CORPORATE LAW

CIA-1

By,
Sanjana s bhat
1812033
 3 bcom f&a ‘a’

SEPARATE LEGAL
EXISTENCE

1. INTRODUCTION
 A separate legal entity is a legal construct through which the law allows a group of natural
persons to act as if they were a single person for certain purposes. The most common purposes
are lawsuits, propertyownership, and contracts.

A legal entity is not always something else than the natural persons of which it is composed as one can see
with a company or corporation.
Some examples of legal entities include:

 companies
 cooperatives (co-ops)
 corporations
 municipalities
 natural persons
 political parties
 sovereigns
 states
 temples, in some legal systems, have separate legal personality[1]
 trade unions
ship or vessel. There are limitations to the legal recognition of artificial persons. Legal entities
cannot marry, they cannot vote or hold public office, and in most jurisdictions there are certain positions
which they cannot occupy.[2] The extent to which a legal entity can commit a crime varies from country to
country. Certain countries prohibit a legal entity from holding human rights; other countries permit
artificial persons to enjoy certain protections from the state that are traditionally described as human
rights.[3]
examples of legal entities are - sole traders -partnerships - trusts - private and public company
Recently, in India, a company despite being artificial person has got court stay, from High Court Jaipur
Bench against an employee seeking justice in labour court.[4]
CASE STUDIES

1. SALOMON VS SALOMON
The case of Salomon v A. Salomon & Co. Ltd established the principle of “separate legal
personality” as was provided in the Companies Act of 1862 and as it is still provided in the
Companies Act of 2006 under the United Kingdom Company Law. In this case Mr Salomon
a shoe manufacturer had sold his business to a limited liability company where he and his
wife and five children where the shareholders and directors of the company (to comply with
the Companies Act of 1862 which required a minimum of 7 members). Mr Salomon owned
20,001from the 20,007 shares of the company with the remaining 6 shared equally amongst
his wife and children. The company ran into some financial difficulties and sort a loan of
£5,000 from one Mr Edmund Broderip who granted the loan. Subsequently the company
went into more financial difficulties and was unable to pay its debt of which an action for
liquidation was carried out against it.

Section 7(1), (2) and section 16(2) of the CA 2006, provides for the registration and
incorporation of a limited liability company so long as the aim legal. The Insolvency Act
provides in section 74 that an incorporation of a limited liability company restricts the
liability of its members. By this natural persons will not be held personally liable if an act is
done in the name of a company. See the case of Salomon v A. Salomon Ltd (supra). However
a problem will arise where a member(s) of the company have taken advantage of the separate
legal status to act fraudulently or act in a manner which seems unjust. In such a situation the
court acts with caution and depending on the fact and surrounding circumstances the law may
go after the individual who has acted dishonestly to hold him liable. In the case of Atlas

“Their Lordship of the privy [of the Privy Council] believe it to be of supreme importance
that the distinction should be clearly marked, observed and maintained between an
incorporated company’s legal entity and its action, assets, rights and liabilities on the one
hand, and the individual shareholder and their actions, assets, rights and liabilities on the
other hand.”

However the courts have experienced some difficulties in deciding what term best suits the
situation of describing the act of denying corporate status. In the case of Atlas Maritime Co
SA v Avalon Maritime Ltd Staughton LJ attempted a clarification by stating

“To pierce the corporate veil is an expression that I would reserve for treating the rights or
liabilities or activities of a company as the right or liabilities or activities of its shareholders.
To lift the corporate veil or look behind it, on the other hand should mean to have regard to
the shareholding in a company for some legal purpose.”

The adoption of a wider view is controversial in it and must be treated with great caution to
avoid confusion however the wider view does not deny a corporate status per se but rather it
seeks to recognise such corporate status existence. Mayson e tal 2009 pointed out that the use
of a wider view helps in determining the liability and obligations of a company through the
acts of human beings. They stated that “…using information about persons connected with a
company to determine the character of the company’s act is when a human being is identified
with the company and the human’s knowledge, actions, criminal intent or other physical or
mental attributes are taken to be those of the company”. Being an artificial person a company
cannot do acts which are only possible with natural persons. However a company would be
held liable nonetheless for wrongful acts done by human beings acting on behalf of the
company. See the case of Lennard’s Carrying Co Ltd v Asiatic Petroleum Co Ltd where
Viscount Haldene had this to say

