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 CHAPTER II 

INCORPORATION OF COMPANY AND MATTERS INCIDENTAL THERETO

 

 

 

 
 

3.Formation of company.

 
(1) A company may be formed for any lawful purpose by—
(a) seven or more persons, where the company to be formed is to be a public
company;
(b) two or more persons, where the company to be formed is to be a private
company; or
(c) one person, where the company to be formed is to be One Person Company
that is to say, a private company,
by subscribing their names or his name to a memorandum and complying with the requirements
of this Act in respect of registration:
Provided that the memorandum of One Person Company shall indicate the name of the
other person, with his prior written consent in the prescribed form, who shall, in the event of
the subscriber’s death or his incapacity to contract become the member of the company and
the written consent of such person shall also be filed with the Registrar at the time of
incorporation of the One Person Company along with its memorandum and articles:
Provided further that such other person may withdraw his consent in such manner as
may be prescribed:
Provided also that the member of One Person Company may at any time change the
name of such other person by giving notice in such manner as may be prescribed:
Provided also that it shall be the duty of the member of One Person Company to
intimate the company the change, if any, in the name of the other person nominated by him
by indicating in the memorandum or otherwise within such time and in such manner as may
be prescribed, and the company shall intimate the Registrar any such change within such
time and in such manner as may be prescribed:
Provided also that any such change in the name of the person shall not be deemed to
be an alteration of the memorandum.
(2) A company formed under sub-section (1) may be either—
(a) a company limited by shares; or
(b) a company limited by guarantee; or
(c) an unlimited company.
 
4.Memorandum.
 
(1) The memorandum of a company shall state—
(a) the name of the company with the last word “Limited” in the case of a public
limited company, or the last words “Private Limited” in the case of a private limited
company:
Provided that nothing in this clause shall apply to a company registered under
section 8;
(b) the State in which the registered office of the company is to be situated;
(c) the objects for which the company is proposed to be incorporated and any
matter considered necessary in furtherance thereof;
(d) the liability of members of the company, whether limited or unlimited, and
also state,—
(i) in the case of a company limited by shares, that liability of its members
is limited to the amount unpaid, if any, on the shares held by them; and
(ii) in the case of a company limited by guarantee, the amount up to which
each member undertakes to contribute—
(A) to the assets of the company in the event of its being wound-up
while he is a member or within one year after he ceases to be a member, for
payment of the debts and liabilities of the company or of such debts and
liabilities as may have been contracted before he ceases to be a member,
as the case may be; and
(B) to the costs, charges and expenses of winding-up and for
adjustment of the rights of the contributories among themselves;
(e) in the case of a company having a share capital,—
(i) the amount of share capital with which the company is to be registered
and the division thereof into shares of a fixed amount and the number of shares
which the subscribers to the memorandum agree to subscribe which shall not be
less than one share; and
(ii) the number of shares each subscriber to the memorandum intends to
take, indicated opposite his name;
(f) in the case of One Person Company, the name of the person who, in the event
of death of the subscriber, shall become the member of the company.
(2) The name stated in the memorandum shall not—
(a) be identical with or resemble too nearly to the name of an existing company
registered under this Act or any previous company law; or
(b) be such that its use by the company—
(i) will constitute an offence under any law for the time being in force; or
(ii) is undesirable in the opinion of the Central Government.
(3) Without prejudice to the provisions of sub-section (2), a company shall not be
registered with a name which contains—
(a) any word or expression which is likely to give the impression that the company
is in any way connected with, or having the patronage of, the Central Government, any
State Government, or any local authority, corporation or body constituted by the Central
Government or any State Government under any law for the time being in force; or
(b) such word or expression, as may be prescribed,
unless the previous approval of the Central Government has been obtained for the use of
any such word or expression.
(4) A person may make an application, in such form and manner and accompanied by
such fee, as may be prescribed, to the Registrar for the reservation of a name set out in the
application as—
(a) the name of the proposed company; or
(b) the name to which the company proposes to change its name.
(5) (i) Upon receipt of an application under sub-section (4), the Registrar may, on the
basis of information and documents furnished along with the application, reserve the name
for a period of sixty days from the date of the application.
(ii) Where after reservation of name under clause (i), it is found that name was applied
by furnishing wrong or incorrect information, then,—
(a) if the company has not been incorporated, the reserved name shall be cancelled
and the person making application under sub-section (4) shall be liable to a penalty
which may extend to one lakh rupees;
(b) if the company has been incorporated, the Registrar may, after giving the
company an opportunity of being heard—
(i) either direct the company to change its name within a period of three
months, after passing an ordinary resolution;
(ii) take action for striking off the name of the company from the register of
companies; or
(iii) make a petition for winding up of the company.
(6) The memorandum of a company shall be in respective forms specified in Tables A,
B, C, D and E in Schedule I as may be applicable to such company.
(7) Any provision in the memorandum or articles, in the case of a company limited by
guarantee and not having a share capital, purporting to give any person a right to participate
in the divisible profits of the company otherwise than as a member, shall be void.
 
