Incorporation of Company & Matters Incidental Thereto - VOCABULARY Flashcards

A set of vocabulary-style flashcards covering key terms and concepts from the lecture notes on incorporation of companies and related matters.

Memorandum of Association (MOA)

The fundamental document for the formation of a company; defines its relationship with outsiders and contains Name Clause, Situation (registered office), Objects Clause, Liability Clause, Capital Clause, Association/Subscription Clause, and Nomination Clause (OPC).

Articles of Association (AOA)

Internal rules of a company; complements the MOA; governs management and members’ rights; can include entrenchment provisions to protect certain clauses.

One Person Company (OPC)

A private company with a single member providing limited liability; eligible natural person (Indian citizen, resident in India or abroad); requires a nominee; cannot be converted into a Section 8 company and has specific restrictions.

Section 8 Company (Not-for-Profit)

A company licensed by the Central Government under Section 8 to promote charitable objects; profits must be applied to its objectives and no dividend to members; license conditions apply.

Not-for-Profit Organization

Organizations formed under Section 8 that pursue charitable, educational, or social objectives rather than profit-making activities.

SPICe+ (Simplified Proforma for Incorporating Company Electronically Plus)

An integrated online form/process offering multiple services for company incorporation, including MOA/AOA, directors, and registration, to streamline starting a business.

Corporate Identity Number (CIN)

A 21-character alphanumeric code assigned to a company; encodes listing status, state, year of incorporation, company type, and ROC registration number.

Certificate of Incorporation

Official certificate issued by the Registrar confirming registration; evidence of incorporation but not conclusive proof of all pre- or post-incorporation matters.

Registered Office

The official address for service of notices and communications; MOA’s Situation Clause; must be a physical location and verified; changes may require approvals.

Effect of Registration (Section 9)

From the date of incorporation, the company becomes a body corporate with perpetual succession, can own property, contract, sue and be sued, and operate under its memorandum and articles.

MOA vs AOA (Differences)

MOA defines external powers/relationship with outsiders; AOA governs internal management; MOA is supreme over AOA in conflicts with law; MOA sets scope (ultra vires if exceeded).

Name Clause (MOA)

MOA clause stating the company’s name; suffixes: ‘Limited’ for public, ‘Private Limited’ for private; for some IFSC variants, special suffixes apply.

Situation Clause (MOA)

MOA clause indicating the registered office location (state); important for domicile, jurisdiction, and statutory books location.

Objects Clause (MOA)

MOA clause specifying the company’s objects; acts beyond the objects are ultra vires and void; can be amended under prescribed procedures.

Liability Clause (MOA)

For share-capital companies: liability is limited to unpaid amount on shares; for companies limited by guarantee: liability is the amount a member agrees to contribute on winding up.

Capital Clause (MOA)

For companies with share capital, states authorised capital, division into shares, and number of shares subscribers agree to take.

Subscription Clause (MOA)

MOA clause indicating the number of shares each subscriber agrees to take; part of MOA for share-capital companies.

Nomination Clause (OPC)

MOA clause naming the nominee who will become a member on subscriber’s death or incapacity (OPC-specific).

Ultra Vires

Acts done beyond the scope of the MOA/objects; considered void and unenforceable; may be restrained by injunction.

Constructive Notice

Outsiders are presumed to know the contents of MOA and AOA since they are public documents; failure to know is no defense.

Indoor Management (Turquand’s Rule)

Outsiders dealing with a company may presume internal proceedings are properly conducted; exceptions apply (knowledge of irregularity, negligence, forgery, etc.).

Override Provisions (Section 6)

The provisions of the Companies Act override any conflicting MOA/AOA or agreements; where law is explicit, the Act prevails.

Alteration of MOA (Section 13)

MOA can be altered by special resolution; filing of the special resolution with the Registrar; binding effect after registration.

Alteration of AOA (Section 14)

AOA can be altered by special resolution; certain conversions (private/public) may require government/Regional Director approval; copies filed with Registrar.

Change of Registered Office (Section 12)

Alteration of the registered office location within or across states; requires special resolution and, if across states, approval of Regional Director; INC forms (INC-23, INC-28) used.

Service of Documents (Section 20)

Mode of serving documents on a company, officers, members, or Registrar (post, speed post, courier, or electronic means); depositories may use electronic notices.

Authentication of Documents (Section 21)

Documents/proceedings requiring authentication may be signed by Key Managerial Personnel or an authorized officer; for certain IFSCs, scope may vary.

Execution of Bills of Exchange (Section 22)

Bills, hundis, or promissory notes are binding when signed on behalf of the company by an authorized person acting under its authority.

Declaration of Compliance (INC-8)

A professional declaration (advocate/CA/CMA/CS) that registration requirements have been satisfied and filings completed.

Declaration by Subscribers/Directors (INC-9, DIR-2/12 forms)

Declarations confirming correctness of information filed with ROC and describing directors’/subscribers’ details for incorporation.

Entrenchment (Model in AOA)

Entrenchment provisions make certain articles harder to alter; can be included at formation or by amendment and require ROC notice.