“… a corporation is an abstraction. It has no mind of its own any more than it has a body of
its own; its active and directing will must be consequently be sought in the person of
somebody who for some purposes may be called an agent, but who is really the directing
mind and will of the corporation, the very ego and centre of the Personality of the
corporation…if Mr Lennard was the directing mind of the company, phen his action must,
unless a corporation is not liable at all, have been an action which was the action of the
company itself within the meaning of s. 502…”

The phrase ‘directing mind and will’ has become the most significant basis for relating the
acts of a natural person acting on behalf of a company as the act of the company. See the
Lennard’s Carrying Co Ltd v Asiatic Petroleum Co Ltd(supra). More often than not
attributing the act of natural person as the act of a company is required to be done by person
in actual authority for example the directors and managers of a company. See the case of H L
Bolton (Engineering) Co Ltd v T J Graham and sons Ltd where at the first and second
instance the court pointed out that “…the state of mind of these managers is the state of mind
of the company and is treated by law as such”. See the case of Tesco Supermarkets Ltd v
Nattrass where Lord Reid pointed out that the intent of Lord Denning’s decision in the former
case was not intended to included “…all servant of a company whose work is brain work, or
who exercises some managerial discretion under the direction of a superior officer of the
company…”. However in some cases that have come before the courts the court has thought
it wise to attribute act or thought than have been done by individuals who do not form part of
the directing body of the company as acts forming part in order to make the company liable.
See the case of Moore v I Bresler Ltd where the court held a company liable for false
publication of taxable transactions by the company’s secretary and the branch sale manager.
Contrast this with the case R v Rozeik where defendant was not held liable because he was
not part of the directing mind of the company. See also the case of Director General of Fair
Trading v Pioneer Concrete (UK) Ltd and the case of Bank of Credit and Commerce
International SA where the court attributed the ‘directing mind and will’ to individuals who
were not part of the directing body in order to prevent the directing mind and will of the
company from escaping liability. See also the case of Meridian Global Fund Management
Asia Ltd v Securities Commission where Lord Hoffman guarded against the use of the phrase
‘directing mind and will’ as a determining factor of the acts of a company by natural persons.

A criminal action can however the instituted against a company.

The case of Salomon v Salomon (supra) established that an agency relationship cannot exist
between a company and its shareholders however in some rare situation an agency
relationship may be imputed into a relationship between a company and the shareholders as
was decided in the case of Gramophone & Typewriter Ltd v Stanley however this
relationship in most cases will arise between a parent company and its subsidiary. In the case
of Smith, Stone & Knight Ltd v Birmingham Corp, Atkinson J pointed out that the issue of an
agency relationship will depend on the surrounding facts of each case. The court held in this
case that the parent company as a matter of law and fact owned the business and profit of the
subsidiary company as the subsidiary was a mere legal entity operating on its behalf. See also
the case of Re FG (Films) Ltd where the court refused to grant separate legal entity to the
English film company on the basis that the company was an agent of the American company
which owned 90% of the shares. Contrast these two cases with the case of Adams v Cape
Industries plc where the court held that a certain subsidiary company in the United States was
not an agent of the parent company in the United Kingdom as both companies did not have
an agency relationship.

The second instance in which the court will not hesitate to pierce the veil and go after a
natural person is where the company had been incorporated to escape liability to third parties.
In the case of Re a Company the defendant had set up companies in order to put away assets
so as to conceal the fact that he was capable of meeting his liability to the plaintiff. The court
pierced the veil and permitted the plaintiff to recover liability from the defendant. See also
the case of V-C in Trustor AB v Smallbone (supra) where the court pierced the veil to hold a
director liable for the sum £20m traced to his personal company from the claimant company
where he was a former director. See also the case of Kensington International Ltd v Republic
of Congo where the veil was lifted to expose the Republic of Congo as the sellers of oil and
receiver of profit from the sale. Contrast this with case of Ord v Belhaven Pubs Ltd where the
court argued that where there is no sufficient evidence to pierce a company’s veil if will
refrain from doing such.

Note also that the court will not pierce the veil of incorporation so that the third party may
acquire possession in a future date. See the case of Adams v Cape Industries plc (supra)
where the court pointed out that it will refuse to “…accept as a matter of law that the court is
entitled to lift the corporate veil as against a defendant company…in respect of particular
future activities of the group…”.

