Course Code: BSL605 Course Title: Legal Aspects of Business

Course Instructor: Dr. Sachin

Academic Task No.: CA-3 Academic Task Title: Assignment

Date of Allotment: 14 September, 2020 Date of submission: 5 October 2020

Student’s Roll no:Q1943 (A16) Student’s Reg. no: 11907407

Evaluation Parameters:

Learning Outcomes: Gain knowledge about legal aspects of business. What are different types of
agreements and acts? What is the procedure and documents required to start frim.

Declaration: I declare that this Assignment is my individual work. I have not copied it from any other
student’s work or from any other source except where due acknowledgement is made explicitly in the
text, nor has any part been written for me by any other person.

Student’s Signature: Rahul Sethi

Evaluator’s comments (For Instructor’s use only)

General Observations Suggestions for Improvement Best part of assignment

Evaluator’s Signature and Date:

Marks Obtained: _______________ Max. Marks: ___________

Introduction to Company
The company offered by me is AutoMark. This company will be working towards innovation in
automobile sector. This company makes cars and every spare part of cars and bikes. Some of the
spare parts are music system, alloys, engine parts, nuts, bolts and many more. It will also deals in
import and export of spare parts. This company is registered under Companies Amendment
Rules, 2020. The owner of the company is Mr. Rahul Sethi and it has 19 more members.

Eligibility criteria for Public Ltd Company

 Minimum Seven People - Minimum seven people are required to start the public limited
company in India. These companies shall have minimum three directors. The same seven
people can become shareholder and director of the company. However, maximum any
number of people can become shareholder in the public limited company.
 No minimum capital - Capital of the business is depending on the need of the business
and statutory no minimum capital is required to start the public limited company.
However, minimum authorized and subscribed share capital required for public company
is Rupees 5 lakh.
 One Resident Director - Among director, one person must be resident Indian.
 Unique Name - The name of the public limited company should be unique and should
not be similar to the any existing company name or trademark.

Documents Required
 Proof of identity of all the shareholders and directors

 Proof of address of all the directors and the shareholders

 PAN number of all the shareholders and directors

 Utility Bill of the proposed office i.e. proposed registered office for the company

 A NOC (No Objection Certificate) from the landlord where the office of the company
will be situated

 Director Identification Number (DIN) of all the directors

 Digital Signature Certificate (DSC) of the directors

 Memorandum of Association (MOA)

 Articles of association (AOA)

Procedure of Company Formation (Under Companies Incorporation

Amendment Rules 2020)
As the Govt. of India is working towards ease of doing business, So they have introduced new
Companies Incorporation Amendment Rule 2020 which will help businesses for fast paperwork
and easy approach. Under this Rule old spice 32 form will be replaced by spice plus form. This
spice plus form is web based. SPICE stand for Simplified Performa for Incorporating Company
electronically.

Steps to be followed while registering

Name Reservation of Company

Under this step company owner has to select or suggest some names for his or her company.
Name will be reserved by using Part 1 of Spice plus form. Here the company will suggest some
names and if they do not resemble with any other company name then they can choose the name
as per their choice later on.

Part 1 of Spice plus form

1-Type Of Company Public Company

a) LLPIN 12345678
b) Class of Company Public Company
c) Category of Company Manufacturing Spare Parts of Automobile
d) Sub Category
2- Main Division of Industrial Activity Automobile
Description of Main Division Our company will be working towards brining
innovation in automobile sector by producing
high quality products.
3- Particulars of the proposed or Approved AutoBest
Names AutoMark

Fees for Incorporation

After the first step company owner has to submit fees for incorporation. It depends on the capital
structure of company. In case of company having share capital up to 15 lakh, they don’t have to
give fees of incorporation. But if a company has a share capital more than 15 lakh, then they are
applicable for incorporation fees and they have to submit Rupee 500. In case of company not
having share capital but having more than 20 members they are also applicable for paying fees of
incorporation. In case company has up to 20 numbers they do not have to pay fees.

