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Incorporation under CA, 2013 & proposed by Companies Law Committee

The memorandum of a company shall state—the objects for which the company is proposed to be incorporated and any matter considered necessary in furtherance; Section 4(1)(c) should be amended appropriately, to allow companies the additional option to have a generic object clause, i.e., to engage in any lawful act or activity or business as per the law for the time being in force in the MOA.

CS Manohar Mishra

Incorporation provisions under the Companies Act, 2013 (the Act) and proposed by the Companies Law Committee (CLC)

Section No. Provision under the Companies Act, 2013 Recommendation of Company Law Committee Remarks
4(1)(c)-Memorandum (Object Clause) The memorandum of a company shall state—the objects for which the company is proposed to be incorporated and any matter considered necessary in furtherance; Section 4(1)(c) should be amended appropriately, to allow companies the additional option to have a generic object clause, i.e., “to engage in any lawful act or activity or business as per the law for the time being in force” in the MOA. This amendment will remove the practical difficulties facing at the time of Incorporation of companies, Name approval & allotment of Corporate Identity Number for a company with multiple objects.

 

4(5)(i)-Name Reservation period Upon receipt of an application under sub-section (4), the Registrar may, on the basis of information and documents furnished along with the application, reserve the name for a period of sixty days from the date of the application. Upon receipt of an application under sub-section (4), the Registrar may, on the basis of information and documents furnished along with the application, reserve the name for a period of twenty days from the date of the approval, and simultaneously, the fees for such reservation be reduced to Rupees Five Hundred. The changed process for centralised processing of name reservation/approval has already been implemented.
7(1)(c)-Affidavit from Subscribers an affidavit from each of the subscribers to the memorandum and from persons named as the first directors, if any, in the articles that he is not convicted of any offence in connection with the promotion, formation or management of any company, or that he has not been found guilty of any fraud or misfeasance or of any breach of duty to any company under this Act or any previous company law during the preceding five years and that all the documents filed with the Registrar for registration of the company contain information that is correct and complete and true to the best of his knowledge and belief; Self declaration from each of the subscribers to the memorandum and from persons named as the first directors, if any, in the articles that he is not convicted of any offence in connection with the promotion, formation or management of any company, or that he has not been found guilty of any fraud or misfeasance or of any breach of duty to any company under this Act or any previous company law during the preceding five years and that all the documents filed with the Registrar for registration of the company contain information that is correct and complete and true to the best of his knowledge and belief; 1. a wrong declaration carries a stiff punishment under the Act.;

2. This will leads to unnecessary delays in Incorporation process of companies.

12(1)-Registered Office A company shall, on and from the fifteenth day of its incorporation and at all times thereafter, have a registered office capable of receiving and acknowledging all communications and notices as may be addressed to it. A company shall, on and from the Thirty day of its incorporation and at all times thereafter, have a registered office capable of receiving and acknowledging all communications and notices as may be addressed to it. This provision removes the difficulties regarding the Registered Office at such a shorter period.
12(4)-Notice of change in Registered Office Notice of every change of the situation of the registered office, verified in the manner prescribed, after the date of incorporation of the company, shall be given to the Registrar within fifteen days of the change, who shall record the same

 

Notice of every change of the situation of the registered office, verified in the manner prescribed, after the date of incorporation of the company, shall be given to the Registrar within Thirty days of the change, who shall record the same Lease deeds, rent agreement and other documents can be notarized and can be submitted easily in such longer period.
21-Authentica-

tion of

documents,

proceedings

and contracts.

 

Save as otherwise provided in this Act,—

(a) a document or proceeding requiring authentication by a company; or

(b) contracts made by or on behalf of a company, may be signed by any key managerial personnel or an officer of the company duly authorised by the Board in this behalf.

Save as otherwise provided in this Act,—

(a) a document or proceeding requiring authentication by a company; or

(b) contracts made by or on behalf of a company, may be signed by any employee of the company duly authorised by the Board in this behalf.

1. This will leads to remove the difficulties of presence of top level/KMP at the time of signing of documents;

2. Employee will get more power.

Section 3(1)-Effect of number of members falling below the minimum requirement It provides for minimum number of person required for formation of a company.

 

1.to provide for consequences of number of members falling below the prescribed minimum i.e. fastening the continuing members with the liability for all the debts incurred by the company till the prescribed minimum is restored

2.provision may also be made for the maximum period of 6 months within which the default shall be made good failing which the violation of the law is triggered.

It will encourage the continuing members to increase the minimum number that is required to run a company.

Author: CS Manohar Mishra-Associate Member of the ICSI & a Commerce Graduate from Calcutta University, he can be contacted at csmanoharmishra@gmail.com

Categories: Company Law
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