 
 

5.Articles.

 
(1) The articles of a company shall contain the regulations for management of the
company.
(2) The articles shall also contain such matters, as may be prescribed:
Provided that nothing prescribed in this sub-section shall be deemed to prevent a
company from including such additional matters in its articles as may be considered necessary
for its management.
(3) The articles may contain provisions for entrenchment to the effect that specified
provisions of the articles may be altered only if conditions or procedures as that are more
restrictive than those applicable in the case of a special resolution, are met or complied with.
(4) The provisions for entrenchment referred to in sub-section (3) shall only be made
either on formation of a company, or by an amendment in the articles agreed to by all the
members of the company in the case of a private company and by a special resolution in the
case of a public company.
(5) Where the articles contain provisions for entrenchment, whether made on formation
or by amendment, the company shall give notice to the Registrar of such provisions in such
form and manner as may be prescribed.
(6) The articles of a company shall be in respective forms specified in Tables, F, G, H, I
and J in Schedule I as may be applicable to such company.
Articles.
(7) A company may adopt all or any of the regulations contained in the model articles
applicable to such company.
(8) In case of any company, which is registered after the commencement of this Act, in
so far as the registered articles of such company do not exclude or modify the regulations
contained in the model articles applicable to such company, those regulations shall, so far as
applicable, be the regulations of that company in the same manner and to the extent as if they
were contained in the duly registered articles of the company.
(9) Nothing in this section shall apply to the articles of a company registered under
any previous company law unless amended under this Act.
 
 
 

6. Save as otherwise expressly provided in this Act—

 
(a) the provisions of this Act shall have effect notwithstanding anything to the
contrary contained in the memorandum or articles of a company, or in any agreement
executed by it, or in any resolution passed by the company in general meeting or by its
Board of Directors, whether the same be registered, executed or passed, as the case
may be, before or after the commencement of this Act; and
(b) any provision contained in the memorandum, articles, agreement or resolution
shall, to the extent to which it is repugnant to the provisions of this Act, become or be
void, as the case may be.
 
 
7.Incorporation of company. 
 
