Incorporation stage(formation of a joint stock company part 2)

Incorporation stage

Incorporation of a company is the second stage in the formation of a company. Incorporation refers to the registration of the company under Companies Act. 1956.

The main steps under the incorporation stage:

Ø Filing of necessary documents

Once the registrar approves of the name, the following documents have to be submitted with the registrar:

                                 i.            Memorandum of Association

                               ii.            Articles of Association

                              iii.            Statement of Authorized Capital

                             iv.            A list of directors with their names, addresses, occupation and age

                               v.            The written consent of the directors to act as directors

                             vi.            Notice of the address of the registered office of the company

                            vii.            A statutory declaration stating that all the formalities related to the formation of the company are duly completed.

Ø Payment of fees

Along with filling of the above documents the prescribed fees of registration also have to be deposited. The amount of registration fees depends on the amount of authorized capital.

Ø Registration

The registrar verifies all the documents submitted and he also checks the receipt of fees deposited. If he is satisfied with the validity and authenticity of the documents submitted then the registrar enters the name of the company in his register.

Ø Certificate of incorporation

After entering the name of the company in the register, the registrar issues a certificate of incorporation. From this date onwards the company is considered as a separate legal entity.

Specimen of certificate of Incorporation I hereby certify that ……………………. (Name of the company) is this day incorporated under the companies Act 1956, and that the company is limited given under my hand at Delhi, this twenty-fourth day of August, two thousand and twelve. Fees: Deed Stamp                                                                      ₨…………… Stamp duty on capital                                                               ₨…………… SEAL                                                                                 Registrar of Companies                                                                                           Delhi Corporate identity Number 1930 of 2015.

Effect of the certificate of incorporation

A company is legally born on the date printed on the certificate of incorporation. It is considered as a separate legal entity with perpetual succession only from this date. The certificate of incorporation is the conclusive evidence of the legal existence of the company. Whatever may be the deficiency in the formalities, once the certificate is issued it is conclusive evidence that company came to existence on the date mentioned of incorporation.

Following points will make it more clear:

1.       The certificate of incorporation was issued on 24^th august whereas on the certificate date was written as 22^nd august. The company is considered to born on 22^nd august only and so all dealings carried on 23^rd august will be considered legal although the certificate was issued only on 24^th august.

2.       After issue of registration certificate, it was found that a person had forged signature on the memorandum but then also the incorporation will be considered valid.