PROMOTION, INCORPORATION &

ADMINISTRATION OF A
COMPANY

PURPOSE- ICSI TRAINING PROJECT REPORT

SUBMITTED BY- ANIRUDDHA S. DESHMUKH

REGISTRATION NUMBER-

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 PREFACE
As per the Company Secretaryship Regulations, 1982, an
Apprenticeship Trainee is required to prepare a Project
Report during his/her training period. The said project
report should be prepared in consultation with the
Company Secretary under whom he/she has trained.
Keeping in view this requirement, I have prepared this
project report in consultation with, Mr. Ram Chandrakant
Thakkar (Practicing Company Secretary) under whom I
have trained. The topic chosen by me has had a significant
impact in the current corporate scenario, especially after
the changing policy of the Government of India which
stresses upon Globalization & Liberalization.
The Project Report has been prepared by me after taking
into consideration all the possible areas which may have an
impact on Promotion, Incorporation & Administration of a
Company, such as the Companies Act, 1956, Companies
Act, 2013. The said project has been prepared after
referring statutory Legislations enacted by the Parliament.

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 CERTIFICATE
This is to certify that, a student of Institute of Company
Secretaries of India, is working as an Apprenticeship
Trainee under me and has successfully completed a
project report titled “Promotion, Incorporation &
Administration of A Company”.

Comment

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 DECLARATION

I hereby declare that the project report titled “Promotion,

Incorporation & Administration of a Company” prepared
by me under the able & inspirational guidance of Mr. Ram
Chandrakant Thakkar, Practicing Company Secretary-
Pune, is in part fulfilment of the Management Training
under the Regulations of “The Institute of Company
Secretaries of India”.

I further declare that this project report has not been

submitted to any other Institute or Organisation.

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 ACKNOWLEDGEMENT

The success of any project depends largely on the

encouragement and guidelines of many people. I take this
opportunity to express my sincere gratitude to the people
who have been instrumental in the successful completion
of this project. First of all, I would like to express my
sincere gratitude to my parents for their blessings, who
have always encouraged me to pursue Company
Secretaryship Course.

I wish to express my deep sense of gratitude to Mr. Ram

Chandrakant Thakkar- Practicing Company Secretary for
his support and help, without his encouragement and
guidance this project would not have materialized.

I sincerely express my thanks and gratitude to all the staff

of Ram Thakkar & Associates – Akola for their kind co-
operation, support and help given to me during period of
training. I thank them for their inspiration and individual
help during Training Period. And most of all I am grateful
to my friends for their encouragement throughout this
project.

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INDEX:-
1. INTRODUCTION………………………………………….……….. 7
2. PROMOTION OF A COMPANY…………………………………… 8
3. COMPANIES ACT 1956 VS 2013………………………………... 10
4. COMPANIES ACT 2013…………………………………………... 10
5. INCORPORATION OF A COMPANY…………………………… 12
6. ONE PERSON COMPANY……………………………………...... 14
7. CONVERSION……………………………………………………. 16
7. SECTION-8 COMPANIES……………………………………….. 17
8.SPICE- SIMPLIFIED PROFORMA FOR
INCORPORATING COMPANY ELECTONICALLY………….….. 19
9. ADMINISTRATION & MANAGEMENT………………….......... 21
10. CONCLUSION………………………………………….............. 36
11. BIBLIOGRAPHY………………………………………….......... 36

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INTRODUCTION:-
In the era of Globalisation and liberalisation
to strengthening economy according to global
scenario; The New Companies Act, 2013
introduces a new form of entity ‘ONE
PERSON COMPANY’ and incorporates
certain new provisions in respect of
memorandum and articles of association. For
instance, the concept of including
entrenchment provisions in the article of
association has been introduced.
The word company imports that an
association of a number of persons is formed
for some common objeect which is more or
less of a permanent character. Such an
association may get registered under the
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Companies Act, 2013 or Indian Trust Act, or
any other law time being in force.
A company when incorporated becomes a
legal person, will be term as artificial person,
it has separate legal entity and which is
separate and distinct from the members of the
company. Those associations of persons not
registered will be an unincorporated company
is not, however, a legal entity separate from its
members.
We are analyzing the key changes and their
implications for stakeholders, by setting out
the practical impact of the changes introduced
by Companies Act 2013 and the allied rules
and regulations amended time to time.
PROMOTION OF A COMPANY:-
INTRODUCTION
Promotion is the first and initial stage in the
process of formation. Its first step involves
dreaming of a business initiative/ opportunity
and taking necessary steps to form a company
so that practical shape can be given to
exploiting the provided business opportunity. It
refers to the process by which a company
comes into existence. It starts with the
conceptualisation of the birth of the company
and determination of the purpose for which it is
to be formed. The people who conceive the
company and invest the initial funds are known
as the promoters of the company. The
promoters enter into preliminary contracts with
vendors and make arrangements for the
preparation, advertisement and the circulation
of prospectus and placement of capital.
However, a person who merely acts in his
professional capacity on behalf of the promoter
(e.g. lawyer, CS, CA etc) for drawing up the
agreement or other documents or prepares the
figures on behalf of the promoter and who is
paid by the promoter is not a promoter.
PROMOTOR:-
(a) who has been named as such in a
prospectus or is identified by the company in
the annual return referred to in section 92; or
(b) who has control over the affairs of the
company, directly or indirectly whether as a
shareholder, director or otherwise; or
(c) in accordance with whose advice,
directions or instructions the
Board of Directors of the company is
accustomed to act:
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Provided that nothing in sub-clause
(c) shall apply to a person who is acting
merely in a professional capacity;
DUTIES OF PROMOTERS TOWARD
THE COMPANY:-
 He must not make any secret profit out of
the promotion of the company: secret
profit is made by entering into a
transaction on his own behalf and then sell
the concerned property to the company at
a profit without making disclosure of the
profit to the company or its members. The
promoter can make profits in his dealings
with the company provided he discloses
these profits to the company and its
members. What is not allowed is making
secret profits i.e. making profits without
disclosing them to the company and its
members.
 He must make full disclosure to the
company of all relevant facts including to
any profit made by him in transaction
with the company.
FUNCTIONS OF PROMOTER:-
 Identification of Business Opportunity:
This is the first and the foremost aspect
necessary. The opportunity may include
any opportunity like producing a new
product or service or making some product
available through different channel and
which has an investment potential. The
technical and economic feasibility is later
examined.
 Feasibility Study: It’s always not feasible
or profitable to setup real projects through
the given opportunity. Hence the promoter
has to take detailed feasibility study to
investigate the business with all respects
which they intend to accomplish. The
promoters are normally advised to seek the
 help of the specialists like engineers,
chartered accountant, company
secretaries, etc. depending on the nature of
the project to see if it can be profitably
exploited.
 Name Approval: After finalising to
launch a company, the promoters have to
decide a name for it and submit an
application to the registrar of the
companies of the concerned state where
the registered office of the company is
situated, for its approval. It may happen
that another company with the same name
or a similar one may exists. This may lead
to misleading the company and hence
another name has to be suggested. Hence,
normally six names are given in the order
we prefer from which the registrar
approves the appropriate one.
 Fixing up Signatories to the MOA:
MOA of the proposed company is signed
by the people who have been decided by
the promoters. The first Directors of the
company are the people who first sign the
memorandum. And it is necessary to get
their written consent to act as Directors of
the company.
 Appointment of Professionals: some
professionals such as mercantile bankers,
auditors, etc., are to be appointed to help
the promoters in the preparation of
necessary documents as required by the
Registrar of Companies. The name,
address and the number of shares allotted
to each shareholder is submitted to the
Registrar.
 Preparation of Necessary Documents:
According to the law the promoters have
to prepare certain legal documents and
submit to the Registrar of the Companies
for getting the company registered like the
MOA, AOA and consent of directors.
POSITION OF PROMOTERS:-
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Promoters carry out different activities to get a
company registered and get it to the position of
start of business. But they aren’t the agents or
the trustees of the company since the company
is not yet been incorporated. Hence, they are
liable in person for all the agreements entered
by them, for the company before its
incorporation, in case the same are not accepted
by the company later on. Promoters of the
company get an important position in the
company, which they are not supposing to
misuse. They can make a profit only if it is
disclosed but shall not make any secret profits.
In the event of a non-disclosure, the company
can withdraw the agreement and claim back the
purchase price paid to the promoters along with
the damages caused due to it.
But the promoters are legally not permitted to
demand the expenses incurred in the promotion
of the company. But the company may
reimburse them with the pre-incorporation
expenditure. The company can also remunerate
the promoters for their work by paying a lump-
sum amount or a commission for the purchase
price of the property purchased through them
or the shares sold. The company sometimes
allots those shares or debentures or gives them
an option to purchase the securities in the
future.
DEFAULT IN DUTIES ON THE PART
OF PROMOTER:-
 The company may rescind or cancel
the contract made and if he has made profit on
any related transaction, that profit also may be
recovered.
 Retain the property paying no more for
it than what the promoter has paid for it
depriving him of the secret profit.
 If these are not appropriate (e.g. cases
where the property has altered in such a manner
that it is not possible to cancel the contract or
where the promoter has already received his Companies act,2013 vs companies
secret profit), the company can sue him for act,1956
breach of trust. Damages up to the difference History
between the market value of the property and
the contract price can be recovered from him. THE COMPANIES ACT, 1956 IS THE COMPANIES ACT, 2013 WAS
AN ACT OF PARLIAMENT THAT RECENTLY PASSED BY RAJYA SABHA ON
 If the promoter fails to disclose the WAS ENACTED IN 1956. 8th AUGUST 2013 AND HAS RECEIVED
PRESIDENTIAL ASSENT ON 29th AUGUST
profit made by him in course of promotion or 2013.
knowingly makes false statement in the
prospectus whereby the person rely on that
statement makes a loss, he will be liable to An Overview
make the loss good the loss suffered by that
other person. The promoter is liable for untrue Companies Companies
statement contained in the prospectus can sue Act, 1956 Act, 2013
the promoter for the loss or damages sustained
The Act is separated The Act is separated
by him as the result of such untrue statement. into 13 parts having into 29 Chapters
658 Sections along having 470 Sections
with 15 Schedules. along with 7
REWARDS TO THE PROMOTER:-
Schedules.