(1) There shall be filed with the Registrar within whose jurisdiction the registered
office of a company is proposed to be situated, the following documents and information for
registration, namely:—
(a) the memorandum and articles of the company duly signed by all the
subscribers to the memorandum in such manner as may be prescribed;
(b) a declaration in the prescribed form by an advocate, a chartered accountant,
cost accountant or company secretary in practice, who is engaged in the formation of
the company, and by a person named in the articles as a director, manager or secretary
of the company, that all the requirements of this Act and the rules made thereunder in
respect of registration and matters precedent or incidental thereto have been complied
with;
(c) an affidavit from each of the subscribers to the memorandum and from persons
named as the first directors, if any, in the articles that he is not convicted of any offence
in connection with the promotion, formation or management of any company, or that
he has not been found guilty of any fraud or misfeasance or of any breach of duty to
any company under this Act or any previous company law during the preceding five
years and that all the documents filed with the Registrar for registration of the company
contain information that is correct and complete and true to the best of his knowledge
and belief;
(d) the address for correspondence till its registered office is established;
(e) the particulars of name, including surname or family name, residential address,
nationality and such other particulars of every subscriber to the memorandum along
with proof of identity, as may be prescribed, and in the case of a subscriber being a
body corporate, such particulars as may be prescribed;
(f) the particulars of the persons mentioned in the articles as the first directors of
the company, their names, including surnames or family names, the Director
Identification Number, residential address, nationality and such other particulars
including proof of identity as may be prescribed; and
(g) the particulars of the interests of the persons mentioned in the articles as the
first directors of the company in other firms or bodies corporate along with their
consent to act as directors of the company in such form and manner as may be prescribed.
(2) The Registrar on the basis of documents and information filed under
sub-section (1) shall register all the documents and information referred to in that subsection
in the register and issue a certificate of incorporation in the prescribed form to the
effect that the proposed company is incorporated under this Act.
(3) On and from the date mentioned in the certificate of incorporation issued under
sub-section (2), the Registrar shall allot to the company a corporate identity number, which
shall be a distinct identity for the company and which shall also be included in the certificate.
(4) The company shall maintain and preserve at its registered office copies of all
documents and information as originally filed under sub-section (1) till its dissolution under
this Act.
(5) If any person furnishes any false or incorrect particulars of any information or
suppresses any material information, of which he is aware in any of the documents filed with
the Registrar in relation to the registration of a company, he shall be liable for action under
section 447.
(6) Without prejudice to the provisions of sub-section (5) where, at any time after the
incorporation of a company, it is proved that the company has been got incorporated by
furnishing any false or incorrect information or representation or by suppressing any material
fact or information in any of the documents or declaration filed or made for incorporating
such company, or by any fraudulent action, the promoters, the persons named as the first
directors of the company and the persons making declaration under clause (b) of subsection
(1) shall each be liable for action under section 447.
(7) Without prejudice to the provisions of sub-section (6), where a company has been
got incorporated by furnishing any false or incorrect information or representation or by
suppressing any material fact or information in any of the documents or declaration filed or
made for incorporating such company or by any fraudulent action, the Tribunal may, on an
application made to it, on being satisfied that the situation so warrants,—
(a) pass such orders, as it may think fit, for regulation of the management of the
company including changes, if any, in its memorandum and articles, in public interest
or in the interest of the company and its members and creditors; or
(b) direct that liability of the members shall be unlimited; or
(c) direct removal of the name of the company from the register of companies; or
(d) pass an order for the winding up of the company; or
(e) pass such other orders as it may deem fit:
Provided that before making any order under this sub-section,—
(i) the company shall be given a reasonable opportunity of being heard in
the matter; and
(ii) the Tribunal shall take into consideration the transactions entered into
by the company, including the obligations, if any, contracted or payment of any
liability.
 
 
 

8.Formation of companies with charitable objects, etc.

