...

Next

Persons desirous of forming a company must adhere to the step by step procedure as discussed below:-

1. Selection of type of the company.

2. Selection of name for the proposed company.

3. Apply for Directors Identification Number and Digital Signatures.

4. Drafting of Memorandum and Articles of Association.

5. Stamping, digitally signing and e-filing of various documents with the Registrar.

6. Payment of Fees.

7. Obtaining Certificate of Incorporation.

8. Preparation and filing of Prospectus/Statement in lieu of Prospectus and e-Form 19/20 (in case of public companies) for obtaining the
certificate of commencement of business.

9. Obtaining Certificate of Commencement of business (in case of public limited companies).

1. Selection of the type of company

The Promoters of a company may be individual entrepreneurs or body corporate engaged in efforts to incorporate a company. They have the power of
defining the object of the company and deciding various matters for the company proposed to be incorporated. It is depending upon, the purposes for
which the company is to be incorporated, proposed scale of operations, capital involved, etc. The promoters can select type of the company as they
wish to form themselves into viz. private company, public company, non-profit making company, etc.

2. Selection of name

Six names are required to be selected in order of preference after taking notes of numerous provisions, clarifications, circulars and rules made by the
Ministry of Corporate Affairs, etc. In case key word is required, significance of each key word should be given in the e-Form 1A.

2.1 Applying for ascertaining the availability of the selected name

The promoters are required to make an application to the concerned Registrar of Companies to be submitted electronically to the Ministry of
Corporate Affairs on the portal of MCA. An application shall be in e-Form 1A as prescribed by Notification No. GSR 56(E) dated 10th Feb., 2006
duly digitally signed by any one promoter or managing director or director or manager or secretary of the company along with the required fee for
ascertaining whether the selected name is available for adoption by the promoters of the proposed company.

2.2 Approval of the name

After receipt of completed application in e-Form 1A, the Registrar shall intimate whether the proposed name is available for adoption or not. The
confirmation of the name made available by the Registrar shall be valid for a period of six months.In case, if the promoters fail to submit all the
required documents for incorporation within that period, then they are required to submit another application after payment of requisite fees.

3. Requirement for having DIN

As per proviso to section 253 of the Companies Act, 1956, inserted by the Companies (Amendment) Act, 2006, w.e.f. 1-11-2006, no company shall
appoint or re-appoint any individual as director of the company unless he has been allotted a Director Identification Number under section 266B.

New section 266A has been inserted by the Companies (Amendment) Act, 2006 which provides that every individual, intending to be appointed as
director of a company shall make an application for allotment of Director Identification Number (DIN) to the Central Government in the prescribed DIN
Form. Therefore, before submission of e-Form 1A all the directors of the proposed company must ensure that they are having DIN and if they are not
having DIN, it should be first obtained.

Specific care should be taken that a person cannot have more than one DIN, therefore, a DIN once obtained shall serve the requirement for all the
companies in which he is a director or intended to be a director.

3.1 Requirement for having digital signatures

After 16th Sept., 2006, every documents prescribed under the Companies Act, 1956 is required to be filed with the digital signature of the managing
director or director or manager or secretary of the Company, therefore, it is compulsorily required to obtain digital signatures of at least one director
to sign the e-Form 1A and other documents. It may be noted that if the director or other persons covered are having digital signatures, their
signatures may be used for the above said purpose and there is no need take new signature again.
4. Preparation of the Memorandum of Association (MOA) and Articles of Association (AOA)

Drafting of the MOA and AOA is generally a step subsequent to the availability of name made by the Registrar. It should be noted that the main objects
should match with the objects shown in e-Form. These two documents are basically the charter and internal rules and regulations of the companies.
Therefore, they must be drafted with utmost care with the experts advise and the other object clause should be drafted in a very broader sense.

5. Filing of documents with the Registrar

Next step for the promoters is to file the following documents with the Registrar for incorporation of the company. The following documents shall be
submitted to the Registrar alongwith the adequate filing fees as applicable for registration of the company online with in a period of six months from the
date of intimation of availability of name:-

1. Memorandum of Association, duly signed by the subscribers and witnessed, showing the number of shares against their names electronically
attached in PDF file. It should also be properly stamped as per the stamp duty applicable in the State, where the registered office of the
company is to be situated.Simultaneously original stamped copy of the Memorandum of Association shall be submitted with the Registrar of
Companies concerned.