 In the form of remuneration;

 The promoter can make profits on
transactions entered by him with the The Companies Act has a substantial
company after making full disclosure to part of the law prescribed within
the company and its members. itself.
 The promoter may sell his property for
fully paid up shares in the company after The Companies Act gives substantial powers to
making full disclosure. the Government and hence major
 Option to buy further shares in the prescriptions would be in the form of Rules to
company. be notified separately.
 The promoter may be given commission
on shares sold.
 The Articles may provide for fixed sum to
be paid by the company to him. However,
such provision has no legal effect and the
promoter cannot sue to enforce it but if the UNDER COMPANIES ACT, 2013
company makes such payment, it cannot
recover it back.

There is introduction of new definitions in the

Act which did not exist under the Companies
Act, 1956.

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This project is made keeping the provisions of  ROC empowered to strike off the name
the Companies Act, 2013. of a company incorporated with
Prescribed or as prescribed or as may be wrong/incorrect information.
prescribed used in this project means the Rules  Person deliberately furnishing any
as may be prescribed by CG. false/ incorrect information at the time
of incorporation shall be responsible for
 The concept of One Person Company has fraud under section447 & stringent
been introduced and the said company will punishment.
be formed as a private limited company.  Any person can challenge the validity
This will be called as “OPC Limited”. of incorporation before the tribunal in
This Act provides additional flexibility to case of such company.
OPC. Some of the relaxations provided to
OPC are as under:
 Cash flow statements are not required
 Annual return can be signed by CS or one
director if there is no CS.
 Provisions of board meeting, quorum and
interested director shall not apply to OPC.
 OPC should have minimum one director.
 OPC need not hold an AGM
 Financial statement can be signed by only
one director.
 No approval is required for conversion of
Private Company to One Person Company
or vice versa.
 Object clause of MOA- MOA to contain
the objects for which the company is
proposed to be incorporated and any matter
considered necessary in furtherance
thereof.
 Financial Year of the company- financial
year in relation to any company or body
corporate means the period ending on 31st
March every year in order to align with
the provisions of the Income Tax Act.
 No approval is required for conversion of
Private Company into Public company.
 Even the Private Company have to file the
declarations for Commencement of
business.
 Subsidiary company can hold shares in
holding company as trustees, which was
not allowed under earlier Act.
 Penalizing Provisions-

