Incorporation of limited company

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Querist : Anonymous

Querist : Anonymous (Querist)

11 September 2013 Hi Friends,

I want to be incorporate a limited company.I read that 3 director and 4 promoter required for incorporation of limited company.

My query :
1. is it compulsory name of 4 promoter mention while filing o f form 1A for approval of name of company?
2. Is it compulsory promoter become shareholder of company after approval of name.?

Ajay Mishra

Ajay Mishra (Expert)
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11 September 2013 Hi

I will suggest you to read instruction Kit of Form-1A, it will help you.

It is not mandatory to mentioned all promoters name in MOA, you can give details of minimum promoters as required by Form-1A.

Now promoters becomes shareholders on incorporation of the company.

Ajay Mishra

Ajay Mishra (Expert)
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11 September 2013

Provisions of section 12(1) of the Companies Act, 1956 are relevant in this situation, which provides that in order to form a public company limited by shares at least seven persons and in case of a private company limited by shares at least two persons have to subscribe their names to Memorandum of Association. Following conditions in that matter shall be ensured by the subscribers:—

(i) No subscriber of the Memorandum of a company having a share capital shall take less than one share, [Section 13(4)(b)] and

(ii) Each subscriber of the Memorandum shall write opposite to his name, the number of shares he takes. [Section 13(4)(c)]

Subscribers can be either literate or illiterate, man or woman, either resident or non-resident, either Indian national or foreign national, etc. A company being an artificial legal person can also be a subscriber.

Even though the signature of a subscriber to memorandum of association of a company is not properly attested, once the memorandum has been registered, such subscriber cannot divest himself of his liability.

A subscriber to memorandum cannot, after issue of certificate of registration, repudiate his subscription on ground that he was induced to sign by misrepresentation of an agent of company. [Metal Constituents Ltd., In re (1902) 1 Ch. 707].

If subscribers to memorandum have any objection to memorandum and articles of association, the time to object is before putting their signatures to it. [East Bengal Sugar Mills Ltd., In re (1941) 11 Comp Cas 169 (Cal)].

In accordance with the provisions of section 36(2) of the Companies Act, 1956, all money payable by any member to the company under the MOA or AOA shall be debt due from him to the company. Further, a subscriber to the memorandum must pay for his shares in cash even if the promoters have promised him the shares for services rendered in connection with the promotion of the company.

Regards

Querist : Anonymous

Querist : Anonymous (Querist)

11 September 2013 thanks for reply, but I am not properly understand your answer.
I want to incorporate public company listed by shares.As per section 12(1) of the company act,1956.at least seven person.

My query .
1. Is is mandatory name of seven person must be mention on Form 1A?

2.is it mandatory seven person become shareholder on incorporation of company .

Ajay Mishra

Ajay Mishra (Expert)
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11 September 2013 Yes it is mandatory to mentioned all seven promoters details in case of public company.

Querist : Anonymous

Querist : Anonymous (Querist)

11 September 2013 One question left

1.Is it mandatory seven promoter become shareholder on incorporation of company