CH-2

INCORPORATION OF COMPANY &

MATTERS INCIDENTAL THERETO

What we will discuss in this lesson ?

• Introduction
• Formation of company
• Questions
 INTRODUCTION
• As per Sec. 2(22) Companies Act,2013, a company
registered under existing company law or any previous
company law.
• A company is a separate legal entity with perpetual
succession for lawful purpose.
• Persons who initiate promotion of a company are known
as Promoters
 Sec. 2(69) defines Promoters as a person:
(a) (b) (c)
who has named as who has control with whose
such in over the affairs advice, directions
prospectus or of the Co. , the BOD of Co.
identified by Co. directly or accustomed to act.
in its Annual indirectly.
Return.
NOTE: A person who is acting merely in a professional, shall not
be regarded as promoter.
 FORMATION OF COMPANY
Company are broadly classified as follows:

On the basis of No. of On the basis of Others :

members : Liability : • Sec. 8 Company
• One Person • Limited by Share • Holding &
Company
• Limited by Subsidiary Co.
• Private Limited
Guarantee • Foreign Co. etc.
Company
• Public Limited • Unlimited
Company Company
 Sec.3 deals with the basic requirement to form Co.

• In case of, One person Co. - 1 person

Private Ltd. Co. - 2 or more person
Public Co. - 7 or more person
• Can form a Co. for lawful purpose,
• By subscribing their name in MOA.
• And by complying all the requirements of Companies
Act,2013
 QUESTIONS ?
Q.1 CA Ram initiates formation of Co. for M/s XYZ. Is CA Ram
be regarded as Promoter?
Ans. No, person in professional capacity is not regarded as
promoter.
Q.2 If Company’s all directors & shareholder dies, then company
will also comes to end?
Ans. No, Co.’s existence is never-ending regardless of its
members & directors. It only comes to end by the procedure of
law.