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PROCEDURE TO INCORPORATE A
COMPANY:-
Step1-SELECTION OF THE TYPE OF
COMPANY
 A company comes into existence when a
number of persons come together with a
view to exploit some business opportunity.
These persons are called promoters. An
incorporated company can be a company
limited by shares or limited by guarantee
or an unlimited company.
 The application for registration of a
company should be presented to the
registrar of the state in which the business
office of the company is to be situated.
Now I am giving a brief step by step
procedure for incorporating a company.
 It is depending upon the purpose for which
the company is to be incorporated.
 The promoter can select the type of
company as they wish to form themselves
into. As per my view company can be of
following types:
Public
Company
Private
Company
One Person
Company
(OPC)
Non Profit
Making
Company
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Step 2-REQUIREMENT FOR HAVIND
DIN
 No company shall appoint or re-appoint
any individual as Director of the Company
unless he has been allotted a Director
Identification Number (DIN).
 Therefore, before submission of e-form
INC-1 for reservation of name, all the
Directors of the proposed company must
ensure that they are having DIN.
 Every individual, intending to be appointed
as Director of company shall make an
application for allotment of DIN to the
Central Government in the prescribed form
DIR-3.
Step 3-APPLYING FOR RESERVATION
OF THE SELECTED NAME
 The promoters of a new company shall
make an application in e-form INC-1 along
with fee as prescribed in the companies
(Registration of office and fees) Rules,
2014 electronically with the ROC for his
confirmation for the reservation of the
proposed name that it is not undesirable.
 Reservation of the name given by the ROC
shall be valid for a period up to 60 days
only.
Step 4- PREPARATION OF MOA & AOA
 Drafting of MOA & AOA is generally a
step subsequent to the reservation of name
made by the Registrar.
MEMORANDUM OF ASSOCIATION
 It should be noted that the main objects
must be matched with the objects shown in
e-Form INC-1.
 The name of the company with the last
word Limited in the case of Public
company, or the last word private limited in
 case of Private Company. Provided that
nothing shall be apply in case of Section-8
Companies.
 The state in which the registered office of
the company is to be situated
 The liability of the members of the
company, whether limited or unlimited
ARTICLE OF ASSOCIATION
 The article shall contain the regulations for
management of the company
 The article shall contain such matters given
in Table F, G, H, I and J in Schedule 1 as
may be applicable to such company.
Step 5- FILING OF DOCUMENTS WITH
THE REGISTRAR FOR
INCORPORATION OF COMPANY
 File the e-Form INC-7(INC-2 in case OPC)
and the following documents with the ROC
for incorporation of the company within a
period of 60 days from the date of
intimation of reservation of name given by
the Registrar.
 The MOA & AOA of company duly signed
by all the subscribers to the Memorandum
in such a manner as prescribed under the
Companies (Incorporation) Rules, 2014.
 A declaration in prescribed form INC-
8(available in word format) by an Advocate
or CS or CMA or CA in practice, who is
engaged in the formation of the company,
and by a person named in the article as a
Director, manager or secretary of the
Company, that all the requirements of this
Act and the Rules made there under and
matters precedent or incidental thereto have
been complied with.
 An Affidavit in Form INC-9(available in
word form) with the form INC-7 by each
subscribers to the memorandum and by all
the persons named as First Directors that
they are not convicted of any offence in
connection with the promotion, formation
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or management of any Company or they
have not been found guilty of any fraud or
misfeasance under this Act or any previous
company law during the preceding five
years.
Note-it should be noted that specimen
signature and photograph of subscribers to
be attested by Banker or Public Notary
 The address of the correspondence till its
registered office is established.
 The particulars of the persons mentioned in
the articles as the first directors of the
company in the prescribed form DIR-12.
 E-Form INC-22 for verification of the
location of the registered office.
Step 6- Certificate of Incorporation and
allotment of Corporate Identity Number
On satisfaction of the Registrar that all the
requirements have been complied with by the
Company, he will retain the documents and
register the AOA and MOA and will issue a
Certificate of Incorporation in the form INC-
11, within 7 days of the receipt of documents.
Step 7- Commencement of Business
Section 11 of the Companies Act, 2013 says
that a company (Earlier it was for public
company only) having share capital cannot
commence any business or exercise any
borrowing powers unless it files a declaration
with ROC in e-Form INC-21.
 Step 8- Filing of Declaration
A company having share capital shall file the
following documents along with e-Form INC-
21 with the ROC-
 List of the members of the company with
their shareholding.
 List of MD, Directors, Manager, Secretary,
CEO, CFO, Auditors and changes among
them, if any since the date of incorporation.
 Consent of Auditors
 Certified true copy of the Memorandum
and Article of Association of Company.
 Copy of agreements for appointment of
MD, Underwriters, Contracts. Etc entered
into by the promoters before incorporation
of company.
 Details of preliminary expenses already
incurred/ proposed to be incurred by the
company.
 Power of Attorney to obtain the certificate
of commencement of business from ROC.
 Certified True Copy the resolution passed
by the board for approval of filing of
declaration for obtaining COB.
 Confirmation for paid up share capital to
the extent of Rs.5,00,000 in case of public
companies and Rs. 100000 in case of
private and One Person Company, and
proof thereof
 In the end this declaration form shall be
verified by the company secretary or
chartered Accountant or CMA in practice.
Note-it may be noted that if this declaration
i.e., INC-21 is not filed within 180 days of the
incorporation, then ROC has the power to
strike off the Company.
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ONE PERSON COMPANY:-
INTRODUCTION
The introduction of OPC in the legal system is
a move that would encourage corporatization
of micro businesses and entrepreneurship with
a simpler legal regime so that the small
entrepreneur is not compelled to devote
considerable time, energy and resources on
complex legal compliances. This will not only
enable individual capabilities to contribute
economic growth, but also generate
employment opportunity. One Person
Company of sole-proprietor and company form
of business has been provided with
concessional / relaxed requirements under the
Companies Act, 2013. With the
implementation of the Companies Act, 2013, a
single national person can constitute a
Company, under the One Person Company
(OPC) concept.
STATUS OF OPC IN OTHER COUNTRIES
Various countries permit this kind of a
corporate entity (China introduced it in October
2005) in which the promoting individual is
both the director and shareholder.
The amended company law of Pakistan permits
one person to form single-member Company
by filing with registrar, at the time of
incorporation, a nomination in the prescribed
form indicating at least two individuals to act
as nominee director and alternate nominee
director.
In US, several states permit the formation and
operation of a single- member Limited
Liability Company (LLC). In China, one
person is allowed to apply for opening a limited
company with a minimum capital of 1, 00, 000
Yuan. The amended law of China prescribes
that the owner should pay the investment
capital at one time and bars him from opening
a second company of the same kind.
In most countries, the law governing
companies enables a single- member company
have more than one director and grants
exemptions to such companies from holding
AGMs, though records and documents are to be
maintained.
Further aspects relating to nomination in case
of death of sole member and change of status
of the firm are also covered.
DEFINITION
As per the provision of section 2(62) of the
Companies Act, 2013 defined (62) “One
Person Company” means a company which has
only one person as member.
TYPES IN WHICH OPC CAN BE FORMED
 A company limited by shares;
 A company limited by guarantee;
 An unlimited company.
FORMATION OF OPC (RULE 3)
Only a natural person who is an individual
citizen and resident in India
 Shall be eligible to incorporate a One
Person Company.
 Shall be a nominee for the sole member of
a One Person Company.
The ‘person resident in India’ means a person
who has stayed in India for a period of not less
than 182 days immediately preceding one
calendar year.
STAGES OF INCORPORATION OF OPC
 Name Reservation- Form INC-1 (by
payment of Rs.1000 through credit card or
net banking) shall be filed for name
availability.
 Drafting of MOA & AOA- it is generally a
step subsequent to the availability of name
15 | P a g e
made by the registrar. It should be noted
that the main objects should match with the
objects shown in e-Form INC-1 and must
reflect in the name of the company.
 Incorporate OPC- After name approval,
form INC-2 shall be filed for incorporation
of the OPC within 60 days of filing e-Form
INC-1.
 Form DIR-12 shall be filed along with
(linked) Form INC-2 except when
promoter is the sole director of the OPC.
 The company shall file form INC-22 within
30 days once form INC-2 is registered in
case the address of correspondence and
registered office are not same.
FEATURES OF OPC
 One person cannot incorporate more than
one OPC or become nominee in more than
one OPC.
 No minor shall become member or
nominee of the One Person Company or
hold share with beneficial interest.
 No such company can convert voluntarily
into any kind of company unless 2 years
have expired from the date of
incorporation, except in cases where
capital or turnover threshold limits are
reached.
 It must have only one member at any point
of time and may have only one director.
PRIVILEGES AVAILABLE TO OPC
 The most significant reason for
shareholders to incorporate the single-
person company is certainly the desire for
the limited liability.
 Business currently run under the
proprietorship model could get converted
into OPCs without any difficulty.
 Mandatory rotation of auditor after expiry
of maximum term is not applicable.
 One Person Company needs to have
minimum of one director. It can have
 directors up to a maximum of 15 which can
also be increased by passing a special
resolution as in case of any other company.
 The provisions of Section 98 and 100 to
111, relating to holding of general
meetings, shall not apply to One Person
Company.
 Minimum authorized capital for One
Person Company having share capital is
Rs.1, 00, 000.
 Minimum and maximum number of
members for One Person Company is one
only.
PROHIBITED ACTIVITIES
 Such company cannot be incorporate or
converted into a company under Section 8
of the Act.
 Such company cannot carry out Non-
Banking Financial Investment activities
including investment in securities of any
Body Corporate.
CONVERSION
ONE PERSON COMPANY TO CONVERT
