COMPANY LAW-I,

STUDY MATERIAL[PPT NO.11]

THIS STUDY MATERIAL IS PREPARED BY

DR. PRADIP KUMAR DAS,
ASSOCIATE PROFESSOR,
DEPARTMENT OF LAW AND GOVERNANCE,
CUSB,
FOR THE STUDENTS
 COMPANY LAW-I,
PROMOTION ACTIVITIES & FORMATION OF A
COMPANY -II
Pre-incorporation contracts & Promoters:
(a). Position before 1963[i.e before passing of Specific Relief Act, 1963]
and
(b). Position since 1963

(a). Position before 1963

❑A pre incorporation contract never binds a company;
❑The company is not entitled to sue on a pre-incorporation contract;
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PROMOTION ACTIVITIES & FORMATION OF A
COMPANY -II
(b). Position since 1963
❑Until the passing of the specific Relief Act, 1963, in India, the promoters found it
very difficult to carry out the work of incorporation.
❑However, the Specific Relief Act, 1963 came as a relief to the promoters.
❑Section 15(h) of the Specific Relief Act, 1963 provides that where the promoters
of a public company have made a contract before its incorporation for the
purposes of the company, and if the contract is warranted by the terms of its
incorporation, the company may enforce it.
❑“Warranted by the terms of incorporation” means- within the scope of the
companies objects as stated in the memorandum.
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COMPANY -II
❑Section 15 of the Specific Relief Act, 1963, also allows the other party to enforce
the contract against the company if-
(i). The company had adopted the same after incorporation, and
(ii). the contract is warranted by the terms of incorporation.

REGISTRATION/ INCORPORATION OF A COMPANY:

❑Section 3 of the Company Act says a company may be formed for any lawful
purposes by seven or more persons in case of a public company or two or more
persons in case of a private company, and one person in case of OPC.
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PROMOTION ACTIVITIES & FORMATION OF A
COMPANY -II
PROCEDURE FOR REGISTRATION/ INCORPORATION OF A
COMPANY:[steps]
1. Decide the type of company i.e whether Public Company or Private Company or
OPC;
2. Application for availability of name:
❑The promoters will obtain the approval of the proposed name from the ROC;
❑The promoters are required to give maximum of 6 proposed names in order of
preference in FORM No.- INC-1.
❑As per section 4, no company shall be registered by a name which is identical
with or resemble too nearly to the name of an existing company registered under
this Act or any previous company law;
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COMPANY -II
❑no company shall be registered by a name where its use by the company will
constitute an offence under any law for the time being in force, or is undesirable
in the opinion of the central government.
3. Preparation of Memorandum of Association and Articles of Association:

❑Promoters shall take necessary steps to prepare MOA & AOA.

❑Promoters may take the help of legal experts , a solicitor, C.A., Cost Accountant,
or CS in this regard.
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PROMOTION ACTIVITIES & FORMATION OF A
COMPANY -II
❑Section 7 and Rule 13 of the Companies (Incorporation) Rules, 2014 require that
MOA & AOA of the company shall be signed by each subscriber to the
Memorandum, who shall add his name, address, description and occupation, if
any, in the presence of at least one witness who shall attest the signature and
shall likewise sign and add his name, address, description and occupation, if any.
4. Other Documents which are to be submitted before the ROC:
i.Power of Attorney;
ii. Consent letter of the Directors;
iii.The particulars of Managers etc.
iv. Affidavit by subscribers to the memorandum and first directors;
v. Address for communication and notice of registered address
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COMPANY -II
5. Statutory Declaration;

6. Filing of documents for registration & issue of certificate of incorporation to the

company by the ROC.