Incorporation of Various Types of Companies -Part II

HIMANSHU 25 Aug 2019 1,338 Views 0 comment Print Company Law | Articles

C. Incorporation of Nidhi Company:

A Person (or an Association of Persons), desirous of incorporating a Nidhi Company has to make an application for the purpose, with the Registrar within whose jurisdiction the registered office of the company is proposed to be situated, in e-Form No. INC-32 (SPICe).

All the documents which are required to be filed in case of Incorporation of Pvt. or Pub. Co. (as mentioned in ‘Section-A of PART-I’ of this Article) are to be filed in case of Incorporation of Nidhi company also but with the following exceptions:

1. “Nidhi” means a company which has been incorporated as a Nidhi with the object of cultivating the habit of thrift and saving amongst its members, receiving deposits from, and lending to, its members only, for their mutual benefit, and which complies with the rules made by the central Government for regulation of such class of companies.

2. A Nidhi incorporated under the Act on or after the commencement of the Nidhi (Amendment) Rules, 2019 shall file Form NDH-4 within 60 Days from the date of expiry of:-

a) one year from the date of its incorporation or

b) the extended period as has been granted by the Regional Director on making application in this regard.

Provided further that nothing in the first proviso shall prevent a Nidhi from filing Form ‘NDH-4’ before the period referred therein.

In case a company does not file Form NDH-4 within above given period, it shall not be allowed to file Form SH-7 (Notice to Registrar of any alteration of share capital) and Form PAS-3 (Return of Allotment).

3. A Nidhi shall be a Public Company and shall have a minimum paid up Equity Share Capital of 5 Lakh Rupees.

4. Every Nidhi shall issue Fully Paid-up Equity Shares of the Nominal Value of not less than 10 Rupees each.

5. Every Nidhi shall allot to each Deposit Holder at least a Minimum of 10 Equity Shares or shares equivalent to One Hundred Rupees.

6. On and after the commencement of the Act, no Nidhi shall issue preference shares. And If preference shares had been issued by a Nidhi before the commencement of this Act, such preference shares shall be redeemed in accordance with the terms of issue of such shares.

7. No Nidhi shall have any object in its Memorandum of Association other than the object of cultivating the habit of thrift and savings amongst its members, receiving deposits from, and lending to, its members only, for their mutual benefit.

8. Every “Nidhi” shall have the last words ‘Nidhi Limited’ as part of its name.

9. Every Nidhi shall, within a period of one year from the date of its incorporation, ensure that it has-

a) Not less than 200 members;

b) Net Owned Funds of 10 Lakh rupees or more;

c) Unencumbered term deposits of not less than 10 per cent. of the outstanding deposits;

d) Ratio of Net Owned Funds to deposits of not more than 1:20.

10. Within ninety days from the close of the first financial year after its incorporation and where applicable, the second financial year, Nidhi shall file a return of statutory compliances in Form NDH-1 with the Registrar duly certified by a Company Secretary in Practice/ a Chartered Accountant in Practice/ Cost Accountant in Practice.

11. If a Nidhi is not complying with the conditions of “Having Not less than 200 Members” or “Ratio of Net Owned Funds to deposits of not more than 1:20”, it shall within 30 Days from the close of the first financial year, apply to the Regional Director in Form NDH-2, for extension of time and the Regional Director may consider the application and pass orders within thirty days of receipt of the application.

[Provided that the Regional Director may extend the period upto 1 year from the date of receipt of application.]

12. Restriction on Membership:

a) No Body Corporate or Trust can become member of a Nidhi Company.

b) Every Nidhi shall ensure that its Membership is not reduced to less than 200 at any time.

c) A Minor shall not be admitted as a member of Nidhi Company But the Deposits may be accepted in the name of a minor, if they are made by the Natural or Legal Guardian who is a member of Nidhi.

13. Restriction on Directorship:

a) The Director shall be a member of Nidhi.

b) The Director of a Nidhi shall hold office for a term up to 10 consecutive years on the Board of Nidhi.

c) The Director shall be eligible for re-appointment only after the expiration of 2 years of ceasing to be a Director.

d) Where the tenure of any Director in any case had already been extended by the Central Government, it shall terminate on expiry of such extended tenure.

D. Incorporation of One-Person Company:

A Person, desirous of incorporating a Sole-Owned Company has to make an application for the purpose, with the Registrar within whose jurisdiction the registered office of the company is proposed to be situated, in e-Form No. INC-32 (SPICe).

