REVISION SERIES FOR COMPANY LAW FOR 2019 1

·         REVISION SERIES FOR COMPANY LAW  FOR 2019 1

·         SHORT QUESTIONS

• CORPORATE LEGAL FRAMEWORK
• DR. SAHSHI AGGARWAL

•     MEANING OF COMPANY

•     THE WORD COMPANY HAS NO STRICT OR TECHNICAL OR LEGAL MEANING

•     A COMPANY IN THE NORMAL SENSE MEANS AN ASSOCIATION OF PERSONS UNITED FOR A COMMON OBJECT

•     LORD JUSTICE LINDLEY :

1.        A COMPANY IS AN ASSOCIATION OF MANY PERSONS

2.       WHO CONTRIBUTED MONEY OR MONEY’S WORTH

3.       TO A COMMON STOCK

4.       EMPLOYED FOR A COMMON PURPOSE AND WHO SHARES THE PROFIT OR LOSS

5.       THE COMMON STOCK SO CONTRIBUTED IS DENOTED IN MONEY AND ITS CAPITAL OF THE COMPANY

6.       THE PERSON WHO CONTRIBUTE IT TO WHOM IT BELONGS ARE MEMBERS

7.       THE PROPORTION OF CAPITAL TO WHICH EACH MEMBER IS ENTITLED IS HIS SHARE

8.       SHARES ARE ALWAYS TRANSFERABLE ALTHOUGH THE RIGHT TO TRANSFER IS OFTEN MORE OR LESS RESTRICTED

•     MEANING OF COMPANY

•     SECTION 2( 20 ) OF THE COMPANIES ACT 2013 PROVIDES THAT A COMPANY MEANS A COMPANY INCORPORATED UNDER THIS ACT OR UNDER ANY PREVIOUS COMPANY LAW

1.       COMPANY IS AN VOLUNTARY ASSOCIATION OF PERSONS WHO ARE FORMED FOR THE PURPOSE OF DOING BUSINESS HAVING A DISTINCT NAME AND LIMITED LIABILITY

2.       IT IS JURISTIC PERSON HAVING A SEPARATE LEGAL ENTITY DIFFERENT FROM ITS MEMBERS WHO CONSTITUTE IT

3.       CAPABLE OF RIGHTS AND DUTIES OF ITS OWN AND ENDOWED WITH THE POTENTIAL OF PERPETUAL SUCCESSION.

•     MEANING OF PRIVATE LIMITED COMPANY

•     ACCORDING TO SECTION 2(68 ) OF THE COMPANIES ACT,2013

•     PRIVATE COMPANY MEANS A COMPANY HAVING A MINIMUM PAID UP SHARE CAPITAL AS MAY BE PRESCRIBED ANDWHICH BY ARTICLES

•               RESRICT THE RIGHT TO TRANSFER ITS SHARES

•               EXCEPT IN CASE OF ONE PERSON COMPANY THE LIMIT THE NUMBER OF MEMBERS TO 200

1.       PROVIDED THAT FURTHER THAT PERSON WHO ARE IN THE EMPLOYMENT OF THE COMPANY  AND

2.       PERSONS WHO HAVING BEEN FORMERLY IN THE EMPLOYMENT OF THE COMPANY WERE MEMBERS OF THE COMPANY WHILE IN EMPLOYMENT AND HAVE CONTINUED TO BE MEMBERS AFTER THE EMPLOYMENT CEASED. SHALL NOT BE INCLUDED IN THE NUMBER OF MEMBERS

•               PROHIBITS ANY INVITATION TO THE PUBLIC TO SUBSCRIBE FOR ANY SECURITIES OF THE COMPANY

•     PUBLIC LIMITED COMPANY

•     ACCORDING TO SECTION 2 (71 ) OF THE COMPANIES ACT ,2013

PUBLIC COMPANY MEANS A COMPANY WHICH

1. IS NOT A PRIVATE COMPANY
2. HAS A MINIMUM PAID UP SHARE CAPITAL AS MAY BE PRESCRIBED

3.       PROVIDED THAT A COMPANY WHICH IS A SUBSIDIARY OF A COMPANY ,NOT BEING A PRIVATE COMPANY, SHALL BE DEEMED TO BE PUBLIC COMPANY FOR THE PURPOSE OF THIS ACT EVEN WHERE SUCH SUBSIDIARY COMPANY CONTINUES TO BE PRIVATE COMPANY IN ITS ARTICLES.