Conclusion

The law as it is under the English company law will rather impute the principle of separate
legal personality to a limited liability company as was the case in the case of Salomon v
Salomon than apply the doctrine of lifting the veil. However the law will be ready to go after
a person who takes advantage of the principle of the case in Salomon v Salomon to act in a
fraudulent or unspeakable manner. It is the intent of the law is to create justice and fairness as
it evidenced in both statutory provision and judicial decisions. However the principle of
separate legal personality comes with it some vagueness especially when one looks at the
exceptions which come with the principle. It is therefore necessary that something is done to
reduce if possible eliminate such vagueness.

2. Macaura v Northern Assurance Co Ltd

Facts
Mr Macaura owned the Killymoon estate in County Tyrone, Northern Ireland. He sold the
timber there to Irish Canadian Sawmills Ltd for 42,000 fully paid up £1 shares, making him
the whole owner (with nominees). Mr Macaura was also an unsecured creditor for £19,000.
He got insurance policies - but in his own name, not the company's - with Northern
Assurance covering for fire. Two weeks later, there was a fire. Northern Assurance refused to
pay up because the timber was owned by the company, and that because the company was a
separate legal entity, it did not need to pay Mr Macaura any money.

Judgment
The House of Lords held insurers were not liable on the contract, since the timber that
perished in the fire did not belong to Mr Macaura, who held the insurance policy. Lord
Buckmaster gave the first judgment, holding in favour of the insurance companies. Lord
Atkinson concurred. Lord Sumner concurred and said the following.[1] My Lords, this appeal
relates to an insurance on goods against loss by fire. It is clear that the appellant had no insurable interest
in the timber described. It was not his. It belonged to the Irish Canadian Sawmills Ltd, of Skibbereen, co
Cork. He had no lien or security over it and, though it lay on his land by his permission, he had no
responsibility to its owner for its safety, nor was it there under any contract that enabled him to hold it for
his debt. He owned almost all the shares in the company, and the company owed him a good deal of
money, but, neither as creditor nor as shareholder, could he insure the company's assets. The debt was not
exposed to fire nor were the shares, and the fact that he was virtually the company's only creditor, while
the timber was its only asset, seems to me to make no difference. He stood in no "legal or equitable
relation to" the timber at all. He had no "concern in" the subject insured. His relation was to the company,
not to its goods, and after the fire he was directly prejudiced by the paucity of the company's assets, not by
the fire.

3. Lee v Lee's Air Farming Ltd

Lee v Lee’s Air Farming Ltd [1960] UKPC 33 is a company law case from New Zealand,
also important for UK company law and Indian Companies Act 2013, concerning
the corporate veil and separate legal personality. The Judicial Committee of the Privy
Council reasserted that a company is a separate legal entity, so that a director could still be
under a contract of employment with the company he solely owned.

Facts[edit]
Catherine Lee’s husband Geoffrey Lee formed the company through Christchurch accountants,
which worked in Canterbury, New Zealand. It spread fertilisers on farmland from the air, known
as top dressing. Mr Lee held 2999 of 3000 shares, was the sole director and employed as the
chief pilot. He was killed in a plane crash. Mrs Lee wished to claim damages of 2,430 pounds
under the Workers’ Compensation Act 1922 for the death of her husband, and he needed to be a
‘worker’, or ‘any person who has entered into or works under a contract of service… with an
employer… whether remunerated by wages, salary or otherwise.’ The company was insured (as
required) for worker compensation.
The Court of Appeal of New Zealand said Lee could not be a worker when he was in effect also
the employer. North J said[2] "the two offices are clearly incompatible. There would exist no power
of control and therefore the relationship of master-servant was not created."

Advice[edit]
The Privy Council advised that Mrs Lee was entitled to compensation, since it was perfectly
possible for Mr Lee to have a contract with the company he owned. The company was a
separate legal person. Lord Morris of Borth-y-Gest said

“ It was never suggested (nor in their Lordships’ view could it reasonably have been
suggested) that the company was a sham or a mere simulacrum. It is well established
that the mere fact that someone is a director of a company is no impediment to his
entering into a contract to serve the company. If, then, it be accepted that the
respondent company was a legal entity their Lordships see no reason to challenge the
validity of any contractual obligations which were created between the company and
the deceased...

It is said that the deceased could not both be under the duty of giving orders and also
be under the duty of obeying them. But this approach does not give effect to the
circumstance that it would be the company and not the deceased that would be giving
the orders. Control would remain with the company whoever might be the agent of
the company to exercise...
There appears to be no great difficulty in holding that a man acting in one capacity
can make a contract with himself in another capacity. The company and the deceased
were separate legal entities.