All the documents which are required to be filed in case of Incorporation of Pvt. or Pub. Co. (as mentioned in ‘Section-A of PART-I’ of this Article) are to be filed in case of Incorporation of One-Person Company also but with the following exceptions:

[PART-I of this Article can be viewed at:

https://taxguru.in/company-law/incorporation-types-companies-part-i.html

1. Only a Natural Person who is an Indian Citizen and Resident in India:

a) shall be eligible to incorporate ‘a’ One Person Company;

(‘a’ here used means only 1 OPC can be formed by 1 Person)

b) shall be a nominee for the sole member of a One Person Company.

Here, 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 financial year; and while counting the number of days of stay of a director in India for the financial year 2018-2019, any period of stay between 01.01.2018 till the date of notification of this rule i.e. 27.07.2018 shall also be counted]

2. A natural person shall not be member of more than a OPC at any point of time and the said person shall not be a nominee of more than a OPC.

3. Where a Natural Person, being member in an OPC, also becomes a member in another OPC, by virtue of his being a nominee in that OPC, such person shall need to choose within a period of 180 Days, that in which company he would like to continue his sole-membership and after choosing one, he shall cease to be member in other company.

4. The subscriber to the memorandum of a One Person Company shall nominate a person, after obtaining his prior written consent in Form-INC-3; and In the event of the subscriber’s death or his incapacity to contract, that Nominee only shall become the member of that One Person Company.

5. Such Nomination has to be filed with the Registrar at the time of Filing Incorporation Form of the company along with its memorandum and articles.

6. Changes in Nominee:

a) The person nominated by the Sole-member of OPC may, withdraw his consent by giving a notice in writing to such Sole-member as well as to the One Person Company. And after obtaining such notice of withdrawal of Consent by Nominee, the sole member is required to appoint another person as his nominee, within 15 Days of the receipt of the notice of withdrawal and shall send an intimation of such nomination in writing to the Company, along with the written consent of such other person so nominated in Form No. INC-3.

b) The Company shall within 30 Days of receipt of the withdrawal of previous nominee’s consent, file with the Registrar, such withdrawal notice of previous nominee and the intimation about appointment of another person as nominee and the written consent of such new nominee in Form INC-3, in the e-Form INC-4.

c) The Sole-member of an OPC may also, by intimation in writing to the company, change the name of the Nominee at any time for any reason (including in the case of death or incapacity to contract of nominee) and nominate another person after obtaining his prior written consent in Form No INC-3:

d) The company shall within 30 Days of receipt of intimation of the change, file with the Registrar, the written consent of such new nominee in Form INC-3, in the e-Form INC-4.

e) Where the Sole-member of an OPC ceases to be the member, in the event of death or incapacity to contract and afterwards his nominee becomes the member of such OPC, then such new member (that Ex-nominee) shall nominate his New Nominee within 15 Days of becoming member, and that newly appointed nominee shall, in the event of death of member or incapacity of member to contract, become the member of such OPC.

f) The company shall within 30 Days of the change in membership, file with the Registrar, the written consent of such newly appointed nominee in Form INC-3, in the e-Form INC-4.

[Note: Any such change in the Name of the Person (Nominee) in the manner mentioned above in points (a) to (f), shall not be deemed to be an Alteration of the Memorandum of Association. So, procedure regarding Alteration of the Memorandum of Association is not required to be complied with].

7. A Minor can neither become member or nominee of the OPC nor can hold share with beneficial interest.

8. An OPC also cannot be incorporated / converted itself into a company under Section 8 of the Act.

9. An OPC also cannot carry out Non-Banking Financial Investment activities including investment in securities of any body corporate.

10. No OPC can convert voluntarily into any kind of company unless 2 years are expired from the date of incorporation of One Person Company, Except in the situation:

– When threshold limit i.e. Paid-up share capital is increased beyond 50 Lakh Rupees or

– its Average Annual Turnover during the relevant period exceeds 2 Crore Rupees

E. Incorporation of Companies Capable of Being Registered:

Here, the word ‘Company’ includes any Partnership Firm, Limited Liability Partnership, Cooperative Society, Society or Any Other Business Entity formed under any other law for the time being in force which applies for registration under Section 366 of this act.

