Formation and Incorporation of the company
Incorporation of the company , According to L.J bowen, The term promoter is the term not of the law but of bussiness usefully summing up in a tringle world a number of business operation financial to commercial world by which a company is generally brought into existence in the firm promotion such refers to the process by which the idea of forming of a company takes a definate shape resulting in its incorporation. Incorporation in the company.
Incoporation of the company by the following mentioned in the below
- Promotion
- Incorporation
- capital
- commencement of the businesses
Steps of incorporation of the company
- Approval of the proposed names : A company can choose any name but it should not closely resemble the name of enacting comapny. Incorporation of the company.
- Filing of the document
- Memorandum of association
- article of association
- orginal letter of approval
- list of director
- listen consent as the director
- notice of the address of the registered office
- statutary declaration
- Issue of prospectus
- A prospectus contain all essential point which would induced the investing public to apply for the share in the company. A coipy prospectus must be delivered to the register before issuing to the public.
- Minimum subscription
- A company can proceed to a lot shares only is minimum subscription specified in prospectus has been collected in cash.
- Siling of further document
- A further document is filed only when their is a requirement of declaration.
- Certificate of corporation
- On registration the registoar will issue a certificate of incorporation where by he certified that the company is incorporated.
- Certificatr of commencement of bussiness
- privatr company may commence immediately on incorporation but a public canot commence bussiness in loss it has obtain a COC of the business from the registror.
Memorandum of association of the company
It is the charter of the company in the case Ashbury railway carriage company v/s riche, 1875, In this case memorandum was defined by lord coirns, he defines memorandum as the charter of the company which defines the limitation of the power of the company.
Doctrine of ultravires in memorandum
In section 2(56) of this act. IN section 13 alternation of memorandum, memorandum of association is public document under section 399.( Inspection, production and evidence of document kept by registrar).
Importance of memorandum
The main purpose of the memorandum is to unable its shareholder, creditors and all those who deal with the company to known what its powers and what is the range of behaviour. No comapny can be registered without the memorandum format is given in Schedule first.
Schedule first(Table A to table E)
- Name clause section 4(1),4(2), 12(3)
- refistered clause section 12(2)
- objective clause section 4(1) c
- liability clause
- subscription clause
- capital clause.
name clause: section 4(1)
Which says that if company is a public company it has to put limited after its name, If it is aprivate company the company has to put private limited after its name.
section 4(2)- it tells the restrictions
section 12(3)- labellimg of the name.
JUdiacial singnificance of registered office clause :
- To determined the domicile and the nationality of the company.
- A company might have not been a citixenship but it must have a nationality.
- to determine the jurisdiction of the court governing a company.
- to determined the registration of the company (ROC) to be reparted by the company.
Reason/ object/ rational of object clause:
object clause sets the boundary within which the company must operate. Company cannot under take any activity which is not specified in its object clause.
Capital clause:
this clause estates the amount of share capitals which the company register and its modes of its division into shares of their value.
Nomination clause section 4(1)(f)
This is a new clause inserted in the company act 2013 this clause is applicable only for one person company, according to this clause the memorandum must specified the name of the person who becomes member in the event of the death of the subscriber.
Reference : original note written by Riya Tiwari student of LLB of United university Prayagraj Uttar Pradesh.