Explains about the steps that the promoters has to take before incorporating a company

2. MEANING
• UNDER SEC. 12 “ANY SEVEN OR MORE PERSONS (2 OR MORE IN THE CASE OF A PRIVATE
COMPANY) MAY FORM AN INCORPORATED COMPANY FOR A LAWFUL PURPOSE BY SUBSCRIBING
THEIR NAMES TO THE MEMORANDUM OF ASSOCIATION AND COMPLYING WITH THIS ACT IN
RESPECT OF REGISTRATION.”
• THE MEMBERS INCORPORATING SHOULD NOT BE AN INFANT, AN UNDISCHARGED BANKRUPT, A
LUNATIC, AN ALIEN ENEMYAND ANY PERSON DISQUALIFIED BY LAW.

3. Process Of Incorporation
A)Availability of the name
B)Revalidation of the name availability
C)Minimum paid-up capital
D)Documents to be filled with the Registrar
E) Certificate of Incorporation
F) Conclusiveness of the certificate of incorporation

4. Availability of the name
Sec 20 provides that a company cannot be registered by a name which in the opinion of the
central Government is undesirable. The name should not be identical or in resemblance with an
existing company.
Revalidation of Name Availability
The incorporators should incorporate the company within six months after the name is
proposed by the registrar. If the incorporators failed to incorporate, they need to revalidate
the proposed name for another six months.

5. Minimum Paid-up capital
The minimum paid-up capital should be 5 lakh in the case of public limited company and 1 lakh for a
private company.

6. DOCUMENTS TO BE FILLED UP BY THE PROMOTERS:
1.The Memorandum of Association
2.The Articles of Association
3. A statement of the Nominal Capital
4. A Notice of the address of the registered office of the company
5. A list of directors and their consent to act signed by each
6. An undertaking in writing signed by each director to take and
pay for his qualification shares
7.A declaration that all the requirements of the act have been
compiled with.
Note: In case of a private company 5 and 6 are not necessary.

7. Certificate of Incorporation
On registration, the registrar will issue a certificate of incorporation whereby he certifies that the
company is incorporated and in the case of a limited company, that the company is limited.
Conclusiveness of the certificate of Incorporation
The certificate of Incorporation is a conclusive evidence of
1. All the requirements of the act have been compiled with in respect of registration.
2. The company is duly registered.
3. That the company came into existence on the date mentioned in the certificate.