ITSELF INTO A PUBLIC COMPANY OR A
PRIVATE COMPANY IN CERTAIN CASES
(Rule-6)
1. Compulsory conversion of OPC
 Where the paid up capital of an One Person
Company exceeds Rs. 50 lacs or its average
annual turnover exceeds Rs. 2 crores
immediately preceding three consecutive
financial year,
 Such OPC shall require to convert itself,
into either a private company or a public
company in accordance with the provision
of Section 18 of the Act within 6 months
of the date mentioned above,
 The OPC shall alter its memorandum and
articles by passing a resolution in
accordance with Section 122(3) of the Act
16 | P a g e
to give effect to the conversion and to make
the necessary changes incidental thereto,
 The OPC shall within a period of sixty days
from the date of applicability of above
provisions, give a notice to the Registrar in
Form No. INC-5 informing that it has
ceased to be an OPC and that it is now
required to convert itself into a private
company by virtue of it’s paid up share
capital or average annual turnover, having
exceeded the threshold limit laid down
above.
2. Voluntary conversion of OPC
 A One Person Company can get itself
registered into a private company or a
public company after increasing the
minimum number of seven members and
two or three directors as the case may be,
and by maintaining the minimum paid up
capital as per the requirements of the Act
for such class of company and by making
due compliance of Section 18 of the Act for
the conversion.
CONVERSION OF PRIVATE COMPANY
INTO ONE PERSON COMPANY (Rule-7)
 A private company other than a company
registered under Section-8 of the Act
having paid up share capital up to Rs. 50
lacs or average annual turnover during the
relevant period up to Rs. 2 Crores may
convert itself into One Person Company by
passing a Special Resolution in general
meeting.
 Before passing such resolution the
company shall obtain No Objection in
writing form members and creditors.
 The One Person Company shall file copy of
Special Resolution with the Registrar of
 Companies (ROC) within 30 days from the
date of passing such resolution in Form No.
MGT-14.
 The company shall file an application in
Form No. INC-6 for its conversion into
One Person Company along with fees
specified, by attaching following
documents namely:
 the directors of the company shall give
a declaration by way of affidavit duly
sworn in confirming that all members
and creditors of the company have
given their consent for conversion, the
paid up share capital of the company is
Rs. 50 lacs or less or average annual
turnover is Rs. 2 Crores or less, as the
case may be,
 the list of members and list of
creditors,
 the latest Audited Balance Sheet and
Profit & Loss Account,
 The copy of No Objection letter of
secured creditors.
 On being satisfied and complied with
requirements stated herein the Registrar
shall issue the Certificate.
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Section 8: Incorporation of Non-Profit
Making Company
INTRODUCTION
The concept of non- profit making company is
quite old in India in erstwhile Companies Act,
1956 it was regulated by Section 25 and that is
why it was popular as Section 25 Company.
However in Companies Act 2013 provisions
related to non-profit making company are
given in Section 8 read with Rule 19 and 20 of
Companies (Incorporation) Rules, 2014. There
may be various forms of a Charitable
Organization in India and such organization
can be formed/ registered as trusts, societies, or
as a non-profit company incorporated under
Section 8 of the Companies Act, 2013.
MEANING
A non- profit making Company is a Company
which:
(a) Has in its objects the promotion of
commerce, art ,science, sports,
education, research, social welfare,
religion, charity, protection of
environment or nay such other object;
(b) Intends to apply its profits, if any, or
other income in promoting its objects;
and
(c) Intends to prohibit the payment of any
dividend to its members.
FORMATION OF COMPANIES WITH
CHARITABLE OBJECTS
As per section 8 of Companies Act, 2013 where
it is proved to the satisfaction of the Central
Government that a person or an association of
persons want to register themselves under
section 8 as a limited company for the
furtherance of above mentioned objects, the
Central Government may, by licence issued in
prescribed manner allow that person or
association of persons to be registered as a
limited company under this section without the
addition to its name of the word “Limited” or “
Private Limited” as the case may be, and
thereupon the Registrar shall, on application, in
the prescribed form, register such person or
association of persons as a company under this
Section.
PROCEDURE FOR REGISTRATION OF
NON-PROFIT MAKING COMPANY
Procedure for getting License under section 8
for new companies with charitable object is
given in Rule 19 of Companies (Incorporation)
Rules, 2014. Following is the process:
 Obtain Digital Signatures
Nowadays various document prescribed
under Companies Act, 2013, are 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 a Class II
Digital Signature Certificate from
authorized DSC issuing company for at
least one director to sign the E-forms
related to incorporation like form INC-1
and other documents.
 Obtain Director Identification Number
(Section 153)
As per section 153 of the Companies Act,
2013 every individual intending to be
appointed as director of a company shall
make an application for allotment of
Director Identification Number in form
DIR-3 to the Central Government in such
form and manner and along with such fees
as may be prescribed.
Therefore, before submission of e-Form
INC-1 for availability of name, all the
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directors of the proposed company must
ensure that they are having DIN and if they
are not having DIN, it should be first
obtained.
 Name Availability For Proposed
Company
As per section 4(4) read with Rule-9 of
Companies (Incorporation) Rules, 2014,
application for the reservation/
applicability of name shall be in Form No.
INC-1 along with prescribed fee of
Rs.1000/-. In selection of Company name
should be in accordance with the name
guidelines given in Rule-8 of companies
(Incorporation) Rules, 2014. The name will
be valid for a period of 60 days from the
date on which the application for
Reservation was made. After approval of
name ROC will issue a Name Availability
letter w.r.t approval for availability of name
for a proposed company.
Note: MCA has prescribed certain rules for
name availability so it is advisable to check
guidelines for the same before applying for
name.
 Preparation of MOA & AOA
Drafting of MOA & 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 INC-1. These two
documents are basically the charter and
internal rules and regulations of the
Company. Therefore, it must be drafted
with utmost care and with the advice of the
experts and the other object clause should
be drafted in a very broader sense. The
MOA of the proposed company shall be in
form No.INC-13.
 Licence Under Section 8 For New
Companies With Charitable Purpose
 A person or an association of persons
desirous of incorporating a company with
limited liability under sub-section (1) of
section 8 without the addition to its name of
the word Limited or Private Limited as the
case may be shall make an application in
Form No.INC-12, along with the
prescribed fee, to the Registrar for a licence
under sub-section (1) of section 8.
SPICe – Simple Form for Incorporating
Company
 MCA has introduced SPICE scheme or
Simplified Proforma for Incorporating
Company Electronically
through Companies (Incorporation) Fourth
Amendment Rules, 2016. The scheme is
rather sweet for professionals if compared
to other Incorporation process. This
simplified & integrated process for
incorporation of a company is done through
Form No. INC-32, e- Memorandum of
Association in Form No. INC-33 and e-
Articles of Association in Form No. INC-
34.
Earlier Form Filing:
 Application for obtaining a DIN in DIR-3.
 Approving the name of the company in
INC-1.
 A separate form for registration of the
company (with MOA & AOA) in INC-7.
 Form INC-22 for sharing the details of
registered office.
 A separate form DIR-12 which should be
sent to every director.
SPICe – Form INC-32
 Form INC-32 can help incorporate a
company quickly in India by integrating
many of the steps into a single process.
Using SPICe Form INC-32, the following
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types of companies can be incorporated in
India:
 Private Limited Company
 Public Limited Company
 One Person Company
 Section 8 Company
 Producer Company
The company can also be of different
categories like company limited by shares,
company limited by guarantee or unlimited
company.
Form INC-32 vs Form INC-29
 Form INC-32 is very similar to Form INC-
29 or the Integrated Incorporation Form,
which is currently in use. Form INC-29 and
SPICe Form INC-32 can help incorporate a
company in a single step within 1 or 2 days.
However, the biggest difference between
SPICe Form and INC-29 is that in SPICe
Form INC-32, there is a provision for
entering name approval that was already
obtained by the applicant – thereby
assuring the name. In Form INC-29, there
is no procedure for entering a previously
obtained name approval leading for
chances for resubmission or rejection of the
application.
Procedure for Filing SPICe – Form INC-32
 Form INC-32 must be accompanied by
supporting documents including details of
Directors & subscribers, affidavits,
declarations, identity proof, address proof,
MoA and AoA etc. Once the eForm is filed,
its processed by the MCA’s Central
Processing Centre. If found complete,
company would be registered and CIN
would be allocated. Also DINs gets issued
to the proposed Directors who do not have
a valid DIN. Maximum three Directors are
allowed for using this integrated form for
 filing application of allotment of DIN while 8. NOC from the sole proprietor/
incorporating a company. partners/other associates/ existing
company
 In addition to the allotment of DIN and 9. Proof of identity and residential address of
providing of incorporation certificate, the the subscribers
10. Proof of identity and residential address of
Company’s PAN, TAN and ESIC
directors
registration can also be obtained easily in a
single step while using Form INC-32. Advantages of SPICe
 No need to reserve Companies Name prior
Declaration by Professional to Incorporation. Even if companies have
 The digital signature of a professional applied for name in INC-1, at point No.
(Chartered Accountant/ Company 5(a)(i) of INC-32 where it has been asked
Secretary/ Cost Accountant/ Advocate) is whether approval of name in form INC-1
required to file Form INC-32. The has been taken, fill NO (this option was not
Professional must declare that all available in INC-29). But it is advisable to
information presented in the form is correct file INC-1 first as only one name can be
and enter his/her membership number and proposed in this form also (same as INC-
certificate number. 29).
 E-MOA & E-AOA.
 In form INC-34, select the table applicable
Documents Required for SPICe Form INC-
to you i.e. which table of AOA is applicable
32
on you. Clauses will appear on the screen.
The following documents must be filed
The same can be altered or marked “Not
with SPICe Form INC-32 for incorporation of
Applicable”.
company:

