PromotersSection 2(69) of the businesses Act, 2013, defines promoters as a private who:-
- Is named as a promoter within the prospectus or within the annual returns of the corporate .
- Controls the affairs of a corporation , directly or indirectly.
- Advises, directs, or instructs the Board of Directors.
- Hence, we will say that promoters are people that originally come up with the thought of the corporate , form it and register it.
Formation of a corporationSection 3 of the businesses Act, 2013, details the essential requirements of forming a corporation as follows:
- Formation of a public company involves 7 or more people that subscribe their names to the memorandum and register the corporate for any lawful purpose.
- Similarly, 2 or more people can form a personal company.
- One person can form a One-person company.
Registration or Incorporation of a corporationSection 7 of the businesses Act, 2013, details the procedure for incorporation of a corporation . Here is that the procedure:
Filing of company registration papers with the registrar
To incorporate a corporation , the subscriber has got to file the subsequent company registration papers with the registrar within whose jurisdiction the situation of the registered office of the proposed company falls.
- The Memorandum and Articles of the corporate .
- All subscribers need to check in the memorandum.
- The one that is engaged within the formation of the corporate has got to provides a declaration regarding compliance of all the wants and rules of the Act.
- An individual named within the Articles also has got to sign the declaration.
- Each subscriber to the Memorandum and individuals named as first directors within the Articles should submit an affidavit with the subsequent details:
- Declaration regarding non-conviction of any offence with reference to the formation, promotion, or management of any company.
- He has not been found guilty of fraud or any breach of duty to any company within the last five years.
- The documents filed with the registrar are complete and faithful the simplest of his knowledge.
- Address for correspondence until the registered office is set-up.
- If the subscriber to the Memorandum is a private , then he must provide his full name, residential address, and nationality along side a symbol of identity. If the subscriber may be a body corporate, then prescribed documents got to be provided.
Individuals mentioned as subscribers to the Memorandum within the Articles got to provide the small print laid out in the purpose above along side the Director number .
The individuals mentioned as first directors of the corporate within the Articles must provide particulars of interests in other firms or bodies corporate along side their consent to act as directors of the corporate as per the prescribed form and manner.
Issuing the Certificate of Incorporation
Once the Registrar receives the knowledge and company registration papers, he registers all information and documents and issues a Certificate of Incorporation within the prescribed form.
Corporate Identity Number (CIN)
The Registrar also allocates a company Identity Number (CIN) to the corporate which may be a distinct identity for the corporate . The allotment of CIN is on and from the company’s incorporation date. The certificate carries this date.
Maintaining copies of Company registration papers
The company must maintain copies of all information and documents until dissolution. Furnishing false information at the time of incorporation during the formation of a corporation , a private can.
Furnish incorrect or false information
Suppress any material information within the documents provided to the Registrar for the incorporation, intentionally
In such cases, the individual is responsible for action for fraud under section 447.
The company is already incorporated supported false informationIf a corporation is already incorporated but it's found at a later date that the knowledge or documents submitted were false or incorrect, then the promoters, first directors, and persons making a declaration is responsible for action for fraud under section 447.
Order of the National Company Law Tribunal (NCLT)
If a corporation is incorporated by furnishing false or misinformation or representation or suppressing material facts or information within the documents furnished, the Tribunal can pass the subsequent orders (if an application is formed and therefore the Tribunal is satisfied with it):
Pass an order to manage the management of the corporate . It can include changes in its Memorandum and Articles if required. This order is either publicly interest or within the interest of the corporate and its members and creditors.
Make the liability of its members unlimited.
- Order removal of the name of the corporate from the Registrar of Companies
- Order the corporate to wind-up
- Pass the other order because it deems fit
Before passing an order, the Tribunal has got to give the corporate an inexpensive opportunity to state its case. Also, the Tribunal should consider the transactions of the corporate including obligations contracted or payment of any liability.
Effect of Registration of a corporationAccording to Section 9 of the businesses Act, 2013, these are the consequences of registration of a company:
From the date of incorporation, the subscribers to the Memorandum and every one subsequent members of the corporate are a body corporate.
A registered company can exercise all functions of a corporation incorporated under the Act. Also, the corporate has perpetual succession with power to accumulate , hold, and eliminate property of all forms. Also, it can contract, sue and be sued by the said name.