Enrolment and Formation of a Company in India

Enrolment and Formation of a Company in India
Enrolment and Formation of a Company in India

The Companies Act of 2013 establishes the requirements and company incorporation procedures required to form a corporation. This page will outline each of the provisions and regulations stated in the Act. To begin, let us identify a corporation’s proponents.



According to Section 2(69) of the Companies Act of 2013, promoters are those who:

  • Is identified as a promoter in the company’s prospectus or annual accounts.
  • Directly or indirectly controls the business of a firm.
  • Offers guidance, guidance, or instructions to the Board of Directors.


As a result, promoters are people who come up with the concept for the business, establish it, and register it. However, solicitors, accountants, and other professionals operating in their professional capacity are NOT promoters of the company


Company Formation

Section 3 of the Companies Act of 2013, as revised, outlines the necessary requirements for forming a company as follows:

  •   To start a public corporation, 7 or more people must approve the memo and register the organization for any recognized purpose.
  •   A private corporation can be founded in the same way by two or more people.
  •   A single individual can start a one-person corporation.


Company Registration

The method for registering a firm is outlined in Section 7 of the Companies Act of 2013. 

Submitting company incorporation documentation to the registrar.

  1. To form a corporation, the subscriber must submit the following documents to the registrar in whose jurisdiction the prospective company’s registered office is located.
  2. The Memorandum and Articles of Incorporation. All subscribers must sign the MoU.
  3. The person involved in the establishment of the firm must make a certification that all the Act’s criteria and restrictions have been met. The declaration must also be signed by a person listed in the Articles.
  4. Each Memorandum subscriber and people identified as initial directors in the Articles must provide an affidavit including the following information:
  5. Non-conviction of any felony related to the formation, advancement, or management of any organization.
  6. In the previous five years, he has not been found guilty of fraud or breach of duty to any organization.
  7. The documents provided to the registrar are complete and correct to the best of his knowledge.
  8. Mailing address till the registered office is established.
  9. If the Memorandum subscriber is an individual, he must provide his full name, address, nationality, and identification. If the subscriber is a corporation, the necessary papers must be provided.
  10. Individuals named in the Articles as Memorandum subscribers must supply the information listed above, as well as the Director Identification Number.
  11. The people named as the business’s original directors in the Articles must state their ownership in other firms or corporate bodies, as well as their commitment to serve as directors of the company in the form and manner specified.


Making the Certificate of Incorporation Available

After receiving the information and business registration paperwork, the Registrar registers all information and documents and issues a Certificate of Incorporation in the desired form.


Corporate Identity Number (CIN)

The Registrar also provides the business a Corporate Identification Number (CIN), which acts as its distinctive identification. The CIN is assigned the day the firm is formed. This date is printed on the certificate.

Keeping copies of company registration documents until the corporation is dissolved, copies of all information and documents must be kept.

False information is given at the time of incorporation

  • During the formation procedure, a person can form a company:
  • Provide inaccurate or fraudulent information
  • On purpose, omit any vital information from the documents submitted to the Registrar for incorporation.

In such cases, the person may face criminal charges for fraud under Section 447.


The company is already incorporated based on false information

If a company has already been founded but it is later revealed that the information or papers provided were false or incorrect, the promoters, initial directors, and anybody making a declaration are all liable for fraud under Section 447.


Order of the National Company Law Tribunal (NCLT)

  • The Tribunal can issue the following orders if a business is created by supplying false or erroneous information or representations, or by hiding significant facts or information in the papers presented (if an application is submitted and the Tribunal is pleased with it):
  • Make an order that governs the company’s management. It has the authority to alter its Memorandum and Articles if required. This order is either in the best interests of the public or of the corporation, its members, and creditors.
  • Make its members’ responsibilities unlimited.
  • Ask for the name of the firm to be deleted from the Registrar of Companies.
  • Declare the corporation as insolvent.
  • Issue any further orders it sees suitable
  • Before making an order, the Tribunal must provide the company a fair chance to submit its case. Furthermore, the Tribunal shall examine the company’s transactions, such as agreed responsibilities or payment of any liability.


The Significance of a Company’s Registration

According to Section 9 of the Companies Act of 2013, these are the implications of registering a firm: 

  • The subscribers to the Memorandum and all subsequent members of the company form a body corporate as of the date of incorporation.
  • A registered company can perform all the activities of a business formed under the Act. Furthermore, the business has an indefinite life and the power to acquire, keep and dispose of all types of property. It can also contract, sue, and be sued under that name.
  • Furthermore, as of the date of formation, the company becomes a legal entity distinct from the incorporators. In addition, as stated in the Memorandum and Articles of Association, a binding contract exists between the firm and its members. It has eternal life until the business dissolves or the Registrar removes it from the register.


Written by Akash Singh

Hello, My name is Akash Singh, and I work as a content writer at Asian Reads. When I start writing a blog or an article, I do a lot of research on the subject. I also frequently try new and imaginative writing techniques, which intrigue me. I like learning about a subject through reading reliable books as well as published research and reporting from respected news organizations, journals, and other sources.

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