1. Memorandum of Association – Applicable Disadvantages Of SPICe System

and mandatory only in case of Section 8  The biggest disadvantage in SPICE system
company or company with foreign is that the maximum number of subscribers
subscribers not having DIN
2. Articles of Association – Applicable and can be seven only. In case of more
mandatory only in case of Section 8 subscribers, normal incorporation
company or company with foreign procedure has to be followed.
subscribers not having DIN
3. Affidavit and declaration by first  Only one name of the company can be
subscriber(s) and director(s) – Mandatory proposed.
in all cases
4. Proof of office address
 It is a bit costlier as DSC of all subscribers
5. Copies of utility bills that are not older than and witness is needed.
two months
6. Copy of approval in case the proposed
name contains any word(s) or
expression(s) which requires approval from
central government
7. If the proposed name is based on a
registered trademark or is subject matter of
an application pending for registration
under the Trade Marks Act, then it is
mandatory to attach the trademark
registration certificate or trademark
application copy

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ADMINISTRATION OF THE COMPANY
The administration includes the people who are
either owners or partners of the firm. They
usually contribute to the firm’s capital and earn
profits or returns on their investment. The main
administrative function is handling the
business aspects of the firm, such as finance.
Other administrative functions usually include
planning, organizing, staffing, directing,
controlling and budgeting. Administration
must integrate leadership and vision, to
organize the people and resources, in order to
achieve common goals and objectives of the
organization.
HIGHLIGHTS
 Disclosures in the annual return
 Particulars of holding, subsidiary and
associate company
 Certificate of compliance by practicing
company secretary
 Remuneration to directors and key
managerial personnel
 Change in promoter stake
 Applicable on listed companies only
 Should capture the change in number of
shares held by the promoters and the
top ten shareholders of the company.
 Time period- 15 days from change
 Annual General Meeting
 First AGM within nine months from the
closure of the financial year
 Quorum for meetings
 For public companies, quorum is
dependent on number of members of
the company. Companies with more
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than 5000 members would require 30
members to form a quorum
 Voting through electronic means
 Prescribed class or classes of
companies will be permitted to exercise
his right to vote electronically.
 Demand for poll
 Eligibility for demand for polls may be
made by a person present and having
not less than 1/10th of the total voting
power or not less than a sum of Rs. 5
Lacs or such higher amount.
 Postal Ballots
 Postal ballot is permitted for all
companies except One member
company and company with less than
fifty members cannot transact the
business through postal ballot
 Draft rules provide for business such as
alteration of the object clause, articles,
change in the registered office, change
in the object of a public limited
company, issue of depository receipts,
variation in the rights of a class of
shares, buy back, election of director,
sale of whole or substantially whole
undertaking of a company, giving or
extending loans.
 Circulation of member’s resolution
 1/10th of members or 1/10th of voting
power can requisition a circular
resolution.
 The company to bear the expenditure of
the circulation of the resolution.
 Resolution requiring special notice
 Notice can be given by Members
holding 1% of total voting power or
sum of Rs. 5 lacs in paid up capital on
the date of the notice.
Register of Members :
 Every company shall, from the date of
its registration, maintain a register of
members in Form No. MGT-1
  In the case of a company not having
share capital, the register of members
shall contain the following particulars,
in respect of each member, namely:
(a) Name of the member, address,
email, PAN number or CIN;
Unique Identification Number, if
any; Father’s/ Mother’s/ Spouse
Name; Occupation; Status;
Nationality; in case of minor, name
of the guardian and the date of
birth of the member; name and
address of the nominee;
(b) Date of becoming the member;
(c) Date of cessation;
(d) Amount of guarantee, if any;
(e) Any other interest , if any;
(f) Instructions, if any, given by the
member with regard to sending the
notices etc.
Register of Debenture holders or any other
security holders:
 Every company issue or allots debentures
or any other security shall maintain a
separate register of debenture holders, as
the case may be, for each type of debentures
or other securities in Form No.MGT-2.
Maintenance of the Register of members,
etc (Section 88)
 Every company shall maintain the registers
under clauses (a),(b) and (c) of sub-section
(1) of section 88 in the following manner
namely:-
(1) The entries in the registers maintained
under section 88 shall be made within
seven days after the Board of Directors or
its duly constituted committee approves the
allotment of transfer of shares, debentures
or any other securities, as the case may be.
(2) The registers shall be maintained at the
registered office of the company unless a
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special resolution is passed in a general
meeting authorising the keeping of the
register at any other place within the city,
town or village in which the registered
office is situated or any other place in India
in which more than 1/10th of the total
members entered in the register of members
inside.
(3) Consequent upon any forfeiture, buy- back,
reduction, sub-division, consolidation or
cancellation of shares, issue of sweat equity
shares, transmission of shares, shares
issued under any scheme of arrangements,
mergers, reconstitution or employees stock
option scheme or any of such scheme
provided under this Act or by issue of
duplicate or new share certificates or new
debenture or other security certificates,
entry shall be made within seven days after
approval by the Board or committee, in the
register of members or in the respective
registers, as the case may be.
(4) If any change occurs in the status of
member or debenture holder or any other
security holder whether due to death or
insolvency or change of name or due to
transfer to Investor Education Protection
Fund or due to any other reason, entries
thereof explaining the change shall be made
in the respective register.
(5) If any rectification is made in the register
maintained under section 88 by the
company pursuant to any order passed by
the competent authority under the Act, the
necessary reference of such order shall be
indicated in the respective register.
(6) If any order is passed by any judicial or
revenue authority or by Security and
Exchange Board of India (SEBI) or
competent authority attaching the shares,
debentures or other securities and giving
directions for remittance of dividend or
interest, the necessary reference of such
 order shall be indicated in the respective
register.
(7) In case of companies whose securities are
listed on a stock exchange in or outside
India, the particulars of any pledge, charge,
lien or hypothecation created by the
promoters in respect of any securities of the
company held by the promoter including
the names of Pledgee/ Pawnee and any
revocation therein shall be entered in the
register within fifteen days from such an
event.
(8) If promoters of any listed company, which
has formed a joint venture company with
another company have pledged or
hypothecated or created charge or lien in
respect of any security of the listed
company in connection with such joint
venture company, the particulars of such
pledge, hypothecation, charge and lien
shall be entered in the register of members
of the listed company within fifteen days
from such an event.
Index of names to be included in Register
 Every register maintained under sub-
section (1) of section 88 shall include an
index of the names entered in the respective
registers and the index shall, in respect of
each folio, contain sufficient indication to
enable the entries relating to that folio in the
register to be readily found:
Provided that the maintenance of index is
not necessary in case the number of
members is less than fifty.
 The company shall make the necessary
entries in the index simultaneously with the
entry for allotment or transfer of any
security in the Register.
Foreign register of members, debenture
holders, other security holders or beneficial
owners residing outside India
 A company which has share capital or
which has issued debentures or any other
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security may, if so authorised by its articles,
keep in any country outside India, a part of
the register of members or as the case may
be, of debenture holders or nay of any other
security holders or of beneficial owners,
resident in that country (hereafter in this
rule referred to as the “foreign register”).
 The company shall be deemed to be part of
the company’s register (hereafter in this
rule referred to as the “principal register”)
of members or of debenture holders or of
any other security holders or beneficial
owners, as the case may be.
 The foreign register shall be maintained in
the same format as the principal register.
 A foreign register shall be open to
inspection and may be closed, and extracts
may be taken there from and copies thereof
may be required, in the same manner,
mutatis mutandis, as is applicable to the
principal register, except that the
advertisement before closing the register
shall be inserted in at least two newspapers
circulating in the place wherein the foreign
register is kept.
 If a foreign register is kept by a company in
any country outside India, the decision of
the appropriate competent authority in
regard to the rectification of the register
shall be binding.
 Entries in the foreign register maintained
under sub-section (4) of section 88 shall be
made simultaneously after the Board of
Directors or its duly constituted committee
approves the allotment or transfer of shares,
debentures or any other securities, as the
case may be.
 The company shall-
(a) Transmit to its registered office in
India a copy of every entry in any
foreign register within fifteen days
after the entry is made; and
(b) Keep at such office a duplicate register of
every register duly entered up from
time to time.
 Every such duplicate register shall, for all
the purposes of this Act, be deemed to be
part of the principal register.
 Subject to the provisions of section 88 and
the rules made there under, with respect to
duplicate registers, the shares or as the case
may be, debentures or any other security,
registered in any foreign register shall be
distinguished from the shares or as the case
may be, debentures or nay other security,
registered in the principal register and in
every other foreign register; and no
transaction with respect to any shares or as
the case may be, debentures or any other
security, registered in a foreign register
shall, during the continuance of that
registration, be registered in any other
register.
 The company may discontinue the keeping
of any foreign register and thereupon all
entries in that register shall be transferred
to some other foreign register kept by the
company outside India or to the principal
register.
Authentication
 The entries in the registers maintained
under section 88 and index included therein
shall be authenticated by the company
secretary of the company or by any other
person authorized by the Board for the
purpose, and the date of the board
resolution authorizing the same shall be
mentioned.
 The entries in the foreign register shall be
authenticated by the company secretary of
the company or person authorized by the
 company shall make a note of such
declaration in the register of members and
shall file, within a period of thirty days
24 | P a g e
board by appending his signature to each
entry.
Declaration in respect of beneficial interest
in any shares
 A person whose name is entered in the
register of members of a company as the
holder of shares in that company but who
does not hold the beneficial interest in such
shares (hereinafter referred to as “the
registered owner”) shall file with the
company, a declaration to that effect in
Form No. MGT-4, in duplicate, within a
period of thirty days from the date on which
his name is entered in the register of
members of such company:
Provided that where any change occurs in
the beneficial interest in such shares, the
registered owner shall, within a period of
thirty days from the date of such change,
make a declaration of such change to the
company in Form No. MGT-4 in
duplicate.
 Every person holing and exempted from
furnishing declaration or acquiring a
beneficial interest in shares of the company
not registered in his name (hereinafter
referred to as “the beneficial owner”) shall
file with the company, a declaration
disclosing such interest in Form No.
MGT-5 in duplicate, within thirty days
after acquiring such beneficial interest in
the shares of the company: provided that
where any change occurs in the beneficial
interest in such shares, the beneficial owner
shall, within a period of thirty days from the
date of such changes, make a declaration of
such change to the company in Form No.
MGT-5 in duplicate.
 Where any declaration under section 89 is
received by the company, the
from the date of receipt of declaration by it,
a return in Form No. MGT-6 with the
 Registrar in respect of such declaration
with fee.
Closure of register of members or debenture
holders or other security holders:
 A company closing the register of members
or the register of debenture holders or the
register of other security holders shall give
at least seven days previous notice and in
such manner, as may be specified by SEBI,
if such company is a listed company or
intends to get its securities listed, by
advertisement at least once in a vernacular