In case of our company we have up to up to 20 members’ and we have a share capital of more
than 15 Lakh so we have to pay the fees of incorporation.
Drafting of documents and filling of e-forms.

After filling of Part A of Spice Plus form, Incorporation application will be submitted as
continuous process. Before drafting any document we have to pay Incorporation fees if
applicable. When name of company is approved then we can apply for registration of company
within 60 days of approval. Some forms and documents are required for approval ex MOA and
AOA has to be signed by 3 shareholders with their handwriting, his/her father name , occupation,
address and number of shares subscribed for and witnessed by at least one person.

Some documents that must be attached by company

1- MOA
2- AOA
3- Declaration by first director and subscriber
4- Notice of situation of registered office of the company (Form-18)
5- Declaration of Compliance (Form-1)
6- Particulars of the Directors Managers or Secretary (Form- 32)

While submitting the e-form we must attach digital signature and pay the required fees. We have
to send physical copy of MOA and AOA to the ROC.

The company should apply for Certificate of Incorporation after the registration is completed
under form no INC- 11.

Certificate of Commencement

Every company must obtain the commencement of business certificate before doing any
business. As per company ordinance 2018, every company has to file a declaration form 20A
within 180 days of the date of incorporation of the company for issuing certificate of
commencement.

MOA

It is a charter which confines the power of company. It contain the fundamental conditions and
anything done beyond the objects specified in MOA will be ultra vires. MOA must be signed by
7 members in case of public ltd company.

Memorandum of association
 Of

AutoMark Public Ltd

I. The name of company is AutoMArk Public Ltd.

II. The Registered Office of the Company will be situated in the National Capital
Territory of Delhi.

III. THE OBJECTS TO BE PURSUED BY THE COMPANY ON ITS INCORPORATION ARE:—

1. To manufacture, assemble, buy, sell, distribute, import, export, alter, remodel, hire,
exchange, repair, service and otherwise deal in motor cycles and motor vehicles of every
kind and description, component parts thereof spare parts, accessories, tools, implements,
materials thereof and products for the transport or conveyance of passengers,
merchandise and goods of every description, whether propelled by using gas, petroleum,
diesel oil, steam, oil, vapour, electricity or any other motive or mechanical power.
2. To manufacture, assemble, buy, sell, distribute, import, export, alter, remodel, hire,
exchange, repair, service and otherwise deal in all types of parts, gears, transmission
axles, joints, springs, lamps, chains, bodies, frames, chassis, engines, tyres, tubes,
batteries, goods, instruments, appliances and apparatus, equipment, components,
accessories, raw materials of every kind and description required for or capable of being
used for or in connection with the objects described in 1 above.
3. To manufacture, assemble, buy, sell, distribute, import, export, alter, remodel, hire,
exchange, repair, service and otherwise deal in general purpose engines and machinery
incorporating such engines therein, including, but not limited to generators, tillers, lawn
movers, outboard engines and other engines and products of like nature and all types of
parts, frames, goods, instruments, appliances and apparatus equipment, components,
accessories, raw materials of every kind and description required for or capable of being
used for or in connection with the foregoing.
4. To carry on all or any of the business of repair-shop operators, service shop operators,
filling station operators, engineers, machinists, tool makers, wire drawers, millwrights,
founders, tube makers, iron and steel convertors, smiths, metal workers, welders,
saddlers, metallurgists, moulders, fitters, galvanisers, electroplaters, enamellers,
japanners, annealers, painters and packing case makers.
5. To produce, buy, sell, import, export or otherwise deal in including participation,
exhibition and distribution of television and other media programs, television films,
cinematographic films, video films, video software including their copyrights and to
establish, purchase, take on lease or hire or otherwise to acquire and maintain, hire, give
on lease or otherwise studios, cinema halls, picture places, theatres for exhibition,
production, processing and printing of films.

