Training and Recruitment info - please reach 040- 4003 2244-47
+91 98 48 01 9915 | | Reach us

Notified Sections of Chapter II of the Companies Act, 2013 – At A Glance

April 2, 2014

The Companies Act, 2013 ("Act") comprises of 29 chapters, 470 sections with 7 schedules. The Ministry of Corporate Affairs has notified 283 Sections until 26th March, 2014. Let us have a glance at Notified Sections of Chapter II of the Companies Act, 2013

Section No. under Co’s Act, 2013

 Corresponding Section in Co’s Act, 1956


Brief Description of the Section under the new act



Formation of company 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 a One Person Company that is to say, a private company,
Provided that the MOA of OPC shall contain the name of the nominee and the member has a right to change the name of the nominee in the manner as may be prescribed.
On such change of name the member is required to intimate to the Company In such manner as may be prescribed.
Then the Company shall intimate the Registrar any such change within such time and in such manner as may be prescribed.
*** Provided that such Change of Name will not be deemed to be an alteration of the memorandum.



Memorandum 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.
Exception: Company registered under Section 8 of Companies Act 2013
(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 - no classification required for the object clause into Main objects, incidental/ancillary objects, other objects.
(d) the liability of members of the company,
(e) in the case of a company having a share capital,—
- The Amount of Capital and division into Shares of fixed amount.
- The name and number of Shares, the subscriber agrees to subscribe.
** Each Subscriber has to subscribe for at least one Share.
(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.
The name stated in the memorandum shall not—
- be identical with or resemble too nearly to the name of an existing company.
- Such use of name shall not constitute offence under any law or be undesirable in the opinion of Central Government.
Unless the previous approval of the Central Government has been obtained a Company cannot register 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 Government or  such word or expression, as may be prescribed.
A person may make an application for reservation of name or Change of name, in such form and manner and accompanied by such fee as may be prescribed.



Articles Articles may provide for more stringent or restrictive procedure than passing of special resolution for altering certain provisions of the AOA (Ex: a provision can be altered only if agreed to by all the members of the company in writing).
The company shall give notice to the Registrar, where the articles contain provisions for entrenchment, whether made on formation or by amendment



Act to override memorandum, articles, etc. 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.



Incorporation of Company Following documents and information must be filed with ROC for registration of Company:
(a) the memorandum and articles of the company duly signed by all the subscribers
(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 he has been found guilty of any fraud or misfeasance or of any breach of Duty  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 sub-section 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 sub-section (1) shall each be liable for action under section 447.



Formation of companies with charitable objects, etc. Comparative Statement:

Section 25 Section 8
Did not specifically provide for sports, education, research, social welfare and environment protection. Could be only by way of a public or private company. Specifically provides for all these words. Could be a Section 25 Company, a OPC or an Association of Persons (AOP).
Max. action that can be taken by Central Government (CG) was revocation of license and that too only for violation of any terms of the license. Action besides revocation can be direction for winding up of the Company or amalgamation with another company registered with same objects. Provides for additional grounds for revocation like affairs being conducted fraudulently or prejudicial to public interest.


What's new now?

  • Elaborated list of objects for the purpose of which the Company can be formed.
  • Any person or AOP can be registered under this Section as a Company.
  • Can amalgamate only with the Company registered under this Section.
  • Penalty:
  1. Company- Fine not less than 10 lakhs rupees and up to 1 Crore.
  2. For Officer in default: Imprisonment extended up to 3 years(or)

Fine 25000 rupees to 25 lac rupees



  • For Fraudulently conducted affairs penalty as per Section 447 of the Companies Act 2013.



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.



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.



Commencement of business, etc.
  • Before starting any business or borrow any money, every company having share capital, shall have to comply two requirements.
  • Firstly, A Director of company shall file a declaration with Registrar of companies, that:

(i) Every subscriber to the memorandum has paid the value of shares agreed to be taken by him,
(ii) The paid up capital of company is not less than one lakh in case of private company or five lakh in case of public company on date of declaration.

  • Any commencement of business or borrowing before complying above requirement, the company shall be liable five thousand rupees (one time) and every officer who is in default shall be punishable with fine up to rupees one thousand for every day during which the default continues.
  • If no declaration has filed within one hundred and eighty day of the date of incorporation, the registrar may initiate action for removal of name of company from register of companies.



Registered office of company.
  • The company shall have on and from fifteenth day of its incorporation and all time thereafter a registered office for all communication purpose.
  • The company shall furnish verification of its registered office within a period of thirty days of its incorporation. The term “verification” conveys its very specific meaning. This is not information from company about address, which was a case earlier. Under this law, the company shall file verification from independent professional of its address.
  • The company shall paint or affix its name and address on its registered office and on outside wall of every office and place of business in conspicuous position, in legible letters. In case characters employed for affixing the name are not in local language, then also in character of local language.
  • The company shall have its name engraved in legible character on its seal.
  • The company shall get its name, address of its registered office, Corporate Identity Number, telephone number, fax number (if any), e – mail address and website (if any) printed on all its business letters, billheads, letter papers, all its notices and other official publications.
  • The company shall also have its name printed on hundies, promissory notes, bill of exchange, and such other documents as may be prescribed.
  • Where the company has changed its name, it shall paint or affix present name and earlier name for next two years. In other words, when company has changed its name one or more time in last two years, all such name shall be painted or affixed same time.
  • In case of “One Person Company”, the words “One Person Company” shall be mentioned below the name of the company.
  • In case of change in registered a notice of change duly verified shall be given to Registrar within fifteen days of such change. The Registered Office of a company may be changed to any place outside the local limit of any city, town
  • or village after passing a special resolution by the company. The change in the place of Registered Office from the jurisdiction of one registrar to the jurisdiction of another registrar shall be approved by the Regional Director. The Regional Director shall communicate his decision within thirty days from the date of application and the company shall file the confirmation within a period of sixty days thereafter.



