Steps for incorporation of company under part IX
Step 1
Hold a meeting of the partners to transact the following
business
o
Assent of majority of its members as are
present in person or where proxies are allowed, by proxy, at a general meeting
summoned for the purpose of registering the
firm under Part IX of the CompaniesAct, 1956. Since the liability
of the members of the firm is unlimited, when a firm desires to
register itself as a company under Part IX as a limited company,
the majority required to assent as aforesaid shall consist of not less than ¾
of the members as are present in person or where proxies are allowed, by proxy,
at a general meeting summoned for the purpose.
o
To authorize one or more partners to take all
steps necessary and to execute all papers, deeds, documents etc. pursuant to
registration of the firm as a
Company.
o
To execute a supplementary Partnership Deed to
align it with the requirements as under:
o
There must be at least 7 partners in the
partnership firm;
o
The firm may
be registered with the Registrar of Firms;
o
There must be a fixed capital divided into
units ;
o
There must be provision of converting a firm
into company.
o
There must be an agreement by the partners to
convert the partnership to a
company. This can be done by a contract in writing to this effect to which the
partner’s resolution for conversion can be attached as annexure.
o
Execute a settlement deed.
Step 2
APPLICATION FOR DIRECTOR’S IDENTIFICATION NUMBER AND DIGITAL
SIGNATURERS CERTIFICATE
o
Ministry of Company Affairs has made Director’s
Identification Number mandatory for each Director.Following details are required for
DIN: Name(s) , Father’s Name(s), Permanent Residential Address(s), Present
Residential Address(s), Occupation, Name of the Companies in
which the promoter is Director/Promoter, Date of Birth , E-mail IDs (Minimum 2
for private company).
o
Ministry of
Company affairs have initiated the process of E-filing of the Documents,
wherein the either of the Director needs to have Digital Signature Certificate.
For the matter of Convenience in submission of documents with Registrar of Companies and expediting the processing, it is advisable to obtain the
Digital Signature Certificate from prescribed authorities.
o
Following
documents are required for DIN/Digital Signature: Copy of Passport/ Voter
ID/Ration Card/Driving License/ PAN Card/Telephone Bill/Electricity Bill/Bank
Statement.
o
The
application is required to be signed by the promoter(s).
o
Normally the
process takes 5 to 7 working days after submitting the documents with DIN Cell.
Note: In case of a Private Limited Company at least two
Directors should be appointed.
Step 3
NAME APPROVAL
o
An application in Form No. 1A needs to be filed
with the Registrar of Companies (ROC) with following annexure(s)
stating the fact that the partnership firm proposed to be converted under part
IX of theCompanies Act. (Annexure
1).
o
Certified true copy of Partnership Deed .
o
Certified true copy of the latest balance sheet
of the partnership.
o
Certified true copy of the latest income tax assessment order/return.
o
Consent of all the partners stating that
they have agreed to register the partnership firm as a Company .
o
Certified True Copy of the resolution passed by the firm in this regard .
o
The application is required to be digitally
signed by one of the promoters.
o
The details to
be state in the said application are as follows :
1. Maximum Six alternative names for
the proposed company. (in order of preference)
2. Names , Father’s/ Husband’s Name, Permanent
Residential Addresses, Present Residential Address, Occupation, Name of the Companies in
which the Promoter is Director/Promoter , Date of Birth , DIN of the Promoters.
3. Authorised Capital of the
proposed Company.
4. Main objects of the proposed
company.
5. State of Registered Office
of Company
6. Copy of Trade Mark Application/Certificate
If name of proposed company based on a Trade Mark,
Note:
1.
1.
As per Indian Companies Act, 1956, a Private Company should
have a minimum Paid up Capital of Rupees One Lac.
2.
As per Indian Companies Act, 1956 there should be at least two
promoters in a Private Limited Company.
3.
The Registrar of Companies will ordinarily inform within a period
of seven days from the date of submission of the application whether any of the
names applied for is available.
4.
If the name is not made available, the
Registrar of Companies may reject the application and if it
happens, new names to be provided for approval.