2. Articles of Association should be duly signed by the subscribers and witnessed, showing the number of shares against their names
electronically. It should be properly stamped according to the authorized share capital as per the stamp duty applicable in the state, where the
registered office of the company to be situated. Simultaneously original stamped copy of the Memorandum of Association shall be submitted
with the Registrar of Companies concerned.

3. Copy of the agreement, if any, which the company proposes to, enter in to with any individual for appointment as its managing or whole-time
director or manager shall be attached in the PDF file.

4. Declaration in e-Form 1 by an advocate or company secretary or chartered accountant engaged in whole time practice in India or by a person
named in the Articles as a director, manager or secretary of the company, that all the requirements of the Companies Act, 1956 and the rules
made thereunder have been complied with in respect of registration and matters precedent and incidental thereto, which may be accepted by
the Registrar as sufficient evidence of such compliance. It should be carefully noted that details of all the companies in which directors are
also director should be given and the names, addresses and other particulars of directors and promoters should be matched with the
information provided in the DIN application Form. [ Section 33(2)] (Appendix 2).

5. Power of Attorney for should be furnished by all the subscribers in favour of any one subscriber or any other person authorising him to file
these documents and to with the Registrar and to obtain certificate of incorporation. The power of attorney should be given on Non-Judicial
stamp paper of appropriate value and shall be submitted to the Registrar. (Appendix 3).

6. Other agreement if any, which has been stated in the Memorandum or Articles of Association shall also be filed in the PDF file with the
Registrar because in such cases the agreement will form part of this basic document.

7. E-Form 18 is to be filed with the Registrar electronically with the digital signatures in regard to location of the registered office. E-Form 18 shall
also be certified by the company secretary or chartered accountant or cost accountant in whole –time practice. [ Section 146 (2)] (Appendix 4)

8. E-Form 32 is required to be filed with the Registrar electronically for filing particulars of directors. The personal details should match with the
information provided in the DIN. Following additional details are also required to given in e-Form 32:

(a) Name and CIN of all the companies in which they are directors;
(b) Names of partnership concerns in which they are partner;
(c) Names of proprietorship concerns in which they are proprietor;

In case if the field provided in the e-From 32 is not sufficient, an annexure may also be enclosed for the required details. As an e- Form 32
provides fields for three directors only, e-Form 32AD i.e. Addendum to e-Form 32 shall be submitted for additional appointments. E-Form 32
AD, if any is also required to be certified by the company secretary or chartered accountant or cost accountant in practice digitally before filing
with the Registrar. Consent to act as director on plain paper and authorization to submit e-Form 32 from all the director should be attached
with the e-Form 32.

E-form 32 is required to be digitally signed by the director or managing director or manager or secretary of the company. E-Form 32 shall be
filed along with the adequate filing fee as prescribed under Schedule XIII of the Companies Act, 1956, However, no separate filing fee is
required to be paid on the addendum of e-Form 32.( Appendix 5).

6. Payment of registration fees for a new company

The fees payable to the Registrar at the time of registration of a new company varies according to the authorized capital of a company proposed to be
registered as per Schedule X to the Act. Fees can be calculated by the MCA portal.

7. Certificate of Incorporation (section 33 and 34)

On the satisfaction of the Registrar that the requirements specified in sections 33(1) and 33(2) have been complied with by the company, he shall
retain the documents and register the MOA, AOA and other documents. Section 34(1) cast an obligation on the Registrar to issue a Certificate of
Incorporation, normally within 7 days of the receipt of documents.

8. Commencement of Business

A Private limited company and a company not having share capital may commence its business activities from the date of its incorporation. However, a
public Limited Company having share capital is required to take certificate of commencement of business before it can commence business.

Winding up of Company

Section 425 of the Companies Act, 1956, deals with the winding up of companies. Winding up of company is a legal procedure to dissolve
the company and put an end to its life. The company ceases to be a �going concern�. The term winding up is defined as, �the process by
which the life of a company is ended and its property is administered for the benefit of its members and creditors.� During the process of
winding up, the assets of the company are sold and all the debts of the company are paid off. An administrator, called the liquidator, is
appointed to take control of the winding up process of the company. If any surplus is left, the liquidator would distribute it among the owners
of the company in accordance to their rights. In case the assets are insufficient, the owners may have to compensate if the agreement so
specifies.