 
(1) Where it is proved to the satisfaction of the Central Government that a person or
an association of persons proposed to be registered under this Act as a limited company—
(a) has in its objects the promotion of commerce, art, science, sports, education,
research, social welfare, religion, charity, protection of environment or any 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,
the Central Government may, by licence issued in such manner as may be prescribed, and on
such conditions as it deems fit, 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 as the case may be, the words “Private Limited” , and thereupon the Registrar shall, on
application, in the prescribed form, register such person or association of persons as a
company under this section.
(2) The company registered under this section shall enjoy all the privileges and be
subject to all the obligations of limited companies.
(3) A firm may be a member of the company registered under this section.
(4) (i) A company registered under this section shall not alter the provisions of its
memorandum or articles except with the previous approval of the Central Government.
(ii) A company registered under this section may convert itself into company of any
other kind only after complying with such conditions as may be prescribed.
(5) Where it is proved to the satisfaction of the Central Government that a limited
company registered under this Act or under any previous company law has been formed
with any of the objects specified in clause (a) of sub-section (1) and with the restrictions and prohibitions as mentioned respectively in clauses (b) and (c) of that sub-section, it may, by licence, allow the company to be registered under this section subject to such conditions as the Central Government deems fit and to change its name by omitting the word “Limited”, or as the case may be, the words “Private Limited” from its name and thereupon the Registrar shall, on application, in the prescribed form, register such company under this section and all the provisions of this section shall apply to that company.
(6) The Central Government may, by order, revoke the licence granted to a company
registered under this section if the company contravenes any of the requirements of this
section or any of the conditions subject to which a licence is issued or the affairs of the
company are conducted fraudulently or in a manner violative of the objects of the company or prejudicial to public interest, and without prejudice to any other action against the company under this Act, direct the company to convert its status and change its name to add the word “Limited” or the words “Private Limited”, as the case may be, to its name and thereupon the Registrar shall, without prejudice to any action that may be taken under sub-section (7), on application, in the prescribed form, register the company accordingly:
Provided that no such order shall be made unless the company is given a reasonable
opportunity of being heard:
Provided further that a copy of every such order shall be given to the Registrar.
(7) Where a licence is revoked under sub-section (6), the Central Government may, by
order, if it is satisfied that it is essential in the public interest, direct that the company be
wound up under this Act or amalgamated with another company registered under this section:
Provided that no such order shall be made unless the company is given a reasonable
opportunity of being heard.
(8) Where a licence is revoked under sub-section (6) and where the Central Government
is satisfied that it is essential in the public interest that the company registered under this
section should be amalgamated with another company registered under this section and
having similar objects, then, notwithstanding anything to the contrary contained in this Act,
the Central Government may, by order, provide for such amalgamation to form a single
company with such constitution, properties, powers, rights, interest, authorities and privileges
and with such liabilities, duties and obligations as may be specified in the order.
(9) If on the winding up or dissolution of a company registered under this section,
there remains, after the satisfaction of its debts and liabilities, any asset, they may be transferred
to another company registered under this section and having similar objects, subject to such
conditions as the Tribunal may impose, or may be sold and proceeds thereof credited to the
Rehabilitation and Insolvency Fund formed under section 269.
(10) A company registered under this section shall amalgamate only with another
company registered under this section and having similar objects.
(11) If a company makes any default in complying with any of the requirements laid
down in this section, the company shall, without prejudice to any other action under the
provisions of this section, be punishable with fine which shall not be less than ten lakh
rupees but which may extend to one crore rupees and the directors and every officer of the
company who is in default shall be punishable with imprisonment for a term which may
extend to three years or with fine which shall not be less than twenty-five thousand rupees
but which may extend to twenty-five lakh rupees, or with both:
Provided that when it is proved that the affairs of the company were conducted
fraudulently, every officer in default shall be liable for action under section 447.
 
 
9.Effect of registration.
 
From the date of incorporation mentioned in the certificate of incorporation, such
subscribers to the memorandum and all other persons, as may, from time to time, become
members of the company, shall be a body corporate by the name contained in the
memorandum, capable of exercising all the functions of an incorporated company under this
Act and having perpetual succession and a common seal with power to acquire, hold and
dispose of property, both movable and immovable, tangible and intangible, to contract and
to sue and be sued, by the said name.
 
 
 

10.Effect of memorandum and articles.

 
(1) Subject to the provisions of this Act, the memorandum and articles shall, when
registered, bind the company and the members thereof to the same extent as if they respectively
had been signed by the company and by each member, and contained covenants on its and
his part to observe all the provisions of the memorandum and of the articles.
(2) All monies payable by any member to the company under the memorandum or
articles shall be a debt due from him to the company.
 
 

11.Commencement of business, etc..

 
(1) A company having a share capital shall not commence any business or exercise
any borrowing powers unless—
(a) a declaration is filed by a director in such form and verified in such manner as
may be prescribed, with the Registrar that every subscriber to the memorandum has
paid the value of the shares agreed to be taken by him and the paid-up share capital of
the company is not less than five lakh rupees in case of a public company and not less
than one lakh rupees in case of a private company on the date of making of this
declaration; and
(b) the company has filed with the Registrar a verification of its registered office
as provided in sub-section (2) of section 12.
(2) If any default is made in complying with the requirements of this section, the
company shall be liable to a penalty which may extend to five thousand rupees and every
officer who is in default shall be punishable with fine which may extend to one thousand
rupees for every day during which the default continues.
(3) Where no declaration has been filed with the Registrar under clause (a) of subsection
(1) within a period of one hundred and eighty days of the date of incorporation of the
company and the Registrar has reasonable cause to believe that the company is not carrying
on any business or operations, he may, without prejudice to the provisions of sub-section
(2), initiate action for the removal of the name of the company from the register of companies
under Chapter XVIII.
 
 
 

12.Registered office of company.