LIFTING OF CORPORATE
VEIL
1. Beginning with LIC v. Escorts

One of the first Indian cases that dealt with the issue of a company as an independent
juristic personality and the lifting of the veil, known almost as well as Salomon, is the
ruling of the Supreme Court in the case of Life Insurance Corporation of India v.
Escorts Ltd. & Ors.[2]

This case dealt with a non-resident portfolio investment scheme, which existed under
the erstwhile Foreign Exchange Regulation Act, 1973 (FERA). The scheme allowed
non-resident companies, which were owned by or in which the beneficial interest
vested in non-resident individuals of Indian nationality / origin was at least 60%, to
invest in the shares of Indian companies. Investment was allowed to the extent of 1%
of the paid-up equity capital of such Indian companies, and could not exceed a ceiling
of 5%. Under the scheme, 13 companies, all owned by Caparo Group Limited,
invested in Escorts Limited – an Indian company. Importantly, 60% of the shares of
Caparo Group Limited were held by a trust, whose beneficiaries were Swraj Paul and
members of his family (all non-resident individuals of Indian origin).

The investment by the 13 Caparo Group companies was challenged on the ground that
it was an attempt at circumventing the prescribed ceiling of investment of 1% under
the Scheme, and that, “One had only to pierce the corporate veil to discover Mr.
Swraj Paul lurking behind.”

The Supreme Court firstly noted the judgment in Salomon, and that it was firmly
established that a company once incorporated, has an independent and legal
personality distinct from the individuals who are its members. It also noted that only
in certain exceptional circumstances may the corporate veil be lifted, the corporate
personality ignored and the individual members recognised for who they are.

Eventually, however, the Supreme Court ruled that in the facts of this case, and only
for the purposes of ascertaining the ownership in the investment, lifting of the veil
would be necessary to a limited extent, i.e. to ascertain the nationality or origin of the
shareholders. It was not necessary to ascertain the individual identity of each of them.
Merely because more than 60% of the shares of the foreign investor companies were
held by a trust of which Mr. Swraj Paul and the members of his family were
beneficiaries, could not deny the companies the facility of the scheme on the basis
that the permission granted was illegal. As such, the Court ignored that the identity of
the shareholders may be common, thus recognising that each company was an
independent juristic entity, looking only at nationality for compliance with the
requirements of the scheme.

The Supreme Court also took the opportunity to set out the basic conditions and
principles to be applied and the various circumstances under which the corporate veil
of a company could be pierced, i.e. to cast responsibility or liability for an act carried
out by the company. Such acts would include fraud or improper conduct, the evasion
of a taxing or a beneficent statute or where associated companies are inextricably
connected as to be, in reality, part of one concern and should therefore, be treated as
such.

The Vodafone Debacle and Cure

One of the most recent and also a landmark case of the Supreme Court, is its decision
in the case of Vodafone International Holdings B.V. v. Union of India &
Another.[9] In judgment, the Supreme Court set aside the Bombay High Court’s
judgment directing Vodafone International Holdings BV (“Vodafone”), to pay INR
110 billion, as withholding tax in a transaction that took place off-shore.

The facts, as briefly put, are that in May 2007, Vodafone, incorporated in the
Netherlands, acquired from Hong Kong based Hutchison Group, the entire share
capital of CGP Investments (Holdings) Limited (“CGP“), a company incorporated in
the Cayman Islands, which in turn controlled a 67% interest in Hutchison-Essar
Limited (“HEL“), Hutchison’s Indian mobile business. The Indian income tax
authorities contended that capital gains were made by Hutchison in India and that
Vodafone was therefore liable to pay withholding tax thereon, amounting to
approximately INR 110 billion (the sale price being USD 11.2 billion).

Vodafone challenged the tax demand in the Bombay High Court, which ruled in
favour of the income tax authorities, holding that the essence of the transaction was a
change in the controlling interest in HEL, which constituted a source of income in
India. Vodafone appealed to the Supreme Court, which overruled the High Court and
held that the transaction fell outside India’s territorial tax jurisdiction and was hence
not taxable.
The judgment is not only important in the context of taxation, but also covers other
issues of law. One of these is in the context of the principle of the corporate veil, and
the circumstances under which it may be lifted, particularly in the context of
commercial cross-border transactions and tax avoidance.