Step 4
Registration of Company
o
On obtaining the approval of name , file the
following documents with the registrar of Companies within 60 days from the date of name
approval
o
Two sets of Memorandum and Articles of
Association of the Company. One set shall be duly stamped. A memorandum of
association and articles of association may be made for the company
which will be similar in all respects to a normal
Memorandum and Articles of Association except that it incorporate therein
terms of settlement deed.
o
After drafting The Memorandum and Articles of
Association is required to be stamped as per the Indian Stamp Act. (in
Delhi its Rs. 200/- on MOA & 0.15% of Authorized Capital on AOA).
o
Thereafter these documents are required to be
executed by the promoters in their own hand in the presence of professionals
after the date of Stamping of
Memorandum & Article of Association in duplicate stating their full name, father’s
name, residential address, occupation, number of shares subscribed for &
Signature etc.
o
However, if any director is foreigner and not
present in India after the date of Stamping of the Memorandum & Article of
Association, in that case, his signature should be attested in Indian Embassy
located in his home country.
o
Form No. 1 – This is a declaration to be
executed on a non-judicial stamp paper by one of thedirectors
of the proposed company or
other specified persons such as Chartered Accountants, Company Secretaries,
Advocates, etc. stating that all the requirements of the incorporation have
been complied with. (Annexure 2)
o
Form No. 18 – This is a form to be filed by one
of the directors of the company informing the ROC the
registered office of the proposed company. (Annexure 3).
o
Form No.: 32 – This is a form stating the fact
of appointment of the proposed directors on theboard of
directors from the date of
incorporation of the proposed company and is signed by one of the proposed
directors. (Annexure 4).
o
Power of Attorney signed by all the subscribers
of MOA authorizing one of the subscribers or any other person to act on their
behalf for the purpose of incorporation and accepting the certificate of
incorporation.
o
Form No. 37 along with Form No. 39 (Annexure 5
& 6).
o
Declaration by two partners verifying the
particulars set forth in the above mentioned documents.
o
Consent letters from Directors
o
Filing fees as may be applicable
o
Other information to be submitted:
i) A list showing the names, addresses and occupations of all
persons who on a day named in the list, not being more than 6 clear days before
the date of registration were members of the company, with the addition of the
shares or stock held by them respectively, distinguishing, in cases where the
shares are numbered, each share by its number.
ii) If the company is intended to be registered as a limited
company, a statement specifying the following particulars :-
a) the nominal share capital of the company and the number of
shares into which it
is divided or the amount of stock of which it consists
b) the number of shares taken and the amount paid of each
share
c) the name of the company, with the addition of the word
“Limited” or “Private Limited” as the case may be, as the last word / words, in
case the company is being registered with limited liability.
Step 5
On completion of the formalities, the registrar shall
register the Company under Part IX of the Act and issue a certificate of
incorporation.
Steps for Incorporation of a public limited company
First Five stages are almost same for incorporation of a
public limited company except there should be at least seven subscribers, three
directors and the minimum paid up capital are Rs. 5 lacs.
After completion of first three stages a private limited
company may commence its business but a public limited company is required to
obtain certificate for commencement of business from Registrar of Companies.
For obtaining the Certificate for commencement of its business, the Company is
required to submit following documents with Registrar of Companies:
o
Form 20 to be executed on a non-judicial stamp
paper (Annexure 5)
o
Statement in lieu of Prospectus
o
Affidavit from each directors stating that the
Company has not commenced its Business
o
Details of Preliminary expenses
o
Board Resolution for approval of preliminary
expenses.
o
Board resolution for appointment of first
Auditors
o
Consent letter from the Auditors for acting as
there Statutory Auditors.
Registrar of Companies thereafter shall process the documents
and if all the documents are in order then it will issue a Certificate for
commencement of Business.
Steps after incorporation of private company
Once the new company is formed, the takeover agreement would
be entered between the Partnership Firm and the newly incorporated company.
Convene a Board Meeting after giving notice to all the
directors of the newly incorporated company immediately after incorporation as
per section 286 of the Companies Act, 1956 to adopt the agreement entered into
by the company and the partner of the firm for the acquisition of business of
the firm.
In such a situation, the entire business of the firm along
with all its assets and liabilities is transferred to the company.
The company may issue shares or other securities to the Partner
of the firm.
Steps after incorporation of public company
Once the new company is formed, the takeover agreement would
be entered between the Partnership firm and the newly incorporated company.
