Negotiable Instruments: Exhaustive Coverage by Adv Roma Bhagat. Register Now!
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Key takeaways

  • Registering a company extremely important, as the Companies Act grants a legal personality to registered companies.
  • There are two documents that are crucial at the moment of formation. These are the Articles of Association (AoA) and the Memorandum of Association (MoA).
  • The National Company Law Tribunal takes strict actions like ordering that the company's name be removed from the Registrar of Companies, if the registration of company is done based on false information.

The process for registering a company or incorporating it, which results in the creation or birth of a company, is defined by the Companies Act. The Companies Act grants a legal personality to registered companies, and as a result of registration, the company can benefit from the advantages given to companies by virtue of the Act. This makes registering a company extremely important. The Memorandum of Association and Articles of Association must be filed with the State Registrar of Companies in the state where the primary office will be situated in order to establish a company.

The Reserve Bank of India permits foreign companies involved in manufacturing and trade overseas to establish branch offices in India in order to conduct the following operations:

  • to serve as a purchasing or selling agent for the parent firm or other foreign companies in India.
  • to participate in export and import trade operations to encourage potential technological and financial collaboration between Indian companies and foreign companies, as long as the findings of the research work are made available to Indian enterprises.

By submitting form FNC-5 to the Controller, Foreign Investment and Technology Transfer Section of the Reserve Bank of India, a request for approval to open a branch, a project office, or a liaison office is submitted through the Reserve Bank of India. Application for the opening of a project or site office may be submitted on Form FNC-10 to the Reserve Bank of India's regional offices. Whether or not a foreign investor intends to own 100% of the company's ownership, there is no need that they have a local partner. Thus, the public may purchase the share of the equity that is not held by the foreign investor.

Name approval

The Registrar of Companies (ROC) in the State or Union Territory where the company will retain its Registered Office must first approve the name before a company can be officially formed. This approval is granted subject to a number of requirements, such as the absence of an existing company with the same name. Additionally, for a private company, the last words in the name must be "Private Ltd." while for a public company, they must be "Limited." At least four suitable names for the prospective company should be listed in the application, ranked according to preference. If the firm is a private limited company, the name should conclude with the phrase "Private Limited." If the company is a public limited company, the name must include the term "Limited" as the final word.

The ROC typically notifies the applicant whether any of the names requested is accessible within seven days of the day the application was submitted. Once a name has been authorised, it is valid for six months during which time the articles of association and memorandum of association, together with other paperwork, should be filed. If this is not possible, one may submit an application for name renewal and pay additional expenses. Depending on where the business is registered, it typically takes two to three weeks to incorporate after receiving the name clearance.

Filing of company documents with the registrar

The subscriber must submit the following company registration documents to the registrar under whose jurisdiction the prospective company's registered office is located in order to register a company.

  • The memorandum of association and articles of association requires the signature of every subscriber.
  • A statement about adherence to all Act requirements and regulations must be made by the person involved in the company's formation. The declaration also requires the signature of a person listed in the Articles.
  • The following information should be included in an affidavit that is submitted by each subscriber to the Memorandum and each person designated as a first director in the Articles:
  1. Declaration of not having been found guilty of any crime relating to the formation, promotion, or management of any organisation.
  2. In the last five years, he hasn't been held responsible for any fraud or duty breaches to any companies.
  3. To the best of his knowledge, the documents submitted to the registrar are accurate and whole.
  • Before the registered office is established, using the address for correspondence.
  • If the Memorandum's subscriber is an individual, he must submit a form of identification as well as his full name, residence address, and country of citizenship. Prescribed documentation must be given if the subscriber is a body corporate.
  • The information given in the aforementioned point, together with the Director Identification Number, must be provided by everyone listed as a subscriber to the Memorandum in the Articles.
  • The people listed in the Articles as the company's initial directors must provide information about their shareholdings in other companies or corporate bodies as well as their agreement to serve in those roles in the form and manner specified by the Articles.

Certificate of Incorporation

The ROC reviews the paperwork and, if required, gives the authorised person instructions to make the necessary modifications once the fully stamped Memorandum of Association and Articles of Association, documents, and forms have been filed and the filing costs have been paid. The ROC then issues a Certificate of Incorporation, which marks the day the company officially comes into existence. A Certificate of Incorporation is obtained one to two weeks after the Memorandum of Association and Articles of Association are filed. A public company cannot start operations until it receives a Certificate of Commencement of Business from the ROC, but a private firm may do so right away after getting the certificate of incorporation.

Effect of Registration of Company

The effect of company's registration is listed in Section 9 of the 2013 Companies Act; A registered company may perform all the duties of a company formed under the Act, including:

  • The company enjoys perpetual succession and the authority to acquire, keep, and dispose of all types of property. Additionally, it may negotiate, bring a lawsuit, and be sued using the aforementioned name.
  • In addition, as of the date of formation, the company is a different legal entity from the incorporators. The Memorandum and Articles of Association also establish a legally enforceable contract between the company and its members. It has perpetual existence up until it dissolves or the Registrar strikes it from the register.

What if a company is incorporated using false information

If a company is incorporated by providing false or inaccurate information or representations or by omitting significant facts or information from the documents provided, the National Company Law Tribunal may issue the following orders (if an application is filed and the Tribunal is satisfied with it):

  • Pass a resolution to regulate company management. If necessary, it may make revisions to its articles and memorandum. This decision is either in the best interests of the general public or of the company, its shareholders, and its creditors.
  • Make its members' liability unlimited.
  • Order that the company's name be removed from the Registrar of Companies.
  • ordering the firm to liquidate
  • Pass any other orders it deems appropriate.

The Tribunal must give the company a fair chance to present its case before making a decision. The Tribunal should also take into account the company's operations, including any obligations it has contracted or payments it has made for debts.


The government is taking measures to make it simpler for a business to register in India as the Indian economy continues to expand.

The process of forming a company involves many key steps in order to complete the incorporation process. These steps are necessary for the formation and operation of the firm. There are two documents that are crucial at the moment of formation. These are the Articles of Association (AoA) and the Memorandum of Association (MoA).

A company's directors are responsible for doing business. A corporation, whether public or private limited, becomes a juristic person as soon as it is incorporated. Its own name and assets are present. It is a different legal entity from the individuals who formed it.

Learn the practical aspects of CrPC HERE, CPC HERE, IPC HERE, Evidence Act HERE, Family Laws HERE, DV Act HERE

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