•     HOLDING COMPANY

•     ACCORDING TO SECTION 2 (46 ) OF THE COMPANIES ACT 2013, HOLDING COMPANY IN RELATION TO ONE OR MORE OTHER COMPANIES, MEANS A COMPANY OF WHICH SUCH COMPANIES ARE SUBSIDIARY COMPANIES.

•     HERE COMPANY INCLUDES ANY BODY CORPORATE

•     HOLDING COMPANY IS A CORPORATION ORGANIZED TO HOLD THE STOCK OF ANOTHER OR OTHER CORPORATION

•     WHEN A COMPANY HAS CONTROL OVER ANOTHER COMPANY

•     IT IS KNOWN AS A HOLDING COMPANY

•     HOLDING COMPANY

•     UNDER ANY OF THREE FOLLOWING CIRCUMSTANCES SHOULD BE CALLED A HOLDING COMPANY OF THE OTHER COMPANY ,IF

1.       IT CONTROLS THE COMPOSITION OF THE BOARD OF DIRECTORS

2.       IT IS CONTROLLING THE AFFAIRS OF THE COMPANY WHICH IS ALSO CONTROLLING THE AFFAIRS OF SOME OTHER COMPANY

3.       ITS PREFERENCE SHAREHOLDER HAVE THE SAME VOTING RIGHTS  AS GIVEN TO EQUITY SHAREHOLDERS AND THEY CONTROL MORE THAN HALF THE TOTAL VOTING POWER OF ANOTHER COMPANY

•     SUBSIDIARY COMPANY

•     ACCORDING TO SECTION 2 (87) OF THE COMPANIES ACT.2013,SUBSIDIARY COMPANY OR SUBSIDIARY IN RELATION TO OTHER COMPANY

 ( THAT IS TO SAY THE HOLDING COMPANY ),MEANS A COMPANY IN WHICH THE HOLDING )

1.       CONTROLS THE COMPOSITION OF THE BOARD OF DIRECTORS OR

2.       EXERCISES OR CONTROLS MORE THAN ONE HALF OF THE TOTAL VOTING POWER EITHER AT ITS OWN OR TOGETHER WITH ONE OR MORE OF ITS SUBSIDIARY COMPANIES

3.       EXERCISES MORE THAN ONE HALF OF THE TOTAL VOTING POWER EITHER AT ITS OWN OR TOGETHER WITH ONE OR MORE OF ITS SUBSIDIARY COMPANIES

•     PROVIDED THAT SUCH CLASS OR CLASSES OF HOLDING COMPANIES AS MAY BE PRESCRIBED SHALL NOT HAVE LAYERS OF SUBSIDIARIES BEYOND SUCH NUMBERS AS MANY BE PRESCRIBED

•     FOR THE PURPOSE OF THIS CLAUSE :

1.       A COMPANY SHALL BE DEEMED TO BE A SUBSIDIARY COMPANY OF THE HOLDING COMPANY EVEN IF THE CONTROL REFERRED TO IN SUB CLASUE (I) OR SUB CLASUE (II) IS OF ANOTHER SUBSIDIARY COMPANY OF THE HOLDING COMPANY

2.       THE COMPOSITION OF THE COMPANY BOD SHALL BE DEEMED TO BE CONTROLLED BY ANOTHER COMPANY IF THAT OTHER COMPANY BY EXERCISE OF SOME POWER EXERCISABLE BY ITS DISCRETION CAN APPOINT OR REMOVE ALL OR MAJORITY OF THE DIRECTORS