 
(1) A company shall, on and from the fifteenth day of its incorporation and at all
times thereafter, have a registered office capable of receiving and acknowledging all
communications and notices as may be addressed to it.
(2) The company shall furnish to the Registrar verification of its registered office
within a period of thirty days of its incorporation in such manner as may be prescribed.
(3) Every company shall—
(a) paint or affix its name, and the address of its registered office, and keep the
same painted or affixed, on the outside of every office or place in which its business is
carried on, in a conspicuous position, in legible letters, and if the characters employed
therefor are not those of the language or of one of the languages in general use in that
locality, also in the characters of that language or of one of those languages;
(b) have its name engraved in legible characters on its seal;
(c) get its name, address of its registered office and the Corporate Identity
Number along with telephone number, fax number, if any, e-mail and website addresses,
if any, printed in all its business letters, billheads, letter papers and in all its notices and
other official publications; and
(d) have its name printed on hundies, promissory notes, bills of exchange and
such other documents as may be prescribed:
Provided that where a company has changed its name or names during the last two
years, it shall paint or affix or print, as the case may be, along with its name, the former name
or names so changed during the last two years as required under clauses (a) and (c):
Provided further that the words ‘‘One Person Company’’ shall be mentioned in brackets
below the name of such company, wherever its name is printed, affixed or engraved.
(4) Notice of every change of the situation of the registered office, verified in the
manner prescribed, after the date of incorporation of the company, shall be given to the
Registrar within fifteen days of the change, who shall record the same.
(5) Except on the authority of a special resolution passed by a company, the registered
office of the company shall not be changed,—
(a) in the case of an existing company, outside the local limits of any city, town
or village where such office is situated at the commencement of this Act or where it
may be situated later by virtue of a special resolution passed by the company; and
(b) in the case of any other company, outside the local limits of any city, town or
village where such office is first situated or where it may be situated later by virtue of
a special resolution passed by the company:
Provided that no company shall change the place of its registered office from the
jurisdiction of one Registrar to the jurisdiction of another Registrar within the same State
unless such change is confirmed by the Regional Director on an application made in this
behalf by the company in the prescribed manner.
(6) The confirmation referred to in sub-section (5) shall be communicated within a
period of thirty days from the date of receipt of application by the Regional Director to the
company and the company shall file the confirmation with the Registrar within a period of
sixty days of the date of confirmation who shall register the same and certify the registration
within a period of thirty days from the date of filing of such confirmation.
(7) The certificate referred to in sub-section (6) shall be conclusive evidence that all
the requirements of this Act with respect to change of registered office in pursuance of subsection
(5) have been complied with and the change shall take effect from the date of the
certificate.
(8) If any default is made in complying with the requirements of this section, the
company and every officer who is in default shall be liable to a penalty of one thousand
rupees for every day during which the default continues but not exceeding one lakh rupees.
 
 
 

13.Alteration of memorandum.

 
(1) Save as provided in section 61, a company may, by a special resolution and
after complying with the procedure specified in this section, alter the provisions of its
memorandum.
(2) Any change in the name of a company shall be subject to the provisions of subsections
(2) and (3) of section 4 and shall not have effect except with the approval of the
Central Government in writing:
Provided that no such approval shall be necessary where the only change in the name
of the company is the deletion therefrom, or addition thereto, of the word “Private”, consequent
on the conversion of any one class of companies to another class in accordance with the
provisions of this Act.
(3) When any change in the name of a company is made under sub-section (2), the
Registrar shall enter the new name in the register of companies in place of the old name and
issue a fresh certificate of incorporation with the new name and the change in the name shall
be complete and effective only on the issue of such a certificate.
(4) The alteration of the memorandum relating to the place of the registered office from
one State to another shall not have any effect unless it is approved by the Central Government
on an application in such form and manner as may be prescribed.
(5) The Central Government shall dispose of the application under sub-section (4)
within a period of sixty days and before passing its order may satisfy itself that the alteration
has the consent of the creditors, debenture-holders and other persons concerned with the
company or that the sufficient provision has been made by the company either for the due
discharge of all its debts and obligations or that adequate security has been provided for
such discharge.
(6) Save as provided in section 64, a company shall, in relation to any alteration of its
memorandum, file with the Registrar—
(a) the special resolution passed by the company under sub-section (1);
(b) the approval of the Central Government under sub-section (2), if the alteration
involves any change in the name of the company.
(7) Where an alteration of the memorandum results in the transfer of the registered
office of a company from one State to another, a certified copy of the order of the Central
Government approving the alteration shall be filed by the company with the Registrar of each
of the States within such time and in such manner as may be prescribed, who shall register
the same, and the Registrar of the State where the registered office is being shifted to, shall
issue a fresh certificate of incorporation indicating the alteration.
(8) A company, which has raised money from public through prospectus and still has
any unutilised amount out of the money so raised, shall not change its objects for which it
raised the money through prospectus unless a special resolution is passed by the company
and—
(i) the details, as may be prescribed, in respect of such resolution shall also be
published in the newspapers (one in English and one in vernacular language) which is
in circulation at the place where the registered office of the company is situated and
shall also be placed on the website of the company, if any, indicating therein the
justification for such change;
(ii) the dissenting shareholders shall be given an opportunity to exit by the
promoters and shareholders having control in accordance with regulations to be
specified by the Securities and Exchange Board.
(9) The Registrar shall register any alteration of the memorandum with respect to the
objects of the company and certify the registration within a period of thirty days from the
date of filing of the special resolution in accordance with clause (a) of sub-section (6) of this
section.
(10) No alteration made under this section shall have any effect until it has been
registered in accordance with the provisions of this section.
(11) Any alteration of the memorandum, in the case of a company limited by guarantee
and not having a share capital, purporting to give any person a right to participate in the
divisible profits of the company otherwise than as a member, shall be void.
 