newspaper in the principal vernacular
language of the district and having a wide
circulation in the place where the registered
office of the company is situated, and at
least once in English language in an
English newspaper circulating in that
district and having wide circulation in the
place where the registered office of the
company is situated and publish the notice
on the website as may be notified by the
Central Government and on the website, if
any, of the company.
 The provisions contained in sub-rule (1)
shall not be applicable to a private company
provided that the notice has been served on
all members of the private company not
less than seven days prior to closure of the
register of members or debenture holders or
other security holders.
Annual Return:
 Every company shall prepare its annual
return in Form No. MGT-7.
 The annual return, filed by a listed
company or a company having paid-up
share capital of ten Crore rupees or more or
turnover of fifty Crore rupees or more, shall
be certified by a Company Secretary in
practice and the certificate shall be in Form
No. MGT-8.
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Extract of annual return:
 The extract of the annual return to be
attached with the Board’s Report shall be in
Form No. MGT-9.
 A copy of the annual return shall be filed
with the Registrar with such fee as may be
specified for the purpose.
Return of changes in shareholding position
of promoters and top ten shareholders:
 Every listed company shall file with the
Registrar, a return in Form No. MGT-10
along with the fee with respect to changes
relating to either increase or decrease of
two percent or more in the shareholding
position of promoters and top ten
shareholders of the company in each case,
within fifteen days of such change.
Inspection of registers, returns, etc:
 The registers and indices maintained
pursuant to section 88 and copies of returns
prepared pursuant to section 92, shall be
open for inspection during business hours,
at such reasonable time on every working
day as the board may decide, by any
member, debenture holder, other security
holder or beneficial owner without
payment of fee as may be specified in the
articles of association of the company but
not exceeding fifty rupees for each
inspection.
Explanation- for the purpose of this sub-
rule, reasonable time of not less than two
hours on every working day shall be
considered by the company.
 Any such member, debenture holder,
security holder or beneficial owner or any
other person may require a copy of such
register or entries therein or return on
payment of such fee as may be specified in
the articles of association of the company
but not exceeding ten rupees for each page.
Such copy or entries or return shall be
 supplied within seven days of deposit of
such fee.
Preservation of register of members etc. and
annual return
 The register of members along with the
index shall be preserved permanently and
shall be preserved permanently and shall be
kept in the custody of the company
secretary of the company or any other
person authorized by the Board for such
purpose; and
 The register of debenture holders or any
other security holders along with the index
shall be preserved for a period of eight
years from the date of redemption of
debentures or securities, as the case may be,
and shall be kept in the custody of the
company secretary of the company or any
other person authorized by the Board for
such purpose.
 Copies of all annual returns prepared u/s 92
and copies of all certificates and documents
required to be annexed thereto shall be
preserved for a period of eight years from
the date of filing with the registrar.
 The foreign registrar of members shall be
preserved permanently, unless it is
discontinued and all the entries are
transferred to any other foreign register or
to the principal register. Foreign register of
debenture holders or any other security
holders shall be preserved for a period of
eight years from the date of redemption of
such debentures or securities.
 The foreign register shall be kept in the
custody of the company secretary or person
authorised by the Board.
 A copy of the proposed special resolution
in advance to be filed with the registrar as
required in accordance with first proviso of
sub-section(1) of section 94, shall be filed
with the Registrar, at least one day before
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the date of general meeting of the company
in Form No. MGT-14.
Copies of the registers and annual return:
 Copies of the registers maintained u/s 88 or
entries therein and annual return filed u/s
92 shall be furnished to any member,
debenture-holder, other security holder or
beneficial owner of the company or any
other person on payment of such fee as may
be specified in the AOA of the company but
not exceeding rupees ten for each page and
such copy shall be supplied by the company
within a period of seven days from the date
of deposit of fee to the company.
Calling of EOGM by Requistionists:
 The members may requisition convening of
EOGM in accordance with sub-section (4)
of Section 100, by providing such
requisition in writing or through electronic
mode at least twenty one clear days prior to
the proposed date of such extraordinary
general meeting.
 The notice shall specify the place, date, day
and hour of the meeting and shall contain
the business to be transacted at the meeting.
Explanation-for the purposes of this sub-
rule, it is hereby clarified that
requisitionists should convene meeting at
Registered office or in the same city or town
where Registered office is situated and such
meeting should be convened on working
day.
*If the resolution is to be proposed as a
special resolution, the notice shall be given
as required by sub-section (2) of section
114.
 The notice shall be signed by all the
requisitionists or by a requisitionist duly
authorised in writing by all other
requisitionists on their behalf or by sending
an electronic request attaching therewith a
 scanned copy of such duly signed
requisition.
 No explanatory statement as required u/s
102 need to be annexed to the notice of an
extraordinary general meeting convened by
the requisitionists may disclose the reasons
for the resolution(s) which they purpose to
move at the meeting.
 The notice of the meeting shall be given to
those members names appear in the
Register of members of the company within
three days on which the requisitionists
deposit with the company a valid
requisition for calling an EOGM.
 Where the meeting is not convened, the
requisitionists shall have a right to receive
list of members together with their
registered address and number of shares
held and the company concerned is bound
to give a list of members together with their
registered address made as on the twenty
first day from the date of receipt of valid
requisition together with such changes, if
any, before the expiry of the forty-five days
from the date of receipt of a valid
requisition.
 The notice of the meeting shall be given by
speed post or registered post or through
electronic mode. Any accidental omission
to give notice to, or the non-receipt of such
notice by, any member shall not invalidate
the proceedings of the meeting.
Notice of the meeting:
 A company may give notice through
electronic mode. Explanation: For the
purpose of this rule, the expression
“electronic mode” shall mean any
communication sent by a company through
its authorized and secured computer
programme which is capable of producing
communication at last electronic mail
address provided by the member.
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 A notice may be sent through e-mail as a
text or as an attachment to e-mail or as a
notification providing electronic link or
Uniform Resource Locator for accessing
such notice.
 (i) The email shall be addressed to the
person entitled to receive such e-mail as per
the records of the company or as provided
by the depository:
Provided that the company shall provide an
advance opportunity at least once in a
financial year, to the member, to the
register his email address and changes
therein and such request may be made by
only those members who have not got their
email id recorded or to update a fresh email
id and not from the members whose e-mail
ids are already registered.
(ii) The subject line in e-mail shall state the
name of the company, notice of the type of
meeting, place and the date on which the
meeting is scheduled.
(iii) If notice is sent in the form of non-
editable attachment to e-mail, such
attachment shall be in the Portable
Document Format or in a non-editable
format together with a ‘link or
instructions’ for recipient for downloading
relevant version of the software.
(iv) When the notice or notifications of
availability of notice are sent by e-mail, the
company should ensure that it uses a
system which produces confirmation of the
total number of recipients e-mailed and the
record of each recipient to whom the notice
has been sent and copy of such record and
any notices of any failed transmissions and
subsequent re-sending shall be retained by
or on behalf of the company as “proof of
sending”.
(v) The company’s obligation shall be
satisfied when it transmits the e-mail and
the company shall not be held responsible
 for a failure in transmission beyond its
control.
(vi) If a member entitled to receive notice
fails to provide or update relevant e-mail
address to the company or to the depository
participant as the case may be, the company
shall not be in default for not delivering the
notice via e-mail.
(vii) The company may send e-mail
through in-house facility or its registrar and
transfer agent or authorise any third party
agency providing bulk-email facility.
(viii) The notice made available on the
electronic link or Uniform Resource
Locator has to be readable, and the
recipient should be able to obtain and retain
copies and the company shall give the
complete Uniform Resource Locator or
address of the website and full details of
how to access the document or information.
(ix) The notice of the general meeting of the
company shall be simultaneously placed on
the website of the company if any and on
the website as may be notified by
the Central Government.
Explanation- for the purpose of this rule, it
is hereby declared that the extraordinary
general meeting shall be held at a place
within India.
Proxies:
 A member of the company registered u/s 8
shall not be entitled to appoint any other
person as his person unless such other
person is also a member of such company.
 A person can act as proxy on behalf of
members not exceeding fifty and holding in
the aggregate not more than 10% of the
total share capital of the company carrying
voting rights.
Provided that a member holding more
than 10% of the total share capital of the
Company carrying voting rights may
appoint a single person as proxy and
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such other person shall not act as proxy
for any other person or shareholder.
The appointment of proxy shall be in the Form
No.MGT-11.
Voting through electronic means:
 Every listed company or a company having
not less than one thousand shareholders
shall provide to its members facility to
exercise their right to vote at general
meetings by electronic means.
 A member may exercise his right to vote at
any general meeting by electronic means
and company may pass any resolution by
electronic voting system in accordance
with the provisions of this rule.
Explanation: For the purpose of this rule-
(i) the expressions “voting by electronic
means” or “electronic voting system”
means a ‘secured system’ based process of
display of electric ballots, recording of
votes of the members and the number of
votes polled in favour or against, such that
the entire voting exercised by way of
electronic means gets registered and
counted in an electronic registry in a
centralized server with adequate ‘cyber
security’;
(ii) The expression “secured system”
means computer hardware, software and
procedure that-
(a) Are reasonably secure from
unauthorized access and misuse.
(b) Provide a reasonable level of
reliability and correct operation.
(c) Are reasonably suited to performing
the intended functions; and
(d) Adhere to generally accepted
security procedures.
(iii) the expression “cyber security” means
protecting information, equipment,
devices, computer, computer resource,
communication device and information
stored therein from unauthorized access,
 use, disclosures, disruption, modification
or destruction.
 A company which opts to provide the
facility to its members to exercise their
votes at any general meeting by electronic
voting system shall follow the following
procedure, namely;
(i) The notices of the meeting shall be sent
to all the members, auditors of the
company, or directors either-
(a) By registered post or speed post; or
(b) Through electronic means like
registered e-mail id;
(c) Through courier service;
(ii) The notice shall also be placed on the
website of the company, if any and of the
agency forthwith after it is sent to the
members;
(iii) The notice of the meeting shall clearly
mention that the business may be transacted
through electronic voting system and the
company is providing facility for voting by
electronic means;
(iv)the notice shall clearly indicate the
process and manner for voting by electronic
means and the time schedule including the
time period during which the votes may be
cast and shall also provide the login ID and
create a facility for generating password
and for keeping security and casting of vote
in a secure manner;
(v) the company shall cause as
advertisement to be published, not less than
five days before the date of beginning of the
voting period, at least once in a vernacular
newspaper in the principal vernacular
language of the district in which the
registered office of the company is situated,
and having a wide circulation in that
district, and at least once in English
language in an English newspaper having a
wide circulation in that district, about
having sent the notice of the meeting and
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specifying therein, inter alia, the following