3.       THE EXPRESSION COMPANY INCLUDES ANY BODY CORPORATE

4.       LAYER IN RELATION TO HOLDING COMPANY MEANS ITS SUBSIDIARY OR SUBSIDIARIES

•     MEANING OF PROMOTER

1.       THE TERM PROMOTER IS NOT DEFINED IN THE LAW

2.       ALL THE BUSINESS OPERATION NECESSARY TO BRING A COMPANY INTO EXISTENCE ARE CALLED PROMOTION

3.       PROMOTER IS THE FIRST PERSON WHO CONTROLS OR INFLUENCE THE COMPANY’S AFFAIRS

4.       PERSON WHO INITIATES THE PROMOTION OF THE COMPANY ARE KNOWN AS PROMOTERS

5.       PROMOTERS OF A COMPANY IS A PERSON WHO EMPLOYS HIMSELF IN THE PRELIMINARY WORK NECESSARY TO THE FLOTATION OF A COMPANY

•     DEFINITION OF PROMOTER

•     PROMOTER IS A PERSON WHO UNDERTAKES A NUMBER OF BUSINESS OPERATIONS TO BRING A COMPANY INTO EXISTENCE AND SET IT GOING

•     F. B PALMER,” PROMOTERS OF A COMPANY AS THOSE WHO FORMS OR FLOAT IT, THAT S TO SAY, THE LEADING SPIRITS OF ENTERPRISE OR PRINCIPAL ACTORS

•     ACCORDING TO SECTION 2 ( 69) OF THE COMPANIES ACT ,2013, PROMOTER MEANS A PERSON :-

1.       WHO HAS BEEN NAMED AS SUCH IN A PROSPECTUS OR IS IDENTIFIED BY THE COMPANY IN THE ANNUAL RETURN REFERRED TO SECTION 92 OR

2.       WHO HAS CONTROL OVER THE AFFAIRS OF THE COMPANY, DIRECTLY OR INDIRECTLY WHETHER AS A SHAREHOLDERS ,DIRECTORS OR OTHERWISE OR

3.       IN ACCORDANCE WITH WHOSE ADVICE ,DIRECTION OR INSTRUCTION THE BOARD OF THE DIRECTORS IS ACCUSTOMED TO ACT. IT WILL NOT APPLY TO PERSON WHO IS ACTING MERELY IN PROFESSIONAL CAPACITY

•     MEANING OF CORPORATE VEIL

•     ANSWER:-IN JOINT STOCK COMPANY THERE IS SEPARATION OF OWNERSHIP AND MGMT. COMPANY IS AN ARTIFICIAL ENTITY AND CREATED BY LAW HAS A SEPARATE ENTITY FROM ITS MEMBERS. THAT PRINCIPLE OF SEPARATE ENTITY IS REGARDED AS CURTAIN/A VEIL/SHIELD BETWEEN THE COMPANY AND ITS MEMBERS. PROVIDES PROTECTION TO MEMBERS FROM THE LIABILITY OF THE COMPANY.
THE CONCEPT OF SEPARATE ENTITY AIMS TO PROMOTE THE TRADE AND COMMERCE BUT NOT TO COMMIT ILLEGALITIES OR CHEAT PEOPLES.WHEN THE COMPANY IS INCORPORATED ,COMES INTO EXISTENCE. IT BECOMES THE SEPARATE ENTITY DIFFERENT FROM ITS MEMBERS. IT CAN SUE AND BE SUED IN ITS OWN NAME. THIS RULE WAS FRAMED IN CASE SALOMON VSALOMON&CO

•     CORPORATE VEIL

•     BUT SOMETIMES THIS CONCEPT OF SEPARATE PERSONALITY IS USED TO DEFRAUD OR ILLEGAL ACTIVITIES AND THEN IN THESE SITUATIONS THE CORPORATE VEIL IS LIFTED TO KNOW THE REAL CULPRIT. IT IS KNOWN AS LIFTING THE CORPORATE VEIL.AND IT CAN BE LIFTED FOR THE BENEFIT OF COMPANY TOO
THE CIRCUMSTANCES UNDER WHICH THE COURT MAY LIFT THE CORPORATE VEIL BE LIFTED:-