Convene a Board Meeting after giving notice to all the directors
of the newly incorporated company immediately after incorporation as per
section 286 of the Companies Act, 1956 to adopt the agreement entered into by
the company.
In the above Board Meeting also fix up the date, time , place
and agenda for calling a General Meeting to pass a Special Resolution under
section 81(1A) of the Companies Act, 1956 giving powers to the Board of
Directors to issue and allot equity shares to Partners of the firm.
Effect of Registration under part IX
o
Vesting of
Property : All
property, movable as well as immovable belonging to or vested in the firm at
the time of registration shall, on such registration pass to and vest in the
company as incorporated under Part IX.
o
The Registration of a company under Part IX
shall not in any manner affect its rights or liabilities in respect of any debt
or obligation incurred or any contract entered into, by, to, with or on behalf
of the firm before registration.
o
All suits and other legal proceedings taken by
or against the company or any public officer or member thereof which where
pending at the time of registration may be continued in the same manner as if
registration had not taken place. However, no execution can be done against the
property or person of any individual member of the company on any decree or
order obtained in such suit or proceeding. If the property of the company is
inadequate to satisfy the decree or order, an order for winding up the company may
be obtained.
o
All provisions of any Indian law or other
instrument constituting or regulating the company shall apply to the registered
company in the same manner as if the company had been formed under the
Companies Act, 1956 and those conditions were required to be contained and were
contained in its Memorandum and Articles of Association.
o
As per section 383A of the Companies Act, if
the paid up capital of the Company is Rs. 500 lacs or more than the company is
required to appoint a full time Company Secretary.
o
As per section 269 of the Companies Act, 1956
if the paid up capital of the company is Rs. 500 Lacs or more than the Company
is required to appoint either Managing Director or Whole Time Director or
Manager.
o
Debts and liabilities are not automatically
transferred to the new company and therefore a novation agreement will have to
be entered into by the company with its debtors and creditors.
o
Obtain an indemnity from the company to the
partnership firm for all acts, deeds and things done after the registration
under Part IX and vice versa.
o
Comply with all the relevant provisions of the
Companies Act, 1956 i.e. call requisite meetings, register charges, comply with
section 58A if necessary, etc.
o
Stamp duty.
Conversion of firm to company is exempted from payment of stamp duty as there
is no change in the ownership and no transfer is involved.
ONCE
the new company is formed , dissolved the partnership firm and transfer all the
shares of the partners of the
partnership to the newly formed company already provided in AoA of the newly
incorporated company .
Convene
the board meeting after giving notice to all the directors of the newly
incorporated company immediately after incorporation as per sec 286 to adopt
the agreement entered into by the company and the partners of the firm for
facilitating the acquisition of business of partnership firm and also for
transfer of shares of the partners to the company in lieu of allotment of
shares of the said company by passing a Board resolution in the said meeting .
In
the above Board meeting also fix up the date , time , place , and agenda for
calling general meeting to pass a special resolution u/s 81 (1A) giving power
to Board of Director to issue and allot the equity shares to all the partners
of the partnership firm in full and final satisfaction of the of the
consideration of transfer of shares of all the partners of the partnership firm
to the newly incorporated company and also for acquiring the business of
partnership firm .
File
in electronic mode the agreements adopted at the Board meeting with the RoC
, e-FORM NO 62
Follow
the DIN , DSC , FILE THE NECESSARY FORM WITH THE RoC .
After
holding the genera meeting and passing the special resolution hold another
board meeting after giving notice to all directors of the company as per sec
286 and allot the equity shares to all the partners of the dissolved
partnership firm as mentioned in the special resolution by passing a Board
resolution .
File
return of allotment of share to the partners of the dissolved firm in e-FORM NO
2 within thirty days of allotment .
ALSO
KEEP IN MIND THAT THE RoC WILL CONTINUE TO REGISTER PARTNERSHIP FIRM UNDeR PART
IX OF THE COMPANIES ACT , AS JOINT STOCK COMPANIES PROVIDED THEY FULFILL THE
CONDITIONS PRESCRIBED UNDER THE SAID ACT .
THANKIG
YOU
BADRINATH
CHAVAN
7204511908
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