Any company does its business under the regulations set by the Act. It needs to follow the provisions of the act and work in accordance to
the memorandum and articles set to govern the company�s activities. It has to consider the interests of its owners, creditors as well as the
public. If the company trespasses any of the provisions of the act, it may lead to winding up of the company. A company may have to face
winding up proceedings on many accounts. The company could be wound-up either by a tribunal (through court) or voluntarily by the
members of the company.

A sick or potentially sick company can file a petition for voluntary winding up of company. The company must seek clearance for closure from
the government. A company referred to the Board of Financial and Industrial Reconstruction can be wound-up after the order is passed by
the board. Once the amount of settlement (assets minus liabilities) is determined, the permission of RBI is taken to make the final settlement
to the owners of the company.

Compulsory winding up of a company may arise owing to many issues. Winding up application can be filed against the company on the
grounds of unlawful activities, or inability to pay the debts, or reports are not filed as provided or not followed memorandum and articles etc.
It is greatly affected by the circumstances and facts of the case. However, in the view of public, winding up of company is seen as the
company being financially not good. So, the company must try to avoid the situations which lead to a wrong impression on the minds of the
public.

After the entire affair is completed, the company is dissolved and its name is removed from the register of companies. The company�s legal
personality comes to an end and it ceases to exist. As per Section 425 of the Act, the modes of winding up are:

1. Winding up by the court.

2. Voluntary winding up,
i. Members� Voluntary winding up.
ii. Creditors� Voluntary winding up.
3. Winding up subject to supervision of the court.
The Doctrine of Indoor Management says that if a person enters into a contract with a Company he has the rights to inquire into the
correctness of the contract since Article and Memorandum of Association are public documents. It is invoked by the person

Doctrine of Constructive notice is invoked by the company against a person who has failed to inquire internal regulations.

Read
more: http://wiki.answers.com/Q/Distinguish_between_doctrine_of_indoor_management_and_doctrine_of_constructive_notice.clar
Distinction Between A Public Company And a Private Company – Following
ify_with_case_laws#ixz
are the main points of difference between a Public Company and a Private Company :-
1. Minimum Paid-up Capital : A company to be Incorporated as a Private Company must have a minimum paid-up capital of Rs. 1,00,000,
whereas a Public Company must have a minimum paid-up capital of Rs. 5,00,000.
2. Minimum number of members : Minimum number of members required to form a private company is 2, whereas a Public Company
requires atleast 7 members.
3. Maximum number of members : Maximum number of members in a Private Company is restricted to 50, there is no restriction of
maximum number of members in a Public Company.
4. Transerferability of shares : There is complete restriction on the transferability of the shares of a Private Company through its Articles of
Association , whereas there is no restriction on the transferability of the shares of a Public company
5 .Issue of Prospectus : A Private Company is prohibited from inviting the public for subscription of its shares, i.e. a Private Company cannot
issue Prospectus, whereas a Public Company is free to invite public for subscription i.e., a Public Company can issue a Prospectus.
6. Number of Directors : A Private Company may have 2 directors to manage the affairs of the company, whereas a Public Company must
have atleast 3 directors.
7. Consent of the directors : There is no need to give the consent by the directors of a Private Company, whereas the Directors of a Public
Company must have file with the Registrar a consent to act as Director of the company.
8. Qualification shares : The Directors of a Private Company need not sign an undertaking to acquire the qualification shares, whereas the
Directors of a Public Company are required to sign an undertaking to acquire the qualification shares of the public Company .

9. Commencement of Business : A Private Company can commence its business immediately after its incorporation, whereas a Private
Company cannot start its business until a Certificate to commencement of business is issued to it.
10. Shares Warrants : A Private Company cannot issue Share Warrants against its fully paid shares, Whereas a Private Company can issue
Share Warrants against its fully paid up shares.
11. Further issue of shares : A Private Company need not offer the further issue of shares to its existing share – holders, whereas a Public
Company has to offer the further issue of shares to its existing share – holders as right shares. Further issue of shares can only be offer to
the general public with the approval of the existing share – holders in the general meeting of the share – holders only.
12. Statutory meeting : A Private Company has no obligation to call the Statutory Meeting of the member, whereas of Public Company must
call its statutory Meeting and file Statutory Report with the Register of Companies.
13. Quorum : The quorum in the case of a Private Company is TWO members present personally, whereas in the case of a Public Company
FIVE members must be present personally to constitute quorum. However, the Articles of Association may provide and number of members
more than the required under the Act.
14. Managerial remuneration : Total managerial remuneration in the case of a Public Company cannot exceed 11% of the net profits, and in
case of inadequate profits a maximum of Rs. 87,500 can be paid. Whereas these restrictions do not apply on a Private Company.
15. Special privileges : A Private Company enjoys some special privileges, which are not available to a Public Company.
z1EkuUgBB1) MoA:

It is along with the application of starting of a company.

