Que5.5. Explain the conformation of a company under Companies Act, 2013? Also describe the way to be taken to incorporate a new company. Answer Company conformation under the Companies Act, 2013 1. Under this act, a company may be formed for any legal purpose by seven or further members to incorporate a public company and two or further members for a private company or by a single person as One Person Company. Business Associations &E-Governance 5 – 8 P( NCC- Sem- 5 & 6) 2. The company must subscribe their names into a memorandum and must misbehave with all the enrollment conditions under the Companies Act, 2013. Steps to be taken to get a new company incorporated 1. elect at least one suitable name( outside of six names), reflective of the main objects of the company. 2. insure that the name doesn’t act the name of any other formerly registered company by serving the services of checking name vacuity on the gate. 3. Apply to the concerned RoC to ascertain the vacuity ofname.However, the stoner has to apply for a fresh name on the same operation, If proposed name isn’t available. 4. After the name blessing the aspirant can apply for enrollment of the new company. 5. Arrange for the drafting of the memorandum and papers of association by the solicitors, vetting of the same by RoC and printing of the same. 6. Arrange for stamping of the memorandum and papers with the applicable stamp duty. 7. Login to the portal and fill the following forms and attach the obligatory documents listed in the eFormi. Declaration of compliance( Form- 1). ii. Notice of situation of listed office of the company( Form- 18). iii. Particulars of the Director’s, Manager or Secretary( Form- 32). 8. Submit the eForms after attaching the digital hand; pay the needful form and enrollment freights and shoot the physical dupe of Memorandum and Article of Association to the RoC. 9. After processing of the Form is complete and Commercial Identity is generated gain Certificate of Incorporation from RoC. Que5.6. Explain the Memorandum of Association of a company. Answer 1. The Memorandum of Association( MOA) of a company defines the constitution and the compass of powers of the company. In other words, the MOA is the foundation on which the company is erected. 2. It identifies the compass of company’s operations and determines the boundaries it can not cross. 3. It’s a public document according to Section 399 of the Companies Act, 2013. 4. It contains details about the powers and rights of the company. Content of the MOA The following information is obligatory in an MOA 1. Name Clause i. For a public limited company, the name of the company must have the word’ Limited’ as the last word. ii. For the private limited company, the name of the company must have the words’ Private Limited’ as the last words. 2. Registered Office Clause i. It must specify the State in which the listed office of the company will be positioned. 3. Object Clause i. It must specify the objects for which the company is being incorporated.ii.However, also it can change its name within six months of changing its conditioning, If a company changes its conditioning which aren’t reflected in its name. 4. Liability Clause i. It should specify the liability of the members of the company, whether limited or unlimited. ii. For a company limited by shares- it should specify if the liability of its members is limited to any overdue quantum on the shares that they hold. iii. For a company limited by guarantee- it should specify the quantum accepted by each member to contribute to a. The means of the company when it winds- up. b. The costs, charges, and charges of winding up and the adaptation of the rights of the contributors among themselves. 5. Capital Clause i. This is valid only for companies having share capital. ii. These companies must specify the quantum of Authorized capital divided into shares of fixed quantities. iii. Further, it must state the names of each member and the number of shares against their names. 6. Association Clause i. The MOA must easily specify the desire of the subscriber to form a company. 7. For One- Person- Company i. The MOA must specify the name of the person who becomes a member of the company in the event of the death of the subscriber. Que5.7. What are the papers of Association( AoA) of a company? Answer 1. The Articles of Association( AoA) is a document that defines the purpose of a company and specifies the regulations for its operations. 2. The document outlines how tasks should be fulfilled within an association, including the medication and operation of fiscal records, and the process of director movables . factors of the Articles of Association It includes the following 1. Company Name i. A company must borrow an sanctioned name as a legal reality. It must be present in the papers of association. ii. generally, the following suffixes”Pvt.Ltd.” or”Ltd.” are used to show that an reality is a company. 2. Purpose of the Companyi. Companies are incorporated for a specific purpose. Primarily, it’s a forprofit reason to pursue a certain thing by delivering value to society. ii. The purpose of the association must be easily stated in the papers of association. 3. Share Capital i. The papers of association will state the number and type of shares comprising a company’s capital. 4. Organization of the Company i. The document includes legal information about the company, including the enrollment address, the number of directors and workers, and the identity of the authors and original shareholders. 