Formation of company:

Incorporation of company and matters incidental thereto:

A company may be formed for any lawful purpose by –

  • Seven or more persons, where the company to be formed is to be a public company; (formation of public company)
  • Two or more persons, where the company to be formed is to be a private company; (formation of private company) or
  • One person, where the company to be formed is to be one person company that is to say, a private company,

Subscribing the names to a memorandum and complying with the requirements of this act in respect of registration:


In the memorandum of one person company can indicate the name of other person with his prior written consent in the prescribed form. This can be possible in the event of the subscriber’s death or his incapacity to contract become the member of the company and the written consent of such person can also be filed with the registrar at the time of incorporation of the OPC along with the memorandum and articles:

Further, such person can withdraw his consent in such a manner as may be prescribed:

Provided also that the member of one Person Company may at any time changes the name of such other person by giving notice in such manner as may be prescribed:

It is the duty of the member of one Person Company to intimate the company the change,

It shall be the duty of the one person company to intimate the company about the change, if any in the name of other person nominated by him indicating in the memorandum or within particular time period or manner as prescribed. The company needs to intimate such change to the registrar and within such manner and such time as prescribed:

If any change in the name of the person would not be deemed to be alteration of the memorandum

A company formed under sub-section (1) may be either-

  • A company limited by shares; or
  • A company limited by guarantee; or
  • An unlimited company.


The memorandum of a company shall state:

  • In case of private limited company, it is indeed to add the “private limited” at the end of the company name and in case of public limited company, the word “limited” need to be added at the end of the company.
  • Provided that nothing in this clause shall apply to a company registered under section 8;
  • The state in which the registered office of the company is to be situated;
  • The objects for which the company is proposed to be incorporated and any matter considered necessary in furtherance thereof;
  • The liability of members of the company, whether limited or unlimited, and also state,
    • The company which is limited by shares, the liability of the members is limited to the amount unpaid, if any, on the shares held by them and
    • The company limited by guarantee, the amount up to which each member undertakes to contribute:-
  • The assets of the company in case of being wound up while he is a member or after he ceases to be a member within a time period, for the payment of debts and liabilities that may have been contracted before he ceases to be e a member, as the case may be; and
  • To the charges, expenses and charges of winding up and for the adjustment of the rights of the contributories among themselves;
  • In the case of a company having a share capital,
    • Share capital amount with which the company is to be registered and the division thereof into shares of a fixed amount and the no of shares which the subscribers to the memorandum agree to subscribe which should not be less than one share; and
    • The number of shares of each subscribers to the memorandum intends to take, indicate opposite his name;
  • In case of OPC, the name of the person who is in the event of death of the subscriber may become the member of the company.

The name which have been stated in the memorandum shall not

  • Be resembles too nearly to the name of the existing one which is registered or identical under the prescribed act or any previous laws;
  • Be such that its use by the company
    • Shall constitute an offence under any law for the time being in force or
    • It is undesirable in the opinion of the central government.

Without prejudice to the provisions of sub-section (2), a company shall not be registered with a name which contains:

  • Any expression or word which is likely to give the impression that the company is in way connected with or having the patronage, the state government, central government or any local authority, corporation or body constituted by the state or central government under any law for the time being in force; or
  • Such word or expression as may be prescribed,

Unless the previous approval from the central government has been obtained for the use of any such expression or word.

A person can make an application in any form and manner and accompanied by such fee as prescribed, to the registrar for the reservation of name set out in the application as:

  • Name of the proposed company; or
  • The name to which the company proposes to change its name.

As under the sub-section (4), with the receipt of an application, the registrar may on the basis of information and documents furnished along with the application, reserve the name for a time period of sixty days from the date of the application.

After the reservation of name under clause (i), it is found that the name was applied by furnishing the incorrect or wrong information then

  • The reserved name shall be cancelled and the person making application under sub-section (4) would be liable to penalty which may extend up to one lakh rupees if the company has not been incorporated;
  • The registrar may after giving the company, an opportunity of being heard if the company has been incorporated
    • After passing an ordinary resolution, either direct the company in order to change its name within a period of 3 months.
    • Action will be taken to strike off the name of the company from the register of companies; or
    • Petition will be made for winding up of the company.

Any provision in the articles or memorandum in the case of a company which is limited by guarantee and doesn’t need a share capital, giving any person a right to participate in the profits of the company falsely otherwise as a member, shall be void.


The articles of a company shall contain the regulations for management of the company.

The articles may contain provisions for entrenchment to the effect which specified the provisions of the articles that may be altered only if procedures or conditions as that are more restrictive than those applicable in the case of a special resolution which are met or complied with.

The provisions for entrenchment which are referred in sub-section (3) shall only be made either on the formation of the company or by amendment in the article agreed to by all the members of the company in the case of Pvt Company and by a special resolution in case of public company.

The article which contains provisions for entrenchment, whether made on formation or amendment, the company gives the notice to the registrar of such provisions in such a manner as may be prescribed.

A company can adopt all the regulations or certain regulations which are contained in the model articles applicable to the company.

If a company which is registered after the commencement, so far, those companies registered articles of the company would not modify or exclude the regulations contained in the model articles which are applicable to such company, those registration will, so far as applicable, be the regulation of that company in a same manner to the extent as if they had contained in the duly registered articles of the company.

Nothing in this section shall apply to the articles of a company which are registered under the previous company laws unless amended in this act and rules.

Act to override memorandum, articles, etc.

Save as otherwise expressly provided in this act

  • The provisions of this act may have effect notwithstanding anything to the contrary contained in the articles or memorandum of a company, or in any agreement executed by it or in any resolution been passed by the company in general meeting or by its board of directors, whether the same be executed, registered or passed, as the case may be, before and after the commencement of this act; and
  • The provisions which are contained in the articles, agreement, memorandum, and resolution shall to the extent to which it has repugnant to the provisions of this act, becomes or void, as the case may be.

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