Whether a huf can be member in incorporation of company
This query is : Resolved
09 January 2013
Dear All as HUF can be shareholder in a company through its Karta.
1) Now we have to incorporate a new company, can a HUF be subscriber to the Memorandum.
2) In Subscriber detail how to enter HUF as Subscriber, Procedure for entering HUF as Karta.
3) Special thinks to remember for drafting of memorandum
1) Now we have to incorporate a new company, can a HUF be subscriber to the Memorandum.
2) In Subscriber detail how to enter HUF as Subscriber, Procedure for entering HUF as Karta.
3) Special thinks to remember for drafting of memorandum
09 January 2013
Hi
Hindu undivided family is represented by its Karta. The Companies Act does not prohibit membership of Hindu Undivided Family. In case of HUF, the shares can be registered in the name of 'A' as Karta of HUF
Hindu undivided family is represented by its Karta. The Companies Act does not prohibit membership of Hindu Undivided Family. In case of HUF, the shares can be registered in the name of 'A' as Karta of HUF
09 January 2013
Department's circular of subscription through Attorney or Agent
The Department has issued a Circular No. 8/15/8, dated 1-9-1958 that an agent may sign the Memorandum on behalf of a subscriber, if he is authorised to do so by a power of attorney. Department Circular No. 1/95, dated 16th February 1995 states that only one power of attorney on usual stamp paper from all subscriber or directors is enough. The Registrar of Companies should not insist upon any authorisation from the Board of directors for appointing a power of attorney. Such type of authorisation are commonly used in three types of situations:—
(1) Corporate Subscriber: A company being an artificial and legal person may be a subscriber to the Memorandum and Articles of Association. In order to subscribe for the Memorandum and Articles of Association, the Board of directors of the company shall by resolution under section 292(1)(d) authorise a person as its attorney to sign the various documents for and on behalf of the company. The Board shall also authorise for execution of a Power of Attorney in favour of the said person. Since it is required for every subscriber having a share capital to take at least one share, therefore it should be mentioned in the resolution of the Board that how many shares the company proposes to take. Provisions of section 372A shall also be considered.
(2) Where any of the subscribers is not available: In such a situation, he may constitute an attorney and authorise any person capable of entering into contract, to sign the documents on his/her behalf. The said Power of Attorney is required to be executed on non-judicial stamp paper of such value as per the Stamp Rules, applicable in the State where the registration of the company shall take place.
(3) Subscription by illiterate person: An illiterate person subscribing the Memorandum can also authorise an agent to write for him and sign the Memorandum and Articles on his behalf through a power of attorney. Alternatively, he can put his left hand thumb impression on the column for signature and his name, address and occupation and the number of shares agreed to be taken by him be written by the person writing for him. The latter person should read and explain the contents of the documents to the illiterate person and make an endorsement to that effect on the document at the appropriate place.
HUF is not a person to be a subscriber, however, it can be represented by it's Karta. In the case of HUF, the shares may be registered in the name of Karta of HUF.
The Department has issued a Circular No. 8/15/8, dated 1-9-1958 that an agent may sign the Memorandum on behalf of a subscriber, if he is authorised to do so by a power of attorney. Department Circular No. 1/95, dated 16th February 1995 states that only one power of attorney on usual stamp paper from all subscriber or directors is enough. The Registrar of Companies should not insist upon any authorisation from the Board of directors for appointing a power of attorney. Such type of authorisation are commonly used in three types of situations:—
(1) Corporate Subscriber: A company being an artificial and legal person may be a subscriber to the Memorandum and Articles of Association. In order to subscribe for the Memorandum and Articles of Association, the Board of directors of the company shall by resolution under section 292(1)(d) authorise a person as its attorney to sign the various documents for and on behalf of the company. The Board shall also authorise for execution of a Power of Attorney in favour of the said person. Since it is required for every subscriber having a share capital to take at least one share, therefore it should be mentioned in the resolution of the Board that how many shares the company proposes to take. Provisions of section 372A shall also be considered.
(2) Where any of the subscribers is not available: In such a situation, he may constitute an attorney and authorise any person capable of entering into contract, to sign the documents on his/her behalf. The said Power of Attorney is required to be executed on non-judicial stamp paper of such value as per the Stamp Rules, applicable in the State where the registration of the company shall take place.
(3) Subscription by illiterate person: An illiterate person subscribing the Memorandum can also authorise an agent to write for him and sign the Memorandum and Articles on his behalf through a power of attorney. Alternatively, he can put his left hand thumb impression on the column for signature and his name, address and occupation and the number of shares agreed to be taken by him be written by the person writing for him. The latter person should read and explain the contents of the documents to the illiterate person and make an endorsement to that effect on the document at the appropriate place.
