Section 7 Incorporation of company – Companies Act 2013

Amended and updated notes on section 7 of Companies Act 2013. Detail discussion on provisions and rules related to incorporation of company.

Amended and updated notes on section 7 of Companies Act 2013. Detail discussion on provisions and rules related to incorporation of company.

Chapter II (Sections 322) of the Companies Act, 2013 (CA 2013) deals with the provisions related to incorporation of company and matters incidental thereto. Section 7 of CA 2013 provides for incorporation of company.

Recently, we have discussed in detail section 6 (Act to override memorandum, articles, etc.) of CA 2013. Today, we learn the provisions of section 7 of Companies Act 2013 read with the Companies (Incorporation) Rules, 2014.

Section 7 of the Companies Act, 2013 has been notified by the Ministry of Corporate Affairs (MCA) vide Notification No. S.O. 902(E) issued dated 27.03.2014. This notification was come into force from 1st April, 2014 i.e. the commencement date of section 7 is 1-4-2014.

Name of ActThe Companies Act 2013
Enacted byParliament of India
Administered byMinistry of Corporate Affairs (MCA)
Number of Chapters29
Number of Sections484 (470-43+57)
Number of Schedules7
You are reading:
Chapter No.II
Chapter NameIncorporation of Company and matters incidental thereto
Section No.7
Section NameIncorporation of Company
Monthly Updated EditionCompany Law PDF

Section 7 of Companies Act 2013: Incorporation of company

Section 7 shall come into force on 1st April, 2014 vide Notification No. S.O. 902(E) issued dated 27.03.2014 except sub-section (7) which enforced from 1st June, 2016 vide Notification No. S.O. 1934(E) dated 01.06.2016 except clause (c) and (d) which enforced on 15th December, 2016 vide Notification No. S.O. 3677(E) dated 07-12-2016.

Section 7(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[1];

(b) a declaration in the prescribed form[2] 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) a declaration from[3] 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[4], and in the case of a subscriber being a body corporate, such particulars as may be prescribed[4];

(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[5]; 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[5].

Section 7(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[6] form to the effect that the proposed company is incorporated under this Act.

Section 7(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.

Section 7(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.

Section 7(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.

Section 7(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.

Section 7(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.

Foot Note for Section 7

Foot Note-1: Read Rule 13 (Signing of memorandum and articles) of the Companies (Incorporation) Rules, 2014.

Foot Note-2: Prescribed form is Form No INC-8. Read Rule 14 (Declaration by professionals) of the Companies (Incorporation) Rules, 2014.

Foot Note-3: Substituted (for the words “an affidavit”) w.e.f. 27th July 2018 by the Companies (Amendment) Act, 2017. Form No INC-9 (Declaration from Subscribers and First Directors).

Foot Note-4: Read Rule 16 (1) for particulars of every subscriber to be filed with the Registrar at the time of incorporation. Read Rule 16(2) where the subscriber to the memorandum is a body corporate, then the following particulars shall be filed with the Registrar.

Foot Note-5: Form No INC-12 for particulars of first directors of the company and their consent to act as such. Read Rule-17 of the Companies (Incorporation) Rules, 2014.

Foot Note-6: A certificate of incorporation shall be issued in Form No INC-11. Read Rule 18 of of the Companies (Incorporation) Rules, 2014.


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