1.       COMMON LAW EXCEPTIONS

2.       STATUTORY EXCEPTIONS

•     ULTRAVIRES ACTS

•     ULTRA MEANS BEYOND,VIRES MEANS POWERS. THE COMPANIES ACT REQUIRES THAT THE MEMORANDUM OF EVERY COMPANY MUST STATE THE OBJECT OF THE COMPANY. ANY ACT OUTSIDE THE MOA IS ULTRAVIRES THE COMPANY. WHICH MEANS IT MAY BE LEGAL BUT IT IS NOT PERMITTED BY THE MEMORANDUM OF ASSOCIATION. SUCH AN ACT IS VOID AND CAN NOT BE RATIFIED EVEN BY UNANIMOUS RESOLUTION OF ALL THE SHAREHOLDERS.

•     IT SERVES TWO PURPOSE:-

1.     IT PROTECTS THE SHAREHOLDERS

2.     PROTECTS THE CREDITORS

3.     COMPETENCY OF COMPANY IS DETERMINED BY ITS OWN CHARTER THAT IS MOA

•     COMMON SEAL

•     ANSWER:-A COMPANY IS AN ARTIFICIAL PERSON AND IT CAN NOT SIGN ITS NAME ON CONTRACT. SO IT WORKS WITH THE HELP OF SEAL. COMMON SEALS MEANS THE SIGNATURE OF THE COMPANY. EVERY COMPANY MUST HAVE  A SEAL WITH ITS NAME ENGRAVED ON IT. W.E,F 29 THE MAY 2015, THE USE OF COMMON SEAL IS NOW OPTIONAL AND NOT MORE MANDATORY. IF THE COMPANY DOES NOT HAVE A COMMON SEAL THEN AUTHORIZATION UNDER SECTION 22(2) SHOULD BE SIGNED BY 2 DIRECTORS OR ONE BY DIRECTOR AND CS WHERE COMPANY HAS APPOINTED COMPANY SECRETARY.

•     COMMON SEAL

•     THE DOCUMENTS WHICH REQUIRE COMMON SEAL:-

1.     POWER OF ATTORNEY TO EXECUTE DEEDS IN OR OUT OF INDIA

2.     SHARE CERTIFICATE

3.     SHARE WARRANT

4.     DOCUMENTS AUTHORISING ANY PERSON IN A TERRITORY OUTSIDE INDIA TO AFFIX COMMON SEAL TO DEED

5.     OTHER DOCUMENTS NEED NOT REQUIRE COMMON SEAL.

6.     A COMPANY CAN EMPOWER ANY PERSON TO EXECUTE DEEDS UNDER HIS SEAL. AUTHORITY TO PUT COMMON SEAL CAN BE GIVEN BY RESOLUTION OR BY COMMITTEE OF BOARD

7.      

•     CHARGE

•     AS PER SECTION 2( 16 ) OF THE COMPANIES ACT ,2013 CHARGE MEANS AN INTEREST OR LIEN CREATED ON THE PROPERTY OR ASSETS OF A COMPANY OR ANY ITS UNDERTAKING OR BOTH AS SECURITY AND INCLUDES AS MORTGAGE.

•     CHARGE IS DEFINED UNDER SECTION 100 OF THE TRANSFER OF PROPERTY ACT 1882

•     “ WHERE IMMOVABLE PROPERTY OF ONE PERSON IS ACT IS BY ACT OR BY OPERATION OF LAW MADE SECURITY FOR THE PAYMENT OF MONEY TO ANOTHER AND THE TRANSACTION DOES NOT AMOUNT TO MORTGAGE THE LATTER PERSON IS SAID TO HAVE CHARGE ON THE PROPERTY.

