WELCOME TO

INDIAN COMPANIES ACT

PART II

Companies Act Part II 1

 PROCEDURE FOR
INCORPORATION OF A COMPANY

For a company to be incorporated, it

must be registered with the
“Registrar Of Companies” (ROC).
After the company is registered, it
receives a “Certificate Of
Incorporation” after which the
company becomes a legal entity.
Companies Act Part II 2
 Registration of the
Documents to be filed with ROC
2. The Memorandum of Association
3. The Articles Of Association
4. An agreement, if any, which the company proposes to
enter into with any individual for appointment as its
managing director or whole-time director or manager.
5. *A statutory declaration in Form 1 that the
requirements of the Companies Act have been
complied with in respect of the registration of the
company and matters precedent and incidental thereto.

* [by a practising Advocate, of a High Court or a company

secretary or Chartered Accountant in whole-time practice
OR

Companies Act Part II 3

 Additional Documents
(In case of a Public Company)

• Written consent of directors in Form

29 to agree to act as directors
• The complete address of the
registered office of the company in
Form 18
• Details of the directors, managing
director and manager the company
in Form 32.

Companies Act Part II 4

Memorandum of Association

It is the basic document which contains

3. The objectives of the company.

4. The business activity (ies) the
company is authorised to undertake.
5. Location of the Registered Office.
6. Capital structure of the Company.

Companies Act Part II 5

 The Articles of
Association
Contains:
3. The rules and regulations for the
internal administration of the
company.
4. It includes bye laws relating to the
management of the company.

Companies Act Part II 6

Certificate of Incorporation

Issued by the Registrar of Companies

under his seal and signature after
the afore mentioned documents are
submitted to him and
the same were scrutinized by the
RoC.

Companies Act Part II 7

Notice of Registered Office

After obtaining the Certificate of

Incorporation,
the Company Secretary must send
the notice
of registered address of the company,
if it was not sent earlier,
within 30 days of registration.
Companies Act Part II 8
 Commercial Operations
1.A “Private Company” is eligible to
transact business, on obtaining the
incorporation certificate, The private
company is now incorporated.
2.A “Public Company”, however cannot
transact business unless it obtains a
‘trading certificate‘
(also known as “Certificate of Commencement of
Business”)

Companies Act Part II 9

Management of a Company

A company being a body corporate

is managed and run by a Board

The Board is comprised of Directors

Directors are appointed under the
mandate of the members or share
holders

Companies Act Part II 10

 Definition of "member"
According to Section 41 of the Act,
(1)The subscribers of the memorandum of a
company shall be deemed to have agreed to
become members of a company, and on its
registration, shall be entered as members in its
register of members.
2) Every other person who agrees in writing to
become a member of a company and whose
name is entered in its register of members,
shall be a member of the company.
3) Every person holding equity share capital of a
company and whose name is entered as
beneficial owner in the records of the
depository shall be deemed to be a member of
Companies Act Part II 11
Minimum number of Directors
(Sec. 252)
1 Every public company shall have at
least
three directors:
2.A public company having,-
(a) a paid-up capital of five crore
rupees or more;
(b) one thousand or more small
shareholders,
may have a director elected by such
Companies Act Part II 12
 Minimum number of
Directors
3. Every [other] company shall have at
least two directors.

[Explanation.-For the purpose of this

sub-section "small shareholder" means
a shareholder holding shares of nominal
value of twenty thousand rupees or less
in a public company]
Companies Act Part II 13
 THE “BOARD”

The directors of a company

collectively are referred to as the
"Board of directors" or "Board".
  Only individuals to be directors
• Section 253 lays that no body
corporate, association or firm shall
be appointed director of a company,
and only an individual shall be so
appointed.
Companies Act Part II 14
Appointment of Directors
Proportion of those who are to retire
by rotation

Unless all Directors to retire, as

provided for in the
Articles of Association, at least two
thirds of the total
number directors of a public company
shall be
appointed in the Annual General
Companies Act Part II 15
 Nominated Directors

Where the Articles of the Company so

authorize
A financial Institution which has
advanced huge
loans to a company, may induct a
DIRECTOR
on the board of the Company.
Such Directors are referred to as
Companies Act Part II 16
 Management
The affairs of a company are managed
by the
Board of Directors.
It is customary that a Managing
Director is
appointed to head the management of
a
company.
Necessary Administrative and Financial
Companies Act Part II 17
 Managing Director
A person entrusted with any powers of
the
Management (Section 226)
Exercises some or all powers and
functions of
the Directors in managing the
company,
as delegated by virtue of an
agreement,
resolution or other documents,
Companies Act Part II 18
 How a MD is appointed?
1. By an agreement with the company
2. By the Resolution of Board of
Directors
3. By the Resolution passed by the
company
4. at the Annual General Meeting
5. By the Memorandum of Association
6. By the Articles of Association
Companies Act Part II 19
 Day to day Management
The Board of Directors or with the
approval of
the Board, the Managing Director or any
other
Director,
can be vested with the powers to appoint
such
Officers and employees as necessary
for the functions, business and activities
of the
company,
Companies Act Part II 20
 End of Part II

THANK
YOU!
Companies Act Part II 21