I think it confines & defines the objective of a company.

MoA is also called Charter of a Company.

The main aim of MoA is to let the investors know where their money is invested.

It has 2 objectives; Main Objective & Subsidiary Objectives.

MoA has 6 clauses:

@ The Name Clause

@ The Registered Office Clause
@ The Object Clause
@ The capital Clause
@ The Liability Clause
@ The Association Clause.

2) AoA:

It is internal management of the company.

It shows what type of power / responsibilities / authority the investors have..

Its by laws that governs management of internal affairs defines duties / rights / powers / number of directors of the company.

It also show that what is mode & form in which business is to be carried out subordinating to MoA & can not supersede object set
by MoA.

Read
more: http://wiki.answers.com/Q/Differences_between_articles_of_association_and_memorandum_of_association#ixzz1EkvwGeAv
G

SHARES- 1.share holder is the real owner of the company.share holder have not fixed dividend rate.share holder have not maturity
period.share are not redeemed.shares are more volatile.share holder have high risk.share holder have high return.share holder
have right on residial income.share face value is Rs 10/each.
DEBENTURE-1.debenture holder is the creditor of a company.they have fixed rate of interest.they have a maturity period.they dont
have right to vote.debentures are redeemed.they are not volatile.they have no risk.they have low return.debenture face value is
Rs-100/each

The answer is right. But how can we determine the face value of the shares and debentures. Sometimes the interest on the
debenture will be more than the profit on the shares. Please be verified.

Note: There are comments associated with this question. See the discussion page to add to the conversation.

ReCONSUMER PROTECTION ACT 1986 ( “CPA”) IN INDIA

The Consumer Protection Act, 1986 was enacted for better protection of the interests of consumers. The provisions of the Act came
into force with effect from 15-4-87. Consumer Protection Act imposes strict liability on a manufacturer, in case of supply of
defective goods by him, and a service provider, in case of deficiency in rendering of its services. The term “defect” and “deficiency”,
as held in a catena of cases, are to be couched in the widest horizon of there being any kind of fault, imperfection or shortcoming.
Furthermore, the standard, which is required to be maintained, in services or goods is not to be restricted to the statutory mandate
but shall extend to that claimed by the trader, expressly or impliedly, in any manner whatsoever.

The salient features of the Act are:

(I) it covers all the sectors whether private, public, and cooperative or any person. The provisions of the Act are compensatory as
well as preventive and punitive in nature and the Act applies to all goods covered by sale of goods Act and services unless
specifically exempted by the Central Government;

(II) It enshrines the following rights of consumers:

(a) right to be protected against the marketing of goods and services which are hazardous to life and property; (b) right to be
informed about the quality, quantity, potency, purity, standard and price of goods or services so as to protect the consumers
against unfair trade practices; (c) right to be assured, wherever possible, access to a variety of goods and services at competitive
prices; (d) right to be heard and to be assured that consumers’ interests will receive due consideration at the appropriate fora; (e)
right to seek redressal against unfair trade practices or unscrupulous exploitation of consumers; and (f) right to consumer
education;

(III) The Act also envisages establishment of Consumer Protection Councils at the central, state and district levels, whose main
objectives are to promote and protect the rights of consumers; (v) To provide a simple, speedy and inexpensive redressal of
consumer grievances, the Act envisages a three-tier quasi-judicial machinery at the national, state and district levels. These are:
National Consumer Disputes Redressal Commission known as National Commission, State Consumer Disputes Redressal
Commissions known as State Commissions and District Consumer Disputes Redressal Forum known as District Forum; and

(IV) the provisions of this Act are in addition to and not in derogation of the provisions of any other law for the time being in force.
ad more: http://wiki.answers.com/Q/What_are_the_differences_between_share_and_debenture#ixzz1EkwV5L5E