 
 
 

14. Alteration of articles.

 
(1) Subject to the provisions of this Act and the conditions contained in its
memorandum, if any, a company may, by a special resolution, alter its articles including
alterations having the effect of conversion of—
(a) a private company into a public company; or
(b) a public company into a private company:
Provided that where a company being a private company alters its articles in such a
manner that they no longer include the restrictions and limitations which are required to be
included in the articles of a private company under this Act, the company shall, as from the
date of such alteration, cease to be a private company:
Provided further that any alteration having the effect of conversion of a public company
into a private company shall not take effect except with the approval of the Tribunal which
shall make such order as it may deem fit.
(2) Every alteration of the articles under this section and a copy of the order of the
Tribunal approving the alteration as per sub-section (1) shall be filed with the Registrar,
together with a printed copy of the altered articles, within a period of fifteen days in such
manner as may be prescribed, who shall register the same.
(3) Any alteration of the articles registered under sub-section (2) shall, subject to the
provisions of this Act, be valid as if it were originally in the articles.
 
 
 
 

15.Alteration of memorandum or articles to be noted in every copy.

 
(1) Every alteration made in the memorandum or articles of a company shall be
noted in every copy of the memorandum or articles, as the case may be.
(2) If a company makes any default in complying with the provisions of
sub-section (1), the company and every officer who is in default shall be liable to a penalty
of one thousand rupees for every copy of the memorandum or articles issued without such
alteration.
 
 
 
 

16.Rectificationof name ofcompany.

 
(1) If, through inadvertence or otherwise, a company on its first registration or on
its registration by a new name, is registered by a name which,—
(a) in the opinion of the Central Government, is identical with or too nearly
resembles the name by which a company in existence had been previously registered,
whether under this Act or any previous company law, it may direct the company to
change its name and the company shall change its name or new name, as the case may
be, within a period of three months from the issue of such direction, after adopting an
ordinary resolution for the purpose;
(b) on an application by a registered proprietor of a trade mark that the name is
identical with or too nearly resembles to a registered trade mark of such proprietor
under the Trade Marks Act, 1999, made to the Central Government within three years
of incorporation or registration or change of name of the company, whether under this
Act or any previous company law, in the opinion of the Central Government, is identical
with or too nearly resembles to an existing trade mark, it may direct the company to
change its name and the company shall change its name or new name, as the case may
be, within a period of six months from the issue of such direction, after adopting an
ordinary resolution for the purpose.
(2) Where a company changes its name or obtains a new name under sub-section (1),
it shall within a period of fifteen days from the date of such change, give notice of the change
to the Registrar along with the order of the Central Government, who shall carry out necessary
changes in the certificate of incorporation and the memorandum.
(3) If a company makes default in complying with any direction given under
sub-section (1), the company shall be punishable with fine of one thousand rupees for every
day during which the default continues and every officer who is in default shall be punishable
with fine which shall not be less than five thousand rupees but which may extend to one lakh
rupees.
 