Alteration of memorandum. A Company can alter its memorandum by passing a special resolution, and after complying requirement of Section 13.

Change of Name:
Any change of name shall have effect only after approval of Central government in writing. This approval is not required in case of conversion of company from one class to another, like Public Company converting into One person Company.
In case of change in name, the registrar shall enter replace new name for old name in its register and shall issue a fresh Certificate of Incorporation. The change in name shall be effective only on issue of this fresh certificate of incorporation.

Alteration of Objects:
A Company, which has raised money from public and has a unutilised amount out of 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.
The prescribed details in respect of this special resolution shall be published in newspapers (one in English and another in local language) which are in circulation at place where registered office of the company is situated. These details shall also be placed on the Website of the company, if any. These details shall indicate the justification for such change in objects of the company.
All dissenting shareholders shall be given an opportunity to exit by the promoters and shareholders having control of the company. This opportunity shall be given in accordance with regulation specified by the Securities and Exchange Board of India (SEBI).

Registration of Alteration of Memorandum:
In relation to any alteration of its memorandum, company shall file with the Registrar –
The special resolution passed by the company,
The approval of Central Government, in case it requires so.
The Registrar shall register the alteration in case of change in object and certify the registration within thirty days. In case of Change of name and shifting of registered office from one state to another, fresh certificate of incorporation shall be issued. No alteration of memorandum shall take effect until it has been registered by the registered under this Section.

Limitation on Alteration of Memorandum:
In case of a company limited by guarantee and not having a share capital, any alteration of the memorandum proposing to give any non – member a right to participate in divisible profits of the company shall void.



Alteration of articles A company may alter its articles by a special resolution, subject to condition contained in its Memorandum. There is no special provision for alteration of articles to convert a private company into a public company or a public company into a private company.
Any conversion of a public company into a private company shall take effect only after approval of the Tribunal. Tribunal has power to make such order as it may consider fit.
Every alteration of article and copy of order of the Tribunal shall be filed within fifteen days with the Registrar along with printed copy of altered articles. Any alteration of the articles shall be valid as if it were originally in the articles.



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.



Rectification of name of company. If a company is registered by a name or has changed to a new name, which inadvertently or otherwise is a name which should not be permitted, will be asked to change its name.
In first case, the Central Government has opinion that the name is identical with or too nearly resembles the name by which an existing company has been registered. In this case Central government may direct the company to change its name. The company shall change its name by adopting an ordinary resolution within three months from issue of the direction.
In second case, an application by a registered proprietor of a trademark made that the name is identical with or too nearly resembles to a trademark registered in his name, within three years of incorporation or change of the name of the company. Where Central Government has opinion in favour of applicant, it may direct the company to change its name. The company shall change its name by adopting an ordinary resolution within six months from issue of the direction.The company shall within fifteen days from such change, give a notice of change in name to the Registrar along with a copy of order of the Central government.
For default under this section, 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.



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.



Conversion of companies already registered. Any company may convert itself as a company of other class by alteration of memorandum and articles of the company.
The company shall make an application for this purpose with the registrar. After satisfying himself, the registrar shall close the former registration of the company and issue a fresh certificate of incorporation as if it is a first registration.
This conversion shall not affect any debts, liabilities, obligations or contracts incurred or entered into by or on behalf of the company and shall remain enforceable as such.



Subsidiary company not to hold shares in its holding company. A Subsidiary Company cannot hold shares in its Holding Company. Any allotment and transfer of Shares by Holding Company to its Subsidiary shall be void.


  1. where the subsidiary company holds shares as a legal representative of a deceased member of the holding company
  2. where the subsidiary company holds such shares as a trustee
  3. where the subsidiary company is a shareholder even before it became a subsidiary company of the holding company

In respect of the above exceptions 1 & 2, the Subsidiary Company has a right to vote in the General Meetings of the Holding Company. In case the Company does not have Share Capital, interest of the members must be considered for the voting power.



Authentication of documents, proceedings and contracts. Earlier this provision was applicable only to authentication of documents and proceedings. The current provision also applies to authentication of contracts. Authority for authentication can also be given to KMP under authority of Board.


47 & 48

Execution of bills of exchange, etc. A bill of exchange, hundi or promissory note shall be binding upon the company if drawn by Authorized Person.


  • By CS P. Surya Prakash  gg 0 Comments   


    Leave a Reply

    Your email address will not be published. Required fields are marked *