matters, namely;
(a) Statement that the business may be
transacted by electronic voting;
(b) The date of completion of sending of
notices;
(c) The date and time of commencement of
voting through electronic means;
(d) The date and time of end of voting
through electronic means;
(e) The statement that voting shall not be
allowed beyond the said date and time;
(f) Website address of the company and
agency, if any, where notice of the meeting
is displayed; and
(g) Contact details of the person
responsible to address the grievances
connected with electronic voting;
(vi) The e-voting shall remain open for one
to three days: provided that in all such
cases, such voting period shall be
completed three days prior to the date of
general meeting;
(vii) During the e-voting period,
shareholders whether they have shares in
physical or dematerialized form, they can
cast their vote electronically; provided that
once the vote on a resolution is cast by the
shareholder, he shall not be allowed to
change it subsequently.
(viii) At the end of the voting period, the
portal where votes are cast shall forthwith
be blocked.
(ix) the Board of directors shall appoint one
scrutinizer, who may be chartered
accountant in practice, cost accountant in
practice, or Company Secretary in practice
or an advocate, but not in employment of
the company and is a person of repute who,
in the opinion of the Board can scrutinize
the e-voting process in a fair and
transparent manner: provided that the
scrutinizer so appointed may take
assistance of a person who is not in
 employment of the company and who is
well-versed with the e-voting system;
(x) The scrutinizer shall be willing to be
appointed and be available for the purpose
of ascertaining the requisite majority;
(xi) The scrutinizer shall, within a period
not exceeding three working days from the
date of conclusion of e-voting period,
unblock the votes in the presence of at least
two witnesses not in the employment of the
company and make a scrutinizer’s report of
the votes cast in favour or against, if any,
forthwith to the Chairman;
(xii) The scrutinizer shall maintain a
register either manually or electronically to
record the assent or dissent, received,
mentioning the particulars of name,
address, folio number or client ID of the
shareholders, number of shares held by
them, nominal value of such shares and
whether the shares have differential voting
rights;
(xiii) The register and all other papers
relating to electronic voting shall remain in
the safe custody of the scrutinizer until the
chairman considers, approves and signs the
minutes and thereafter, the scrutinizer shall
return the register and other related papers
to the company.
(xiv) The results declared along with the
scrutinizer’s report shall be placed on the
website of the company and on the website
of the agency within two days of passing of
the resolution at the relevant general
meeting of members;
(xv) Subject to receipt of sufficient votes,
the resolution shall be deemed to be passed
on the date of the relevant general meeting
of members.
Manner in which the Chairman of the
meeting shall get the poll process scrutinized
and report thereon:
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 The chairman of the meeting shall ensure
that-
(a) The Scrutinizers are provided with the
Register of Members, specimen signatures
of the members, Attendance Register and
Register of Proxies.
(b) The Scrutinizers are provided with all the
documents received by the Company
pursuant to sections 105,112 and 113.
(c) The Scrutinizers shall arrange for Polling
papers and distribute them to the members
and proxies present at the meeting, in case
of joint shareholders, the polling paper
shall be given to the first named holder or
in his absence to the joint holder attending
that meeting as appearing in the
chronological order in the folio and the
Polling Paper shall be in the Form No.
MGT-12.
(d) The Scrutinizers shall keep a record of the
polling papers received in response to poll,
by initialing it.
(e) The Scrutinizers shall lock and seal an
empty polling box in the presence of the
members and proxies.
(f) The Scrutinizers shall open the Polling
Box in the presence of two persons as
witnesses after the voting process is over.
(g) In case of ambiguity about the validity of
a proxy, the Scrutinizers shall decide the
validity in consultation with the Chairman.
(h) The Scrutinizers shall ensure that if a
member who has appointed a proxy has
voted in person, the proxy’s vote shall be
disregarded.
(i) The Scrutinizers shall count the votes and
send a report to the Chairman.
(j) Where voting is conducted by electronic
means under the provisions of section 108
and rules made there under, the company
shall provide all the necessary support,
technical and otherwise, to the
Scrutinizers in orderly conduct of the
voting and counting the result thereof.
(k) The Scrutinizers report shall state total
votes cast, valid votes, votes in favour and
against the resolution including the details
of invalid polling papers and votes
comprised therein.
(l) The Scrutinizers shall submit the Report to
the Chairman who shall counter-sign the
same.
(m) The Chairman shall declare the result of
Voting on poll. The result may either be
announced by him or a person authorised
by him in writing.
 The Scrutinizers appointed for the poll,
shall submit a report to the Chairman of the
meeting in Form No. MGT-13 and the
report shall be signed by the scrutinizer
and, in case there is more than one
scrutinizer by all the scrutinizer, and the
same shall be submitted by them to the
Chairman of the meeting within seven days
from the date the poll is taken.
Procedure to be followed for conducting
business through postal ballot:
 Where a company is required or decides to
pass any resolution by way of postal ballot,
it shall send the notice to all the
shareholders along with a draft resolution
explaining the reasons thereof and
requesting them to give their assent or
dissent in writing on a postal ballot because
postal ballot means voting by post or
through electronic means within a period of
thirty days from the date of dispatch of
notice.
 The notice shall be sent either (a) by a
Registered Post or Speed Post, or (b)
through electronic means like registered e-
mail id or (c) through courier service for
facilitating of the communication of the
assent or dissent of the shareholder to the
resolution within the said period of thirty
days.
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 An advertisement shall be published at least
once in a vernacular newspaper in the
principal vernacular language of the district
in which the registered office of the
company is situated and having a wide
circulation in that district, and at least once
in a English language in an English
newspaper having a wide circulation in that
district, about having dispatched the ballot
papers and specifying therein the following
matters, namely:
i. A statement that the matter is to be
transacted through postal ballot
which includes voting by electronic
means,
ii. The date of completion of dispatch
of notices,
iii. The date of commencement of
voting,
iv. The date of end of voting,
v. Statement that any postal ballot
received after such date will not be
valid (either by post or electronic
means),
vi. Statement if any member have not
received the postal ballot can apply
for duplicate one,
vii. Contact details of the person
responsible to address the
grievances.
 The notice of the postal ballot shall also be
placed on the website of the company
forthwith after the notice is sent to the
members and such notice shall remain on
the website till the last date of the receipt of
the postal ballots from the members;
 The board of directors shall appoint one
scrutinizer who in the opinion of the
directors can conduct the process in fair and
transparent manner;
 If a resolution is assented by the requisite
majority of shareholders, it shall be deemed
to have been duly passed at a general
meeting convened in that behalf;
 Postal ballot received back from the
shareholders shall be kept in the safe
custody of the scrutinizer;
 The scrutinizer shall submit his report as
soon as possible after the last date of receipt
of postal ballot but not later than seven
days,
 The scrutinizer shall maintain a register
either manually or in electronic mode to
record the assent or dissent of the members
mentioning the name, address, folio
number or client ID of the shareholder,
number of shares held by them, nominal
value of such shares, whether shares have
differential voting rights, etc.
 The result along with scrutinizer report
shall be declared on the website of the
company;
 The resolution shall be deemed to be passed
on the date of the meeting convened in that
behalf;
 The provisions of Rule 20 shall be applied
mutatis mutandis to this rule in respect of
voting by electronic means.
 Pursuant to section 110(1)(a), the following
items of business shall be transacted by
means of voting through postal ballot-
i. Alteration of the object clause in the
memorandum,
ii. Change in place of the registered
office outside the local limits of any
city, town or village as specified u/s
12(5),
iii. Alteration of articles of association
as per section 68(2),
iv. Change in the objects for which a
company has raised money from the
public through prospectus and still
has unutilized amount out of the
money so raised u/s 13(8),
v. Issue of shares with differential
rights as to voting or dividend or
otherwise u/s 43(a)(ii),
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vi. Variation in the rights attached to a
class of shares or debentures or
other securities as specified u/s 48,
vii. Buy back of shares by a company
u/s 68(1),
viii. Election of a director u/s 151 of the
Act,
ix. Sale of the whole or substantially
the whole of an undertaking of a
company as specified u/s 180(1)(a),
x. Giving loans or extending
guarantee or providing security in
excess of the limit specified u/s
186(3),
Provided that One Person Company and
other companies having members up to two
hundred are not required to transact any
business through postal ballot.
Special Notice:
 A special notice given to the company shall
be signed individually or collectively by
such number of members holding not less
than one percent of total voting power or
holding shares on which an aggregate sum
of not less than five lakh rupees has been
paid up on the date of the notice.
 Notice shall be sent to the company not
earlier than three months but at least
fourteen days before the date of the meeting
at which the resolution is to be moved
exclusive of the day on which the notice is
given and the day of the meeting.
 the company shall immediately after
receiving the notice, give its members
notice of the resolution at least seven days
before the meeting, exclusive of the day of
dispatch of notice and day of the meeting,
in the same manner as it gives notice of any
general meeting.
 Where it is impracticable to send the notice
, in the same manner as it gives notice of
any general meeting, the notice shall be
published in English language in English
 newspaper and in vernacular language in a
vernacular newspaper, both having wide
circulation in the State in which the
registered office of the company is situated
and such notice shall also be published on
the website of the company, if any, of the
company.
 The notice shall be published at least seven
days before the meeting, exclusive of the
day of publication of the notice and day of
the meeting.
Resolutions and agreements to be filed:
 A copy of every resolution or any
agreement required to be filed, together
with the explanatory statement u/s 102, if
any, shall be filed with the Registrar in
Form No. MGT-14 along with the fee.
Minutes of the proceedings of general
meeting, meeting of the Board of Directors
and other meetings and resolutions passed
by postal ballot:
 (a) a distinct minute book shall be
maintained foe each type of the meeting
namely-
(i) General meeting of the
members,
(ii) Meeting of the creditors,
(iii) Meeting of the Board,
(iv) Meeting of each of the
committees of the Board
Explanation- For the purpose of this
sub-rule, resolutions passed by postal
ballot shall be recorded in the minute
book of general meetings as if it has
been deemed passed in the general
meeting.
(b)(i) The minutes of the proceedings
of each meeting shall be entered in the
books maintained or that purpose
along with the date of such entry
within thirty days of the conclusion of
the meeting.
33 | P a g e
(ii) In case of every resolution passed
by postal ballot, a brief report shall be
entered in the minute book of general
meetings along with the date of such
entry within thirty days from the date
of passing of resolution.
(c) Each page of every such book shall
be initialled or signed and the last page
of the record of the proceedings of each
of the meetings or each report in such
book shall be dated and signed.
(d) The minute book of the general
meeting shall be kept at the registered
office of the company and shall be
preserved permanently and kept in the
custody of the company secretary or
any director duly authorised by the
board or at such other place as may be
approved by the Board.
(e) The minute book of the Board and
committee meetings shall be preserved
permanently and kept in the custody of
the company secretary of the company
or any director duly authorised by the
board or at such other place as may be
approved by the Board.
Copy of the minute book of general meeting
 Any member shall be entitled to be
furnished, within seven working days after
he has made a request in that behalf to the
company, with a copy of any minute of
general meeting, on payment of such sum
as may be specified in the article of
association of the company, but not
exceeding a sum of ten rupees for each page
or part of any page:
Provided that a member who has made
a request for provision of soft copy in
respect of the minutes of any previous
general meeting held during a period
immediately preceding three financial
years shall be entitled to be furnished,
with the same free of cost.