 
 
 

17.Copies of memorandum, articles, etc., to be given to members.

 
(1) A company shall, on being so requested by a member, send to him within seven
days of the request and subject to the payment of such fees as may be prescribed, a copy of
each of the following documents, namely:—
(a) the memorandum;
(b) the articles; and
(c) every agreement and every resolution referred to in sub-section (1) of section
117, if and in so far as they have not been embodied in the memorandum or articles.
(2) If a company makes any default in complying with the provisions of this section,
the company and every officer of the company who is in default shall be liable for each
default, to a penalty of one thousand rupees for each day during which such default
continues or one lakh rupees, whichever is less.
 
 
 

18.Conversion of companies already registered. 

 
(1) A company of any class registered under this Act may convert itself as a
company of other class under this Act by alteration of memorandum and articles of the
company in accordance with the provisions of this Chapter.
(2) Where the conversion is required to be done under this section, the Registrar shall
on an application made by the company, after satisfying himself that the provisions of this
Chapter applicable for registration of companies have been complied with, close the former
registration of the company and after registering the documents referred to in sub-section
(1), issue a certificate of incorporation in the same manner as its first registration.
(3) The registration of a company under this section shall not affect any debts, liabilities,
obligations or contracts incurred or entered into, by or on behalf of the company before
conversion and such debts, liabilities, obligations and contracts may be enforced in the
manner as if such registration had not been done.
 
 
 
 

19.Service of documents.

 
(1) No company shall, either by itself or through its nominees, hold any shares in
its holding company and no holding company shall allot or transfer its shares to any of its
subsidiary companies and any such allotment or transfer of shares of a company to its
subsidiary company shall be void:
Provided that nothing in this sub-section shall apply to a case—
(a) where the subsidiary company holds such shares as the legal representative
of a deceased member of the holding company; or
(b) where the subsidiary company holds such shares as a trustee; or
(c) where the subsidiary company is a shareholder even before it became a
subsidiary company of the holding company:
Provided further that the subsidiary company referred to in the preceding proviso
shall have a right to vote at a meeting of the holding company only in respect of the shares
held by it as a legal representative or as a trustee, as referred to in clause (a) or clause (b) of
the said proviso.
(2) The reference in this section to the shares of a holding company which is a company
limited by guarantee or an unlimited company, not having a share capital, shall be construed
as a reference to the interest of its members, whatever be the form of interest.
 
 
 
20.Execution of bills of exchange, etc.
 
(1) A document may be served on a company or an officer thereof by sending it to
the company or the officer at the registered office of the company by registered post or by
speed post or by courier service or by leaving it at its registered office or by means of such
electronic or other mode as may be prescribed:
Provided that where securities are held with a depository, the records of the beneficial
ownership may be served by such depository on the company by means of electronic or
other mode.
(2) Save as provided in this Act or the rules made thereunder for filing of documents
with the Registrar in electronic mode, a document may be served on Registrar or any
member by sending it to him by post or by registered post or by speed post or by
courier or by delivering at his office or address, or by such electronic or other mode as
may be prescribed:
Provided that a member may request for delivery of any document through a particular
mode, for which he shall pay such fees as may be determined by the company in its annual
general meeting.
Explanation.—For the purposes of this section, the term ‘‘courier’’ means a person or
agency which delivers the document and provides proof of its delivery.
 
 
 
 

21.Authentication of documents, proceedings and contracts.

 
Save as otherwise provided in this Act,—
(a) a document or proceeding requiring authentication by a company; or
(b) contracts made by or on behalf of a company,
may be signed by any key managerial personnel or an officer of the company duly authorised
by the Board in this behalf.
 
 
 
 

22.Execution of bills of exchange, etc.

 
(1) A bill of exchange, hundi or promissory note shall be deemed to have been
made, accepted, drawn or endorsed on behalf of a company if made, accepted, drawn, or
endorsed in the name of, or on behalf of or on account of, the company by any person acting
under its authority, express or implied.
(2) A company may, by writing under its common seal, authorise any person, either
generally or in respect of any specified matters, as its attorney to execute other deeds on its
behalf in any place either in or outside India.
(3) A deed signed by such an attorney on behalf of the company and under his seal
shall bind the company and have the effect as if it were made under its common seal.
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