a group of persons who have come
together or who have contributed money for some common person
and who have incorporated themselves into a distinct legal entity in
the form of a company for that purpose. Under Halsbury’s Laws of
England, the term "company" has been defined as a collection of many
individuals united into one body under special domination, having
perpetual succession under an artificial form and vested by the policies
of law with the capacity of acting in several respect as an individual,
particularly for taking and granting of property, for contracting
obligation and for suing and being sued, for enjoying privileges and
immunities in common and exercising a variety of political rights, more
or less extensive, according to the design of its institution or the
powers upon it, either at the time of its creation or at any subsequent
period of its existence.
Limited Liability
Perpetual Succession
Separate Property
Transferability of Shares
Common Seal
Separate Management
Promoter
Who is a promoter?
In many company matters, the term ‘promoter’ is of frequent
occurrence. A promoter is a person who brings about the incorporation
and organization of the corporation. His job is to bring together the
persons who are interested in the enterprise, aid in procuring
subscriptions and set in motion the machinery which leads to the
foundation itself. A promoter is like a trustee of the company, and his
dealings with the company must be open and fair.He stands at a
fiduciary position towards the company and his duties and liabilities
come to an end once he or she hands over the company to the board
of Directors. The property purchased on his own name is handed over
to the company on its Registration or Incorporation.
Registration
Definition: Filing an application with the Registrar Of Companies
[ROC] under The Indian Companies Act 1956, to make a company a
legal association is called registration of a company
Capital clause: The amount of share capital with which the company
is to be registered divided into shares must be specified giving details
of the number of shares and types of shares. A company cannot issue
share capital greater than the maximum amount of share capital
mentioned in this clause without altering the memorandum.
Articles of Association(AA)
The Articles of Association (AA) contain the rules and regulations of the
internal management of the company. The AA is nothing but a contract
between the company and its members and also between the
members themselves that they shall abide by the rules and regulations
of internal management of the company specified in the AA. It
specifies the rights and duties of the members and directors.
Normally, every company has its own AA. However, if a company does
not have its own AA, the model AA specified in Schedule I - Table A will
apply. A company may adopt any of the model forms of AA, with or
without modifications. The articles of association should be in any of
the one form specified in the tables B, C, D and E of Schedule 1 to the
Companies Act, 1956. Form in Table B is applicable in case of
companies limited by the shares. Form in Table C is applicable to the
companies limited by guarantee and not having share capital, form in
Table D is applicable to company limited by guarantee and having a
share capital whereas form in table E is applicable to unlimited
companies. However, a private company must have its own AA.
Certificate of Incorporation:
4. Change of Name
The provisions of section 21 of the Companies Act, 1956 apply in
respect of change of name of a company. The following are the steps
involved:-
i. Form No.23 with filing fee for the special resolution passed for
change of name with extract of Special Resolution, Notice of
General Meeting, and Explanatory Statement, duly certified as
true by a Director or Company Secretary of the Company. In case
notice of convening general meeting is shorter than 21 days,
consent of the members duly certified as 'True' must be
produced along with the other papers mentioned above.
ii. Copies of last two years’ Balance Sheets certified by a Director /
Secretary of the Company along with particulars of filing position
of the Balance Sheets and Annual Returns last filed by the
Company with copies of the receipts duly certified by Director /
Secretary of the Company.
iii. Name availability letter received from ROC in original for change
of name.
iv. Old set of Memorandum and Articles of Association with
Certificate of Incorporation and all subsequent certificates if any
obtained for change of name duly certified as true by a Director
or Secretary of the Company if any.
v. In case, any Special Resolution u/s 17 for alteration of objects
clause is passed simultaneously, then a printed copy of the
Memorandum of Association as altered (not by way of pasting
slips) with new objects but with existing name of the Company
duly certified as true by a Director or Secretary of the Company.
vi. Where change of name is sought for on account of change of
objects clause, a copy of certificate for alteration of object clause
already obtained from ROC duly certified as true by a Director or
Secretary of the Company with a certificate from a Chartered
Accountant or Company Secretary in practice regarding
commencement of the new activity.
vii. Power of attorney in favor of a person well versed in Company
Law matters.
viii. If the Company is a Private Company, it must also file Form
No.23 in respect of Special Resolution passed for alteration in the
Articles of Association u/s 31 to add the clause (d) of Section 3(i)
(iii) of the Companies (Amendment) Act, 2000 at the time of
filing the above documents along with necessary enclosures
thereto.
ix. Where the proposed name change includes words "Software" or
"Infotech", relevant clause in the objects clause of Memorandum
of Association empowering the company to carry on software /
infotech activities must be mentioned in the application.
x. A certificate from a Chartered Accountant / Company Secretary
in practice mentioning the total income generated by the
company during the last 15 months giving details of the income
derived from Software / Infotech business. The application may
be allowed only if substantial income is generated from
Software / lnfotech activities.
3. Foreign companies.
The Bill lays down that provisions of the Companies Act for deemed
public company, i.e. private companies which are treated as public
companies under the Act, will not apply from the effective date of the
new law. It is significant that the position of the existing deemed public
company will not undergo any change. (Section 43 A)
3. Registered office
Bibliography:
Elements of Business Law: - Professor in Law R.W. LALWANEY
www.indiainfoline.com
www.laws4india.com
www.soulkurry.com
Economic Times
Business Times.