Incorporation of Company & Matters Incidental Thereto – Vocabulary

Vocabulary flashcards covering key statutory terms, concepts and procedures from Chapter II of the Companies Act 2013 on incorporation and incidental matters.

Promoter

Person who undertakes promotion activities to form a company and set it going; defined in Sec 2(69).

Incorporation

Legal process by which a company becomes a separate legal entity with perpetual succession.

SPICe+ (INC-32)

Integrated web form for filing company incorporation and 9 other services under MCA.

Memorandum of Association (MOA)

The charter of a company stating its name, registered office, objects, liability, capital, subscription and (for OPC) nominee.

Articles of Association (AOA)

Internal rules and regulations of a company governing its management and member relations.

Entrenchment

Provision in AOA making alteration of specified clauses harder than a special resolution.

Doctrine of Ultra Vires

Principle that acts beyond a company’s stated objects in its MOA are void and cannot be ratified.

Doctrine of Constructive Notice

Legal assumption that outsiders dealing with a company know its public documents (MOA/AOA).

Doctrine of Indoor Management

Exception to constructive notice; outsiders may assume internal procedures have been complied with.

One Person Company (OPC)

Private company with a single member; allowed under Sec 3(1)(c) subject to specific rules.

Nominee (OPC)

Natural person named in OPC’s MOA to become member on death/incapacity of the sole member.

Section 8 Company

Company formed for charitable or not-for-profit objects licensed by the Central Government.

CIN (Corporate Identity Number)

21-digit alphanumeric unique identification allotted to every incorporated company.

Registered Office Clause

MOA clause stating the State in which a company’s registered office is situated.

Object Clause

MOA clause detailing the purposes for which a company is incorporated.

Liability Clause

MOA clause defining members’ liability (limited by shares or guarantee, or unlimited).

Capital Clause

MOA clause stating authorised share capital and division into shares of fixed value.

Subscription Clause

MOA section where subscribers state number of shares they agree to take.

IFSC Company

Company licensed to operate in an International Financial Services Centre, formed only as limited by shares.

Minimum Members

Requirement of 7 for public, 2 for private, 1 for OPC under Sec 3(1).

Section 3A Liability

Members are severally liable for debts incurred after six months if membership falls below statutory minimum.

Certificate of Incorporation (COI)

Registrar-issued document evidencing registration; contains CIN and date of incorporation.

Effect of Registration (Sec 9)

Upon COI, subscribers and future members become a body corporate with perpetual succession and right to sue/be sued.

Alteration of MOA

Change to MOA by special resolution and additional approvals (e.g., CG for name, RD for state shift).

Alteration of AOA

Change to articles by special resolution; CG approval needed for conversion of public into private company.

Entrenchment Notice

Filing with ROC of entrenchment provisions via SPICe+ (on incorporation) or MGT-14 (within 30 days).

Section 10A Declaration

Director’s declaration (INC-20A) within 180 days that subscribers paid for shares and office verified before starting business.

Commencement of Business

Company may begin business/borrowing only after filing INC-20A and office verification under Sec 10A.

Subsidiary Shareholding Prohibition

Sec 19 bars a subsidiary from holding shares in its holding company except as legal representative, trustee, or pre-existing holder.

Service of Documents (Sec 20)

Documents may be served by post, courier or electronic means to company, ROC or members.

Authentication (Sec 21)

Company documents may be signed by KMP or authorised officer/employee.

Execution of Deeds (Sec 22)

Company may execute bills or deeds via authorised person under common seal or signatures of two directors / a director & CS.

Name Reservation

Application in SPICe+ (new) or RUN (change) to ROC; name reserved 20 days (new) or 60 days (change).

Undesirable Names

Names identical, resembling existing company/trademark, offensive or needing CG approval per Sec 4(2)(3).

Registered Office Verification

Filing INC-22 within 30 days of incorporation to prove registered office exists and can receive notices.

Change of Registered Office (Within State, same ROC)

Special resolution and INC-22 filing; no CG approval required.

Change of Registered Office (One ROC to another in same State)

Special resolution plus Regional Director approval (INC-23).

Change of Registered Office (State to State)

Alteration of MOA situation clause with CG approval; file INC-23, advertise INC-26, obtain fresh COI.

MOA Forms (Schedule I)

Tables A-E prescribe model memoranda for different company types.

AOA Forms (Schedule I)

Tables F-J provide model articles for companies limited by shares/guarantee or unlimited.

SPICe+ e-MOA (INC-33)

Electronic memorandum form filed with SPICe+ package.

SPICe+ e-AOA (INC-34)

Electronic articles form filed with SPICe+ package.

Professional Declaration (INC-8)

Statement by advocate/CA/CWA/CS and a director that incorporation requirements are met.

Subscriber Declaration (INC-9)

Affidavit by each subscriber/first director affirming accuracy of filed information and no conviction/fraud.

DIN (Director Identification Number)

Unique number allotted to an individual to act as director; furnished in DIR-12 during incorporation.

Entrenchment Provision

Article clause requiring more stringent procedure than special resolution to alter specified regulations.

Cessation of Sole Member (OPC)

Nominee becomes member; must appoint new nominee within 15 days via INC-4.

Section 8 Licence Revocation

CG may revoke licence for violations; may order winding-up, amalgamation, or rename with ‘Ltd/Pvt Ltd’.

Doctrine of Conclusive Evidence (pre-2013)

Old principle that COI cured all prior defects; diluted under 2013 Act by Sec 7(6)(7).

Alteration Copy Notation (Sec 15)

Every issued copy of MOA/AOA must note alterations; default penalty ₹1,000 per defective copy.

Minimum Board Meetings (OPC)

Only one Board meeting required in each half of calendar year under Sec 173 exemption.

Cessation of Business for Name Strike-off

ROC may remove company if no business/start-up compliance under Sec 10A not met.