Any company formed (whether before or after the commencement of Companies Act, 2013), in pursuance of any law of Parliament other than this act and consisting of 2 or more members, may at any time Register under this Act

– As an Unlimited Company; or

– As a Company Limited by Shares; or

– As a Company Limited by Guarantee,

in the same manner as followed in the case of Incorporation of Pvt. or Pub. Co. (as mentioned in ‘Section-A of PART-I’ of this Article)

In addition to the above, the following requirement has also to be fulfilled for the purpose of Registration of Companies under Section 366:

1. A company shall attach and provide the required documents and information to the Registrar along with e-Form No. URC. 1 in the following manner, namely:-

a) In case of an application by a Limited Liability Partnership or Firm for registration as a company limited by shares/ company limited by guarantee/ an unlimited company –

(i) Names, Addresses, and Occupations of all the Partners (who on a day, not being more than six clear days before the day of seeking registration, were partners of the Limited Liability Partnership or firm) with details of shares held by them respectively, showing separately shares allotted for consideration either in cash or other than cash, along with the source of consideration and Distinctive No. (if any);

(ii) Particulars of persons proposed as the first directors of the company, (along with DIN), Proof of Identity, Proof of Residence and their Interests in other firm or body corporate in the Form MBP-1 along with their consent to act as directors of the company in the Form DIR-2;

(iii) Latest Deed of Partnership, Bye-Laws or other instrument constituting or regulating the firm, along with the Certificate of the Registration issued by the Registrar of Firms, in case the firm is registered OR Incorporation Certificate of LLP, in case of LLP;

(iv) No Objection Certificate from all the secured creditors of the applicant;

(v) Approval from the Majority of members, whether present in person or by proxy at a general meeting, agreeing for such Registration;

(vi) an Undertaking that the proposed directors shall comply with the requirements of the Indian Stamp Act, 1899 (2 of 1899) as applicable;

(vii) a copy of the Latest Income Tax Return of the Limited Liability Partnership / Firm, as the case may be.

(viii) in the case of a company intended to be registered as a company limited by guarantee, then a copy of the Resolution declaring the Amount of Guarantee.

b) In case of an application by a society/ a trust for registration as a company limited by guarantee under section 8–

(i) Names, Addresses, and Occupations of all Persons (who on a day, not being more than six clear days before the day of seeking registration, were members of the society/ were trustees of the trust) along with proof of membership;

(iii) a list containing the names and addresses of the Members of the Governing Body of the society;

(iv) a Certified Copy of the Certificate of Registration of the society and the memorandum & bye-laws/ Certificate of Registration of the trust and the Trust Deed;

(v) No Objection Certificate from all the secured creditors of the applicant;

(vi) Approval from the Majority of members, whether present in person or by proxy at a general meeting, agreeing for such Registration; and the resolution shall also provide for Declaration of the amount of Guarantee;

(vii) an Undertaking that the proposed directors shall comply with the requirements of the Indian Stamp Act, 1899 (2 of 1899) as applicable;

(viii) a copy of the Latest Income Tax Return of the society/ trust;

(ix) Details of the Objects of the company alongwith a declaration from all the members that the restrictions and prohibitions as mentioned in clause (b) and clause (c) of sub-section (1) of section 8 of the Act shall be complied.

2. Where an application is made by a society or trust for registration as a company limited by guarantee and it has been proved to the satisfaction of the Registrar that the proposed company has its objects as required to be in the case of a Section 8 Company, the Registrar shall issue a License in Form No. INC. 16 to allow such society or trust to be registered as a Limited Company without the addition to its name of the word “Limited” or the words “Private Limited” and thereupon issue a Certificate of Incorporation.

[Provided further that a society which has not filed the annual or other returns, statutorily required to be filed with the Registrar of Societies, shall not be eligible to apply for registration under section 366 of the Act].

3. An undertaking from all the Members or Partners or Trustees providing that in the event of registration as a company under Part I of Chapter XXI of the Act, necessary documents or papers shall be submitted to the registering or other authority with which the company was earlier registered, for its dissolution.

[Provided that no such undertaking shall be required to be submitted in case the application for registration under Part I of Chapter XXI of the Act has been made by a Limited Liability Partnership registered under the Limited Liability Partnership Act, 2008 (6 of 2009)].

4. The list of members and directors and any other particulars relating to the company which are required to be delivered to the Registrar shall be duly verified by the declaration of any two or more proposed directors.

5. All property, movable and immovable (including actionable claims), belonging to or vested in a company at the date of its registration in pursuance of this Part, shall, on such registration, pass to and vest in the company as incorporated under this Act for all the estate and interest of the company therein.

6. The registration of a company in pursuance of this Part shall not affect its rights or liabilities in respect of any debt or obligation incurred, or any contract entered into, by, to, with, or on behalf of, the company before registration.

7. Where an order has been made for winding up, or a provisional liquidator has been appointed for a company registered in pursuance of this Part, no suit or other legal proceeding shall be proceeded with or commenced against the company or any contributory of the company in respect of any debt of the company, except by leave of the Tribunal and except on such terms as the Tribunal may impose.