Workshop on practical aspects of

incorporation of a Company

Symbiosis Law School, Hyderabad

September 22, 2018

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 Agenda
Part I

• Evolution of Joint Stock Company

• Key provisions related to incorporation of a Company

Part II

• Practical/procedural aspects of incorporation

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 Evolution of Joint Stock Company

• Barter System

• Sole Proprietor

• Partnership Firm

• Joint Stock Company/One Person Company

• Limited Liability Partnership

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 Advantages of Joint Stock Company

• Separate legal entity

• Perpetual Succession

• Limited Liability

– Saloman Vs Saloman & Co. Ltd (1895-99)

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 Incorporation of Company
Steps involved for incorporation of the Company:

a. Like minded people coming together

b. Conceive an idea
i. What to do
ii. Where to do
iii. When to do
iv. How to do and the scale

c. Give an identity

d. Give a legal shape to it

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 Key provisions related to incorporation of Company

• Formation of Company (Section 3)

• Memorandum of Association (Section 4)

• Articles of Association (Section 5)

• Act to override Memorandum, Articles etc (Section 6)

• Incorporation of Company (Section 7)

• Effect of incorporation of Company (Section 9)

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 Memorandum of Association
• Name Clause
– The name of the Company is ‘‘XYZ PRIVATE LIMITED”.
• Situation Clause
– The registered office of the Company will be situated in the State of ANDHRA
PRADESH
• Objects Clause
– To carry on the business of manufacturers, processing, preservation, dehydration,
canning, bottling, freezing, packing and repacking of fruits and vegetable products,
squashes, soup, syrups, juice and ice concentrates, nectars, jelly flavored, drinks,
beverages, sarbate, pulp, purees, beans, cocktail ketchups, jams and murbas, pickles,
sauces, slices, marmalade, health drinks and diet drinks and drinks, aerated, non-aerated
minerals and artificial water drinks and provision of all kinds and every descriptions
and to carry on the business of export, import, brokers, commission agents and dealers of
food products of all kinds.

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 Memorandum of Association
• Liability Clause

– The Liability of the member(s) is limited and this liability is limited to the Amount
unpaid, if any, on the shares held by them
• Capital Clause
– The Authorized Share Capital of the Company is Rs. 20,00,00,000/- (Rupees Twenty crore only)
divided into 20,00,00,000 (Twenty crore only) equity shares of Re. 1/- (Rupee One only) each. The
Company shall have power from time to time to increase, reduce or alter its Share Capital and to
issue any shares in original or new capital as Equity or Preference Shares and to attach to any
class or classes of such shares of preference, rights or privileges or priorities in payment or
otherwise any other shares or to subject the same to any reductions, limitation or conditions and
vary the regulation or regulations of the Company as far as necessary to give effect to the same
upon the sub-division of a share or a portion the right to participate in profits in any manner
subject to the consent of/by the Government of India or the Court, if the same is necessary being
obtained before doing so.

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 Articles of Association

• Articles contain the regulations for management of the company covering

the following:
– Share Capital
– Calls on Shares
– Transfer and Transmission of shares
– Forfeiture of shares and other matters related to shares
– Proceedings of general meeting
– Board of Directors
– Proceedings of Board meeting
– Dividends and Reserves
– Accounts
– Indemnity
– Winding Up

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Shall we take a short break

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 Practical/procedural aspects of incorporation

• Register on MCA portal

• RUN (Reserve Unique Name)

• Obtaining Digital Signature

• Register of Digital Signature in MCA portal
• Directors Identification Number
• Filling and filing the SPICE application
• Obtaining the Incorporation Certificate

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 Practical/procedural aspects of incorporation

• View of DSC application

• View and filling of application of Directors Identification Number

application (DIN)

• View of SPICe application form

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 Simplified Proforma for incorporating Company Electronically (SPICe)

• Only upto 7 Subcribers

• Forms involved INC -32 (SPICe); INC-33 (SPICe MOA); INC-34 (SPICe
AOA); INC-22

• Atleast one proposed director should have DSC and all subscribers should
have DSC

• DIN requried for atleast One Directors; upto 3 DIN can be applied.

• Only one Name

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 Simplified Proforma for incorporating Company Electronically (SPICe)

Form No. INC-9

Affidavit
[Pursuant to section 7(1)(c) of the Companies Act, 2013 and rule 15 of the Companies (Incorporation) Rules, 2014]

Name of the proposed company:

I …………. being the subscriber to the memorandum / named as first director in the articles, of the above
named proposed company, hereby solemnly declare and affirm that:
a. I have not been convicted of any offence in connection with the promotion, formation or management
of any company during the preceding five years; and
b. I have 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
c. 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 my knowledge and belief.

Date: Signature:
Place:
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 Practical aspects of Incorporation under SPICe

• In case company has shares of multiple nominal amounts per share, multiple nominal values per share
should be entered separated by comma in the field Nominal amount per share.

• Correspondence address should be of same State as proposed registered office.

• Valid email ID for company should be given as intimation regarding processing of the eForms,
important communication from RoC office shall also be communicated electronically at the email ID
being mentioned at the time of incorporation.

• In name of company, do not enter abbreviation like PVT, PVT., (P), LTD and LTD.

• Name is similar to any existing company or to the foreign holding company, then, a certified true copy
of No objection certificate by way of board resolution.

• Upto 2 resubmissions are permitted

• Aadhaar number is mandatory for persons having PAN.

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Thank You

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