•     CHARGE

•     USED IN THE SENSE OF LIEN,ENCUMBRANCE OR CLAIM ON PROPERTY

•     SIGNIFIES A DEBT OR LIABILITY

•     CHARGE HAS WIDER MEANING THAN MORTGAGE OR LIEN

•     A CHARGE MEANS GENERALLY AN INTEREST

•     A CHARGE MEANS AN INTEREST OR RIGHT WHICH A LENDER OR CREDITORS OBTAINS IN A PROPERTY OF A COMPANY BY WAY OF SECURITY THAT A COMPANY WILL PAY BACK ITS DEBTS. WHEN A CHARGE IS CREATED IT HAS TO BE REGISTERED WITH THE ROC

·         SPECIFIC OR FIXED CHARGE

1.       AGAINST A SPECIFIC CLEARLY IDENTIFIABLE AND DEFINED PROPERTY. THE PROPERTY UNDER CHARGE  IS INDENTIFIED AT THE CREATION OF CHARGE. THE NATURE AND IDENTITY OF THE PROPERTY DOES NOT CHANGE DURING THE EXISTENCE OF CHARGE.

2.       UNDER A FIXED CHARGE THE SECURITY OF THE CREDITORS IS CONFINED TO THAT SPECIFIC ASSET THAT IS CHARGED

3.       IN THE WINDING UP PROCEEDING A DEBENTURE HOLDER SECURED BY SPECIFIC CHARGE IS IN THE HIGHEST RANKING CLASS OF CREDITORS.

4.       WHEN THERE ARE A NUMBER OF SPECIFIC CHARGES ON THE SAME PROPERTY THEIR PRIORITY IS DETERMINED  BY THE GENERAL RULES RELATING TO PRIORITY OF CHARGES.

•     FLOATING CHARGE

•     SUCH A CHARGE IS AVAILABLE ONLY TO COMPANIES AS BORROWER. A FLOATING CHARGE DOES NOT  ATTACH TO ANY DEFINITE PROPERTY BUT COVERS PROPERTY WHICH IS CONSTANTLY CHANGING LIKE STOCK IN TRADE,DEBTORS ETC AND THE COMPANY CAN DEAL WITH IT IN NORMAL COURSE OF ITS BUSINESS UNTILL IT BECOMES FIXED ON THE HAPPENING OF THE AN EVENT.

•    FEATURES OF FLOATING CHARGE:-

•               CHARGE ON A CLASS OF ASSETS OF PRESENT AND FUTURE

•               THE NATURE OF THE ASSETS CHANGING FROM TIME TO TIME

•               IT IS CONTEMPLATED THAT UN TILL SOME FUTURE STEPS IS TAKEN BY OR ON BEHALF OF THOSE INTERESTED IN THE CHARGE,THE COMPANY MAY CARRY ON ITS BUSINESS IN THE ORDINARY WAYS.

•     MEANING OF PROSPECTUS

•     SECTION 2(70 ) OF THE COMPANIES ACT 2013 DEFINES THE PROSPECTUS AS

•   A PROSPECTUS MEANS ANY DOCUMENTS DESCRIBED OR ISSUED AS A PROSPECTUS AND INCLUDES ANY NOTICES,CIRCULAR,ADVERTISEMENT OR OTHER DOCUMENTS INVITING DEPOSITS FROM THE PUBLIC OR DOCUMENTS INVITING OFFERS FROM THE PUBLIC FOR THE SUBSCRIPTION OF SHARES OR DEBENTURES IN A COMPANY.

•     MEANING OF PROSPECTUS

A PROSPECTUS ALSO INCLUDES SHELF PROSPECTUS AND RED HERRING PROSPECTUS.

A DOCUMENT WILL BE CALLED PROSPECTUS IF IT :

1.       INVITATION OF SUBSCRIPTION TO SHARES OR DEBENTURES OR DEPOSITS

2.       AND THIS INVITATION IS MADE TO PUBLIC.

3.       IN WRITTEN FORM

A PROSPECTUS IS GENERALLY A CIRCULAR OR NEWSPAPER ADVERTISEMENT PUBLISHED BY THE PROMOTERS AFTER THE FORMATION OF THE COMPANY TO INDUCE THE PUBLIC TO TAKE OR SUBSCRIBE SHARES IN THE COMPANY. HERE IT IS MEANT PURCHASE OF SHARES IN CASH ONLY.