HUF is not a person to be a subscriber, however, it can be represented by it's Karta. In the case of HUF, the shares may be registered in the name of Karta of HUF.
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09 January 2013
Important points which must be considered while drafting Association clause of Memorandum:
(1) According to section 12, there should be at least two persons subscribing to Memorandum of Association in case of private company and seven in case of public company.
(2) The names of subscribers to Memorandum of Association must tally with the names of promoters as given in application for availability of name. (See the Circular No. 1/90, dated 5-1-1990).
(3) In case one or more of the promoters, whose name have been included in application for availability of name, are no more interested in incorporation of the Company, no-objection letter from such promoter should be obtained and made available to MCA/ROC at the time of registration of the company.
(4) The Registrars have also been told that in case if there is any change in the names of the subscribers from what was given in e-Form 1A for availability of name, the changed subscribers should be asked to make a fresh application for availability of names. However, the names in instances of the above nature will be valid for six months, the MCA/Registrar will have no objection to allow the said name in response to the fresh application if the name is not utilised for six months in terms of the original application.
(1) According to section 12, there should be at least two persons subscribing to Memorandum of Association in case of private company and seven in case of public company.
(2) The names of subscribers to Memorandum of Association must tally with the names of promoters as given in application for availability of name. (See the Circular No. 1/90, dated 5-1-1990).
(3) In case one or more of the promoters, whose name have been included in application for availability of name, are no more interested in incorporation of the Company, no-objection letter from such promoter should be obtained and made available to MCA/ROC at the time of registration of the company.
(4) The Registrars have also been told that in case if there is any change in the names of the subscribers from what was given in e-Form 1A for availability of name, the changed subscribers should be asked to make a fresh application for availability of names. However, the names in instances of the above nature will be valid for six months, the MCA/Registrar will have no objection to allow the said name in response to the fresh application if the name is not utilised for six months in terms of the original application.
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09 January 2013
Name, address, description and occupation of each subscriber:
Subscribers shall sign and write in the Memorandum and Articles of Association his/her own hand, his/her name, father's/husband's name, address, age and occupation, if any, and shall also write against his name the number of shares he/she proposes to subscribe. Subscribers can be either literate or illiterate, either man or woman, either resident or non-resident, either Indian national or foreign nationals. In any case they must be competent to enter into an agreement.
Dr. J.J. Irani Committee has proposed in its Report that the promoters and directors should also disclose information that establishes/authenticates their proof of residence and identity through supporting documents such as Photographs, PAN Number, Passport, affidavits etc. that may be prescribed.
The subscription to a memorandum of association means not merely signing at every one of its pages but signing their names in token of entering into an agreement both as to signatories forming themselves into a company but also their undertaking to take number of shares indicated against their names. [Arthanari Transports (P) Ltd. v K.P. Swami Gounder (1965) 35 Comp Cas 930 (Mad)].
The signatures of the subscribers must be authenticated by a witness who is not a subscriber himself. He shall likewise add his name, father's name, address, age and occupation, if he is a member of the professional body, membership number with shall also be written if any. If attestation of Memorandum of Association which has been registered turns out to be irregular, it does not render the same void [Chotalal v Dal Sukram (1892) ILR 17 Bom 472].
Subscribers shall sign and write in the Memorandum and Articles of Association his/her own hand, his/her name, father's/husband's name, address, age and occupation, if any, and shall also write against his name the number of shares he/she proposes to subscribe. Subscribers can be either literate or illiterate, either man or woman, either resident or non-resident, either Indian national or foreign nationals. In any case they must be competent to enter into an agreement.
Dr. J.J. Irani Committee has proposed in its Report that the promoters and directors should also disclose information that establishes/authenticates their proof of residence and identity through supporting documents such as Photographs, PAN Number, Passport, affidavits etc. that may be prescribed.
The subscription to a memorandum of association means not merely signing at every one of its pages but signing their names in token of entering into an agreement both as to signatories forming themselves into a company but also their undertaking to take number of shares indicated against their names. [Arthanari Transports (P) Ltd. v K.P. Swami Gounder (1965) 35 Comp Cas 930 (Mad)].
The signatures of the subscribers must be authenticated by a witness who is not a subscriber himself. He shall likewise add his name, father's name, address, age and occupation, if he is a member of the professional body, membership number with shall also be written if any. If attestation of Memorandum of Association which has been registered turns out to be irregular, it does not render the same void [Chotalal v Dal Sukram (1892) ILR 17 Bom 472].
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10 January 2013
Thanks a lot sir
10 January 2013
My pleasure............
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