6. To own, develop, purchase or by any other means acquire and protect, prolong and renew
any patents, trademarks, rights (including intellectual property rights), brevets,
inventions, licenses, protections, concessions or any other such right which may appear
likely to be advantageous or useful to the Company and to spend money directly or
indirectly in carrying out research and development activities, experimenting upon,
testing and improving or seeking to improve any patents, inventions, or rights (including
 intellectual property rights), licenses, protections, concessions or any other such right
which the Company may develop, get developed, acquire or propose to acquire and to
use, turn to account, manufacture under, exploit, grant licenses, sublicenses, concessions,
right of use, privileges or enter into such other arrangements, for consideration or
otherwise, in respect of aforesaid patents, trademarks, rights (including intellectual
property rights), brevets, inventions, licenses, protections, concessions or any other such
right.

IV. The liability of the members is limited and this liability is limited to the amount unpaid, if
any, on the shares held by them.

V. The Authorised Share Capital of the Company is ` 58,00,00,000 (Rupees fifty eight
crores) divided into 25,00,00,000 (twenty five crores) equity shares of ` 2 (Rupees two)
each, 4,00,000 (four lacs) cumulative redeemable preference shares of ` 100 (Rupees one
hundred) each, and 4,00,000 (four lacs) cumulative convertible preference shares of ` 100
(Rupees one hundred) each with power to increase or reduce the same from time to time
and sub-divide or consolidate or otherwise change the denomination of any shares or
extinguish uncalled liability as may be thought fit.
We, the several persons, whose names and addresses are subscribed, are desirous of being
formed into a company in pursuance of this memorandum of association, and we
respectively agree to take the number of shares in the capital of the Company set opposite
to their name.

Names, addresses, Number of Equity Shares Name, Address, and

Description, and taken by each subscriber Description of Witness
Occupation of each
subscriber and Signature
Rahul Sethi , 2 (Two)
S/o Diwan Chand Sethi,
R/o B-1/142, Janakpuri
New Delhi
Udayveer Singh, 2(Two)
S/o Amanjot Singh,
R/o Sec 51 Chandigarh

Manik Sethi 2(Two)

S/o Krishan Sethi
R/o Sirsa, Haryana
This information has to be filled in MOA.

AOA

An Article of Association ( AoA ) lays down the rules and regulations for the internal
management of the company. It specifies the duties, rights, and powers of the management of the
comp An Article of Association ( AoA ) lays down the rules and regulations for the internal
management of the company. It specifies the duties, rights, and powers of the management of the
company.

Article of Association

Of

AutoMark

Shares

 Share Capital - The Authorised Share Capital of the Company is as stated in Clause V of
the Memorandum with the rights, privileges and conditions attached thereto as are
provided by the Articles for the time being. The Company shall have power to increase,
reduce, consolidate, sub-divide or otherwise alter the Share Capital and to divide the
Shares in the Share Capital for the time being into several classes and to attach thereof
respectively such preferential or other rights, privileges and conditions in such manner as
may be permitted by the Act or provided by the Articles of the Company for the time
being.
 Allotment of Shares

Allotment of shares will be under the control of Board, who may issue, allot or otherwise dispose
off the same or any of them, on such terms and conditions, at such times, either at par or at a
premium and for such consideration as the Board thinks fit.

 Installment of Shares to be duly paid

If, by the conditions of allotment of any share, the whole or part of the amount or issue price
thereof shall be payable by installments, every such installment shall, when due, be paid to the
Company by the Person who, for the time being, shall be the registered holder of the Share or by
his executor or administrator.
  Liability of joint holders of Shares

The joint-holders of a Share shall be severally as well as jointly liable for the payment of all
installments and calls due in respect of such Share.

CALLS

 Calls

The Board may, from time to time, subject to the sanction of shareholders and subject to the
terms on which any Shares may have been issued and subject to the provisions of Section 49 of
the Act, make such calls as the Board thinks fit upon the Members in respect of all moneys
unpaid on the Shares held by them respectively and not by the conditions of allotment thereof
made payable at fixed times and each Member shall pay the amount of every call so made on
him to the persons and at the times and places appointed by the Board. A call may be made
payable by installments and shall be deemed to have been made when the resolution of the Board
authorising such call was passed.