•     SHELF PROSPECTUS U/S 31,”MEANS PROSPECTUS IN WHICH SECURITIES AND CLASS OF SECURITIES ARE ISSUED FOR SUBSCRIPTION IN ONE OR MORE ISSUES OVER A CERTAIN PERIOD WITHOUT THE ISSUE OF A FURTHER PROSPECTUS.

•     RED HERRING PROSPECTUS U/S 32 MEANS PROSPECTUS WHICH DOES NOT INCLUDE COMPLETE PARTICULARS OF THE QUANTUM OR PRICE OF THE SECURITIES INCLUDED THERIN.

•     FEATURES OF PROSPECTUS

1.       MUST BE INVITATION OFFERING TO THE PUBLIC

2.       INVITATION MUST BE MADE BY OR ON BEHALF OF THE COMPANY OR IN RELATION TO AN INTENDED COMPANY

3.       THE INVITATION MUST BE TO SUBSCRIBE OR PURCHASE TO SHARES OR DEBENTURES

4.       IT SHOULD BE IN WRITTEN FORM

5.       AN ADVERTISEMENT OFFERING TO THE PUBLIC SHARES OR DEBENTURES OF THE COMPANY FOR SALE IS PROSPECTUS

6.       ISSUED TO THE PUBLIC. PUBLIC IS GENERAL WORD. SECTION 42 OF THE COMPANIES ACT 2013.INCLUDES ANY SECTION OF THE PUBLIC WHETHER SELECTED AS MEMBERS OR DEBENTURES HOLDERS OF THE COMPANY OR CLIENTS OF THE COMPANY ISSUING PROSPECTUS.

•     WINDING UP ( LIQUIDATION)

•     WINDING UP MEANS CLOSING UP A COMPANY WHICH MAY BE BY REASON OF INSOLVENCY OR OTHERWISE, IT IS ALSO TERMED AS LIQUIDATION

•     WINDING UP IS THE PROCESS BY WHICH THE EXISTENCE OR LIFE OF A COMPANY IS PUT TO AN END AND ITS PROPERTIES ARE ADMINISTERED FOR THE BENEFITS OF ITS MEMBERS AND CREDITORS.

•     GOWER :

1.        WINDING UP OF A COMPANY IS PROCESS WHERE BY ITS LIFE IS ENDED AND ITS PROPERTY ADMINISTERED FOR THE BENEFITS OF ITS CREDITORS AND MEMBERS

2.       AN ADMINISTRATORS CALLED LIQUIDATOR IS APPOINTED AND HE TAKES CONTROL OF THE COMPANY ,COLLECTS ITS ASSETS, PAYS ITS DEBTS

3.       AND FINALLY  DISTRIBUTES THE SURPLUS AMONG THE MEMBERS ITS ACCORDANCE WITH THEIR RIGHTS,

•     AT THE END OF WINDING UP THE COMPANY WILL HAVE NO ASSETS OR LIABILITIES AND WILL THEREFORE BE SIMPLY A FORMAL STEP FOR IT TO BE DISSOLVED THAT IS FOR ITS LEGAL PERSONALITY AS A CORPORATION BE BROUGHT TO AN END.

•     ACCORDING TO SECTION 2 ( 94A) OF THE COMPANIES ACT,2013 ,” WINDING UP MEANS WINDING UNDER THIS ACT OR LIQUIDATION UNDER THE INSOLVENCY AND BANKRUPTCY CODE AS APPLICABLE.

•     COMPULSORY WINDING UP BY TRIBUNAL(NCLT)

•     GROUNDS FOR COMPULSORY WINDING OF THE COMPANY( SEC 271)