The Court recognised the fundamental principle of the corporate veil by noting that,
“The approach of both the corporate and tax laws, particularly in the matter of
corporate taxation, generally is founded on the abovementioned separate entity
principle, i.e., treat a company as a separate person. The Indian Income Tax Act,
1961, in the matter of corporate taxation, is founded on the principle of the
independence of companies and other entities subject to income-tax.”. It observed in
the context of parent / subsidiary relationships, that it is generally accepted that the
group parent company would give guidance to group subsidiaries, but that by itself
would not justify piercing the veil or imply that the subsidiaries are to be deemed
residents of the State in which the parent company resides, and that “a subsidiary and
its parent are totally distinct tax payers”.

The Court clarified that it was only in a situation where the subsidiary was fully
controlled by or subordinate to the parent company, and / or the actual controlling
parent company made an indirect transfer through “abuse of organisation form/legal
form and without reasonable business purpose” which resulted in tax avoidance, that
the independence and distinctness of the separate legal entities may be ignored. In
such a case, the subsidiary’s place of residence may be linked with that of its parent,
and tax imposed on the parent company, so that where “… a transaction is used
principally as a colorable device for the distribution of earnings, profits and gains …
the principle of lifting the corporate veil or the doctrine of substance over form or the
concept of beneficial ownership or the concept of alter ego arises.”

While dealing with tax liability in India and indirect transfers / holding companies and
subsidiary company relationships, the Court noted that it was common for foreign
investors to invest in Indian companies indirectly, through an interposed foreign
holding or operating company, such as a Cayman Islands or Mauritius based
company, for both tax and business purposes. India’s judicial anti-avoidance rules,
permit the Revenue to “invoke the ‘substance over form’ principle or ‘piercing the
corporate veil”, if it is able to establish that the transaction is a “sham or tax
avoidant”. For example, if the Revenue finds that in an investment transaction /
acquisition, “an entity which has no commercial/business substance has been
interposed only to avoid tax”, then in such cases the Revenue would be entitled to
ignore the separate legal identity or interposition of that entity, to look at the holding
company as having directly made the investment / acquisition.

Six factors that may be considered to determine whether the transaction is a sham and
whether in a specific case, the corporate veil may be lifted, are: “(i) the concept of
participation in investment, (ii) the duration of time during which the Holding
Structure exists; (iii) the period of business operations in India; (iv) the generation of
taxable revenues in India; (v) the timing of the exit; and (vi) the continuity of business
on such exit.”
 In the final analysis, the Supreme Court decided against lifting the corporate veil
in Vodafone, as the tax authorities failed to establish that the transaction was a sham
or tax avoidance scheme. The Court noted, “There is a conceptual difference between
a preordained transaction which is created for tax avoidance purposes, on the one
hand, and a transaction which evidences investment to participate in India” – and that
to ascertain which bracket the transaction fell into, the six factors mentioned above
should be taken into account. Notice was taken of the fact that the Hutchison structure
(i.e. the parent company in Hong Kong, the intermediate subsidiary in the Cayman
Islands, and the final subsidiary in India etc.), had existed for a considerable length of
time (from 1994), generating taxable revenues, the transaction envisaged “continuity”
of the telecom business, and that accordingly the Hutchison structure was not a sham
or tax avoidance scheme.

The Supreme Court further observed, that where the court was convinced that the
transaction satisfies all the parameters of “participation in investment” the Court need
not go into the questions such as de facto control vs. legal control, legal rights vs.
practical rights, etc., and accordingly, there was no need to lift the corporate veil of
the Hutchison or Vodafone entities.

In arriving at this conclusion, the Supreme Court upheld the letter of the law on the
premise that fiscal statutes have to be strictly interpreted. Accordingly, since the
Income Tax Act clearly envisaged a different regime for tax withholding at source on
a transaction between two non-resident entities, there was no occasion to read the law
differently so as to require tax withholding on the premise that the non-resident
transferor controlled a substantial undertaking in India, i.e. no case was made for
piercing the corporate veil.

Conclusion

The principle of the juristic and legal independence of companies and the corporate
veil, that is drawn between a company and its shareholders, is a fundamental but not
sacrosanct principle of modern corporate law. As explained in LIC v. Escorts and
beyond, this veil can, in exceptional circumstance, be lifted or pierced, to look at and
take into account, the shareholders or entities in actual control of the company
concerned. Considerations such as the economic reality, substance of the transaction,
and viewing the transaction as a whole, are critically evaluated, but unless there are
compelling circumstances, Indian law demands that courts respect the sanctity of the
corporate veil and the independent corporate personality that comes into existence
immediately upon incorporation of a company.