Maintenance and inspection of document in
electronic form:
 Every listed company or a company having
not less than one thousand shareholders,
debenture holders and other security
holders, shall maintain its records, as
required to be maintained under the Act or
rules made there under, in electronic form.
Explanation: for the purpose of this sub-
rule, it is hereby clarified that in the case of
existing companies, if they have the data in
physical form that have to be converted in
electronic form within six months from the
date of notification of provisions of section
120 of the Act.
 The records in electronic form shall be
maintained in such manner as the Board of
Directors of the company may think fit,
Provided that-
(a) The records are maintained in the same
formats or in accordance with all other
requirements as provided in the Act or
rules made there under;
(b) The information is required under the
provisions of the Act or the rules made
there under should be adequately
recorded for future reference;
(c) The records must be capable of being
readable, retrievable and reproducible
in printed form;
(d) The records are capable of being dated
and signed digitally wherever it is
required under the provisions of the Act
or rules made there under;
(e) The records once dated and signed
digitally, shall not be capable of being
edited or altered;
(f) The records shall be capable of being
updated, according to the provisions of
the Act or the rules made there under,
and the date of updating shall be
capable of being recorded on every
updating.
34 | P a g e
Explanation: For the purpose of this
rule, the term records means any
register, index, agreement,
memorandum, minutes or any other
document required by the Act or the
rules made there under to be kept by the
company.
Security of records maintained in electronic
form:
 The Managing Director, Company
Secretary or any other director or officer of
the company as the Board may decide shall
be responsible for the maintenance and
security of electronic records.
 The person who is responsible for the
maintenance and security of the electronic
records shall-
a) Provide adequate protection against
unauthorized access, alteration or
tampering of records;
b) ensure against loss of the records as a
result of damage to, or failure of the
media on which the records are
maintained;
c) Ensure that the signatory of electronic
records does not repudiate the signed
record as not genuine;
d) Ensure that the computer systems,
software and hardware are adequately
secured and validated to ensure their
accuracy, reliability and consistent
intended performance;
e) Ensure that computer systems can
discern invalid and altered records;
f) Ensure that records are accurate,
accessible and capable of being
reproduced for reference later;
g) Ensure that the records are at all times
capable of being retrieved to a readable
and printable form;
h) Ensure that the records are kept in non-
rewritable and non-erasable format like
 pdf Version or some other version
which cannot be tampered or altered;
i) Ensure that at least one back up, taken
at a periodicity of not exceeding one
day, are kept of the updated records
kept in electronic form, every backup is
authenticated and dated and such
backups shall be securely kept at such
places as may be decided by the Board;
j) Limit the access to the records to the
managing director, company secretary,
or any other director or officer or
persons performing work of the
company as may be authorized by the
Board in this behalf;
k) Ensure that any reproduction of non-
electronic original records in electronic
form is complete, authentic, true and
legible when retrieved;
l) Arrange and index the records in a way
that permits easy location, access and
retrieval of any particular record;
m) Take necessary steps to ensure security,
integrity and confidentiality of records.
Inspection and copies of records maintained
in electronic form:
 Where a company maintains its record in
electronic form, any duty imposed by the
Act or rules made there under to make those
records available for inspection or to
provide copies of the whole or a part of
those records, shall be construed as a duty
to make the records available for inspection
in electronic form or to provide copies of
those records containing a clear
reproduction of the whole or part thereof,
as the case may be on payment of not
exceeding ten rupees per page.
Penalty:
 If any default is made in compliance with
any of the provisions of this rule, the
company and every officers or such other
35 | P a g e
person who is in default shall be punishable
with fine which may extend to five
thousand rupees and where the
contravention is a continuing one, with a
further fine which may extend to five
hundred rupees for every day after the first
day during which such contravention
continues.
Report on Annual General Meeting:
 The repost in pursuance of the provisions of
section 121(1) shall be prepared in the
following manner namely:-
(a) The report under this section shall
be prepared in addition to the
minutes of the general meeting;
(b) The report shall be signed and dated
by the Chairman of the meeting or
in case of his inability to sign, by
any two directors of the company,
one of whom shall be the Managing
Director, if there is one and
company secretary of the company;
(c) The report shall contain the details
in respect of the following namely:-
(i) The day, date, hour and
venue of the annual general
meeting;
(ii) Confirmation with respect
to appointment of Chairman
of the meeting;
(iii) Number of members
attending the meeting;
(iv) Confirmation of quorum;
(v) Confirmation with respect
to compliance of the Act,
Rules, Secretarial Standards
made there under with
respect to calling,
convening and conducting
the meeting;
(vi) Business transacted at the
meeting and result thereof;
 (vii) Particulars with respect to company for a buy-back from odd lots is no
any adjournment, longer available [Section-68].
postponement of meeting,
change in venue; and The 2013 Act provides flexibility in
(viii) Any other points management and administration by
relevant for inclusion in the recognising the electronic mode for notices
report. and voting, which is in line with the MCA’s
(d) The report shall contain fair and efforts to give cognisance to use of
correct summary of the proceedings electronic media as evident from a number
of the meeting. of green initiatives’ introduced recently,
 The copy of the report prepared in maintenance of registers and returns at a
pursuance of section 121(1) and sub rule place other than the registered office.
(1), shall be filed with the Registrar in
Form No. MGT-15 within thirty days of BIBLIOGRAPHY
the conclusion of the annual general Books:
meeting along with the fee.
1) Companies Act, 2013 and Rules & Forms
CONCLUSION - Corporate
 Introduces a new type of entity to the
existing list- One Person Company. Professionals
 Specifies the mandatory content for the 2) Company Law Ready Reckoner
memorandum of association. - Taxmann
 Introduces the entrenchment provisions in 3) Companies Act, 2013
respect of articles of association of a - Corporate
company.
 Mandates inclusion of declaration to the Professionals
effect that all the provisions have been 4) Companies Act, 2013
complied with. - ICSI Publication
 New objects like environment protection, 5) Bare Act
education, research, social welfare etc.,
have been added to the existing object for Website
which a charitable company could be
incorporated.
 Prohibits subsidiary company to hold 1) www.icsi.edu
shares in its holding company continue as 2) www.caclubindia.com
per new act.
 Companies would no longer issue shares at
discount. Exception- sweat equity shares
wherein shares are issued to employees in
lieu of their services.
 The existing provision of section 77A of
the Companies Act, 1956 has
acknowledged by the 2013 Act. The only
difference is that the option available to the

36 | P a g e