1.       SPECIAL RESOLUTION

2.       INABILITY TO PAY DEBTS

3.       JUST AND EQUITABLE

4.       DEFAULT IN FILING P/L ACCOUNT AND B/S OR ANNUAL RETURN

5.       ACTED AGAINST SOVEREIGNTY AND INTEGRITY OF INDIA

6.       SICK INDUSTRIAL COMPANY U/S 424 G

•     COMPULSORY WINDING UP

•     SECTION 272 OF THE COMPANIES ACT STATES THAT THESE PERSONS CAN FILE A PETITION:-

1.       THE COMPANY

2.       CREDITORS

3.       ANY CONTRIBUTORY OR CONTRIBUTORS

4.       THE REGISTRAR

5.       ANY PERSON AUTHORISED BY THE CENTRAL GOVERNMENT

6.       BY THE CENTRAL OR STATE GOVT

•     ISSUED CAPITAL

1.       IT IS THAT PART OF THE NOMINAL CAPITAL WHICH IS ACTUALLY ISSUED BY THE COMPANY FOR PUBLIC SUBSCRIPTION. A COMPANY IS NOT OBLIGED TO ISSUE ALL ITS NOMINAL CAPITAL AT ONCE. IT MAY HAVE UN ALLOTTED RESIDUE TO BE ALLOTTED IN NEAR FUTURE.

2.       THE DIFFERENCE BETWEEN THE NOMINAL AND THE ISSUED CAPITAL IS KNOWN AS THE UNISSUED CAPITAL.

3.       CAN NEVER BE MORE THAN NOMINAL CAPITAL. CAN BE EQUAL WHEN ALL THE SHARES HAVE BEEN ISSUED

•     ONE PERSON COMPANY

•     SECTION 2(620 OF THE COMPANIES ACT 2013 DEFINES THAT ONE PERSON COMPANY MEANS A COMPANY WHICH HAS ONLY ONE PERSON AS MEMBER.

•     IS REQUIRED TO IDENTIFY ITS NAME IN BRACKETS AS ONE PERSON COMPANY

•     SECTION 3(1)(C ) OF THE COMPANIES ACT 2013 PROVIDES THAT WHERE THE COMPANY TO BE FORMED IS TO BE ONE PERSON COMPANY THAT IS TO SAY A PRIVATE COMPANY,THE COMPANY MAY BE FORMED BY ONE PERSON SUBSCRIBING HIS NAME TO A MOA AND COMPLYING WITH THE REQUIREMENTS OF THIS ACT IN RESPECT OF REGISTRATION.

•     ONE PERSON COMPANY FORMED UNDER SECTION 3 MAY BE EITHER-

1.       A COMPANY LIMITED BY SHARES OR

2.       A COMPANY LIMITED BY GUARANTEE

3.       A UNLIMITED COMPANY

•     INCORPORATION OF COMPANY

•     A COMPANY COMES INTO EXISTENCE WHEN A NUMBER OF PERSONS COME TOGETHER WITH A VIEW TO EXPLOIT SOME BUSINESS OPPORTUNITY. THESE PERSONS ARE CALLED PROMOTERS. UNDER SECTION 3 ANY SEVEN OR MORE( 2 OR MORE IN CASE OF PVT COMPANY AND IN CASE OF OPC THEN ONE)MAY FORM AN INCORPORATED COMPANY FOR LAW FUL PURPOSE FOR SUBSCRIBING THEIR NAMES TO MOA AND COMPLYING WITH OTHER REQUIMENTS

•     SUCH AN INCORPORATED COMPANY MAY BE

•             LIMITED BY SHARES

•             LIMITED BY GUARANTEE

•             UNLIMITED COMPANY

•     AN APPLICATION SHALL BE FILED WITH ROC IN FORM NO INC 2( FOR ONE PERSON COMPANY) AND FORM NO INC 7 OTHER THAN ONE PERSON WITH THE REQUISITES DOCUMENTS.

•     ON REGISTRATION THE REGISTRAR WILL ISSUE A CERTIFICATE OF INCORPORATION IN FORM INC 11 WHEREBY HE CERTIFIES THAT THE COMPANY IS INCORPORATED AND THE LEGAL EFFECT IS:

•               A COMPANY BECOMES A BODY CORPORATE DIFFERENT FROM ITS MEMBERS

•               PERPETUAL SUCCESSION AND COMMON SEAL

•               CAN SUE AND BE SUED IN ITS OWN NAME

•               RIGHT TO HAVE AND DISPOSE PROPERTY