 Restriction on power to make calls

Notice of any call as may be prescribed shall be given specifying the time and place of payment
and to whom such call be paid.

 Revocation of call

A call may be revoked or postponed at the discretion of the Board.

FORFEITURE AND LIEN

 If calls or installment not paid notice may be given

If any Member fails to pay any call or installment of a call on or before the day appointed for the
payment of the same, the Board may, at any time, during such time as the call or installment
remains unpaid, serve notice on such Member requiring him to pay the same, together with any
interest that may have accrued and all expenses that may have been incurred by the Company by
reason of such non-payment.

 Forfeited Share to become property of the Company

Any Share so forfeited shall be deemed to be the property of the Company and the Board may
sell, re- allot or otherwise dispose off the same in such manner as it thinks fit.

 Power to cancel forfeiture

The Board may, at any time before any Shares so forfeited shall have been sold, re-allotted or
otherwise disposed off, cancel the forfeiture thereof upon such conditions as it thinks fit.

TRANSFER AND TRANSMISSION

 No transfer to a person of unsound mind etc

No transfer shall be made to a person of unsound mind and no transfer of partly paid Shares shall
be made to a minor.

 Fee on registration of transfer

No fee shall be payable to the Company in respect of transfer or transmission of any Shares in
the Company.

INCREASE AND REDUCTION OF CAPITAL

 Power to increase Capital

The Company may, by an ordinary resolution passed by the Members in a general meeting or by
Postal Ballot, increase its capital, from time to time, by creation of new Shares of such amounts
as may be deemed expedient in accordance with the applicable provisions of the Act.

 Reduction of Share Capital

The Company may, subject to the applicable provisions of the Act and Rules, from time to time,
by special resolution reduce its capital and any capital redemption reserve account or securities
premium account, in any manner and with and subject to any incident authorized and consent
required by law.

GENERAL MEETINGS

 When Annual General Meeting to be held

“Annual General Meeting” of the Company shall be held within such intervals as are specified in
the Act and subject to the provisions of the Act, during such business hours and places as may be
determined by the Board under the provisions of the Act or the Rules made thereunder. Any
other meeting of the Company shall be called as “Extra-ordinary General Meeting”.

 Calling of a general meeting by circulation

The Board may also decide to call a general meeting by passing a resolution by circulation and
the resolution so passed would be as effective as a resolution passed at the Board meeting.

DIRECTORS

 Number of Directors

The number of Directors of the Company shall not be less than three (3) and not more than
fifteen (15).

Provided that the Company may appoint more than fifteen (15) directors after passing a special
resolution of members. The composition of the Board will be in consonance with the Act and the
Equity Listing Agreement.

 Company to increase or reduce number of Directors

The Company may from time to time increase or reduce the number of Directors within the
limits fixed.

 Power of Directors to add their number

The Board shall have power at any time and from time to time to appoint any person as an
additional Director as an addition to the Board but so that the total numbers of Directors should
not exceed the limit.

DIVIDENDS

 Declaration of Dividends

The Company in a general meeting may declare dividends to be paid to the Members according
to their rights and interest in the profits at fix the time for payment. The dividend declared shall
not exceed the amount recommended by the Board, but, the Company in a general meeting may
declare a dividend, which is lesser in amount than as recommended by the Board.

BOOKS AND DOCUMENTS

 Books of account to be kept

The Board shall cause proper books of account to be kept in accordance with Section 128 of the
Act.

WINDING-UP

If the Company shall be wound up and the assets available for distribution among Members as
such shall not be sufficient to repay the whole of the Paid-up capital, such assets shall be
distributed so that as nearly as may be and the losses shall be borne by the Members in
proportion to the capital paid-up at the commencement of the winding-up.

If in a winding-up assets available for distribution among the Members shall be more than
sufficient to repay the whole of the capital paid up at the commencement of the winding-up, the
excess shall be distributed amongst the Members.