Incorporation as company

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

05 November 2013 My query is ...

if any unincorporated association naming say ABC association carry on business,Now that association wants to convert itself to company from association/ registered itself as company .
so after registration,association becomes company or company and association is seperate from each other ? In short now they (ABC association)called association or a company ?

Querist : Anonymous

Querist : Anonymous (Querist)

26 November 2013 My query is ...
if any unincorporated association naming say ABC association carry on
business,Now that association wants to convert itself to company from
association/ registered itself as company .
so after registration,association becomes company or company and association
is seperate from each other ? In short now they (ABC association)called
association or a company ?

Aashok Kumar Sharma

Aashok Kumar Sharma (Expert)
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31 July 2024 When an unincorporated association decides to convert itself into a company, it essentially transitions from being an informal group to a legally recognized entity. The process and its implications are as follows:

### Conversion and Legal Status

1. **Conversion Process**:
- The unincorporated association needs to follow the legal process of incorporation under the Companies Act, 2013 (or applicable laws in other jurisdictions).
- This involves preparing necessary documents, including the Memorandum of Association (MoA) and Articles of Association (AoA), and filing them with the Registrar of Companies (RoC).

2. **Separate Legal Entity**:
- Once registered, the association ceases to exist as an unincorporated entity and becomes a company.
- The company becomes a separate legal entity, distinct from its members.
- The assets and liabilities of the association typically transfer to the new company.

3. **Post-Registration**:
- The newly incorporated entity will be recognized and referred to as a company (e.g., ABC Association Pvt. Ltd. or ABC Association Ltd., depending on the type of company).
- The association no longer exists in its previous form. All activities, contracts, and obligations are now carried out in the name of the company.

### Steps for Conversion

1. **Resolution**:
- The members of the association should pass a resolution agreeing to convert the association into a company.

2. **Drafting Documents**:
- Prepare the MoA and AoA for the new company.
- Gather other necessary documents like proof of identity and address of the promoters, and any property transfer documents if applicable.

3. **Filing with RoC**:
- Submit the incorporation documents to the RoC, including the resolution passed by the association, MoA, AoA, and other required documents.
- Pay the necessary fees.

4. **Certificate of Incorporation**:
- Upon approval, the RoC will issue a Certificate of Incorporation, signifying the birth of the new company.

### Implications

- **Name and Branding**: The name will include a suffix indicating its corporate status (e.g., Pvt. Ltd. or Ltd.), and the branding will reflect its new corporate identity.
- **Legal Obligations**: The company will have to comply with corporate laws, including holding regular meetings, maintaining statutory registers, filing annual returns, and other compliance requirements.
- **Contracts and Assets**: Any contracts or assets previously held in the name of the association will be transferred to the new company, subject to appropriate legal documentation.

In summary, after the conversion, the unincorporated association no longer exists separately; the new company takes over all its functions, assets, and liabilities. The entity will henceforth be referred to as a company.

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