4. JONES VS LIPMAN

Facts
Lipman agreed to sell a property to Jones for £5,250, but subsequently changed his mind. He
then formed his own company, which had £100 in capital, and made himself the director and
owner. He then transferred the land, which he had agreed to sell to Jones, to this sham
company for £3,000. To enable such a transaction, Lipman had borrowed over half the
money needed by way of a bank loan, and the remainder was owed to other sources. Under
the Rules of the Supreme Court Order 14A, the purchaser applied for specific performance
to be carried out against the vendor and the vendor’s company for the transfer of the property
in question.

Issue

The court was required to decide if an order of specific performance could be enforced in the
circumstances. Specifically, it was important for the court to assess the company that Lipman
had created and the transaction of the sale of the property to see if it was equitable. The court
also had to establish whether it was appropriate for the Rules of the Supreme Court to be
applied to the circumstances.

Held

Firstly, the court held that the Rules of the Supreme Court could apply to the
circumstances. Further to this, it was found that the defendant’s company was created by the
defendant as ‘a mask to avoid recognition by the eye of equity’ (at p.836) and on this basis, a
requirement of specific performance could not be avoided. It was clear that the defendant had
control of the sham company which held the property, and therefore Lipman was the only
individual who could perform the agreement.

INCORPORATION OF
COMPANY PROCESS
Steps In Incorporation of A Company
Incorporation of a company refers to the legal process that is used to form a corporate entity or a
company. An incorporated company is a separate legal entity on its own, recognised by the law.
These corporations can be identified with terms like ‘Inc’ or ‘Limited’ in their names. It
becomes a corporate legal entity completely separate from its owners.

Steps in Incorporation of a Company

A group of seven or more people can come together so as to form a public company whereas,
only two are needed to form a private company. The following steps are involved in the
incorporation of a company.

1. Ascertaining Availability of Name

The first step in the incorporation of any company is to choose an appropriate name. A company
is identified through the name it registers. The name of the company is stated in the
memorandum of association of the company. The company’s name must end with ‘Limited’ if
it’s a public company and ‘Private Limited’ if its a private company.

To check whether the chosen name is available for adoption, the promoters have to write an
application to the Registrar of Companies of the State. A 500 rupee is paid with the application.
The Registrar then allows the company to adopt the name given they fulfil all legal
documentation formalities within a period of three months.

2. Preparation of Memorandum of Association and Articles of Association

The memorandum of association of a company can be referred to as its constitution or rulebook.

The memorandum states the field in which the company will do business, objectives of the
company, as well as the type of business the company plans to undertake. It is further divided
into five clauses

1. Name Clause

2. Registered Office Clause

3. Objects Clause

4. Liability Clause

5. Capital Clause
Articles of Association is basically a document that states rules which the internal management
of the company will follow. The article creates a contract between the company and its
members. The article mentions the rights, duties, and liabilities of the members. It is equally
binding on all the members of the company.

3. Printing, Signing and Stamping, Vetting of Memorandum and Articles

The Registrar of Companies often helps promoters to draw up and draft the memorandum and
articles of association. Above all, with promoters who have no previous experience in drafting
the memorandum and articles.

Once these have been vetted by the Registrar of Companies, then the memorandum of
association and articles of association can be printed. The memorandum and articles are
consequently divided into paragraphs and arranged chronologically.

The articles have to be individually signed by each subscriber or their representative in the
presence of a witness, otherwise, it will not be valid.

4. Power of Attorney
To fulfil the legal and complex documentation formalities of incorporation of a company, the
promoter may then employ an attorney who will have the authority to act on behalf of the
company and its promoters. The attorney will have the authority to make changes in the
memorandum and articles and moreover, other documents that have been filed with the registrar.

5. Other Documents to be Filed with the Registrar of Companies

The First – e-Form No.32 – Consent of directors

The Second – e-Form No.18 – Notice of Registered Address

The Third – e-Form No.32. – Particulars of Directors

6. Statutory Declaration in e-Form No.1

This declaration, furthermore states that ‘All the requirements of the Companies Act and the
rules thereunder have been compiled with respect of and matters precedent and incidental
thereto.’

7. Payment of Registration Fees

A prescribed fee is to be paid to the Registrar of Companies during the course of incorporation.
It depends on the nominal capital of the companies which also have share capital.

8. Certificate of Incorporation

If the Registrar is completely satisfied that all requirements have been fulfilled by the company
that is being incorporated, then he will register the company and issue a certificate of
incorporation. As a result, the incorporation certificate provided by the Registrar is definite proof
that all requirements of the Act have been met.