5. Shareholder Meetings i. The first general shareholder meeting vittles are listed in the shareholder meetings section. ii. Notices, judgments , and votes are detailed as well in the section, governing posterior periodic shareholder meetings. Que5.8. separate between Memorandum and Articles of Association. AnswerS. No. Memorandum Articles Que5.9. What do you understand by the term prospectus? Mention the contents of prospectus. What are the types of prospectus? 1. Contains abecedarian conditions upon which the company is incorporated. 2. Meant for the benefit and clarity of the public and the creditors, and the shareholders. 3. Lays down the area beyond which the company’s conduct can not go. 4. Memorandum lays down the parameters for the papers to serve. 5. Can only be altered under specific circumstances and only as per the vittles of the Companies Act, 2013. authorization of the Central Government is also needed in certain cases. 6. Memorandum can not include vittles contrary to the Companies Act. Memorandum is only attachment to the Companies Act. 7. Acts done beyond the memorandum are extremist vires and can not be ratified indeed by the shareholders. Contain the vittles for internal regulations of the company. Regulate the relationship between the company and its members, as well amongst the members themselves. papers establish the regulations for working within that area. papers define details within those parameters. papers can be altered a lot more fluently, by passing a special resolution. papers can not include vittles contrary to the memorandum. papers are attachment to both the Companies Act and the Memorandum. Acts done beyond the Articles can be ratified by the shareholders as long as the act isn’t beyond the memorandum. Que5.9. What do you understand by the term prospectus? Mention the contents of prospectus. What are the types of prospectus? Answer 1. Prospectus means any document described or issued as a prospectus and includes a red herring prospectus or shelf prospectus or any notice, indirect, announcement or other document inviting offers from the public for the subscription or purchase of any securities of a body commercial. 2. In simple words, any document inviting offers from the public, for the subscription of shares or debentures is known as prospectus. 3. A prospectus must be in jotting. An oral assignation to subscribe isn’t a prospectus. 4. A document isn’t a prospectus unless it’s an assignation to the public. 5. For any document to consider as a prospectus, it should satisfy ensuing conditions i. The document should invite the subscription to public share or debentures, or it should invite deposits. ii. Such an assignation should be made to the public. iii. The assignation should be made by the company or on the behalf company. iv. The assignation should relate to shares, debentures or similar other instruments. Contents of Prospectus Every prospectus issued by or on behalf of the company shall be dated and inked and shall 1. Include following Informationi. Names and addresses of listed office of the company, CS, CFO, adjudicators, bankers, trustees backers as may be specified; ii. Dates of the opening and ending of the issue and protestation of issue of allotment letters and refunds within specified time; iii. A statement by the Board of Directors about separate bank account to manage all moneybags entered out of issue; iv. concurrence of all persons whose addresses are so mentioned;v. Authority to issue; vi. Capital structure of the company; vii. Object of offer; viii. Object of present business of the company; ix. minimal subscription;x. Details of Directors; xi. exposures. 2. Include following Reportsi. Reports by the adjudicators about its fiscal performance; ii. Reports about profit and losses for each of the five fiscal times incontinently antedating the fiscal time of the issue of the prospectus; iii. Reports about the business or deals. 3. Make a protestation about the compliance of the vittles of the Companies Act and a statement to that effect. 4. State similar other matter and reports as may be specified. Types of prospectus There are four types of prospectus, which are as under 1. Abbreviated Prospectus i. The abridged prospectus is a summary of a prospectus filed before the register. ii. It contains all the features of a prospectus. iii. An abridged prospectus contains all the useful and materialistic information so that the investor can take a rational decision. iv. It also reduces the cost of public issue of the capital as it’s a short form of a prospectus. 2. Deemed Prospectus i. When any company allots or agrees to lot securities for trade to the public the document will be considered as a supposed prospectus through which the offer is made to the public for trade. ii. The document is supposed to be a prospectus of a company for all purposes and all the provision of content and arrears of a prospectus will be applied upon it. 3. Shelf Prospectusi. Shelf prospectus can be defined as a prospectus that has been issued by any public fiscal institution, company or bank for one or further issues of securities or class of securities as mentioned in the prospectus. ii. When a shelf prospectus is issued also the issuer doesn’t need to issue a separate prospectus for each immolation he can offer or vend securities without issuing any farther prospectus. 4. Red herring prospectusi. Red herring prospectus is the prospectus which lacks the complete particulars about the amount of the price of the securities. ii. therefore red herring prospectus is an deficient prospectus. iii. A company may issue a red herring prospectus previous to the issue of prospectus. iv. This type of prospectus needs to be filed with the register at least three days prior to the opening of the subscription list or the offer.
