Naresh Goyal is a non-resident Indian businessman and founder Chairman of Jet Airways. He started operating Jet Airways in 1993 with initial seed money from Tail Winds incorporated, Isle of Man

1. Document and
Procedure for
Registration of
Company.

2. Issue certificate of incorporation.
Verification of documents by ROC.
Payment of fees and stamp duty
Filing of eForms with ROC
Drafting of MOA and AOA
Application for the name availability.
Search for the company name availability.
Application for Director Identification Number & Digital
Signature certificate.

3. Persons and directors.
• Number of person.
• Number of directors.
• Minimum and maximum directors at time of incorporation.
• Application for Director identification number(DIN) and digital
signature certificate.
• Form DIR 3
• DSC

4. Name availability.
• Name shall not be:
Identical or resemble to existing name
Offence or undesirable
• Names shall not be registered if:
Any word or expression which is likely to give impression that the
company is in any way connected with or having patronage of any
government authorities.
Name of super hero of the country; or similar to existing trade
mark; or third persons surname.

5. • No objection or proof of relation from person whose name is
used in the company name.
• Change of object of the company.
• Form INC 1: application with fees and 6 proposed name of
the company.
• ROC shall intimate within 14 days its availability.
• ROC may reserve this name for a period of 60 days.

6. Other documents..
• Form INC 7:
Incorporation request submit..
Preparation of MOA and AOA.
Power of attorney.
• Form INC 8:
Declaration of professionals.

7. Other documents..
• Form INC 9 : Promoters declaration
Not convicted or guilty for any offence relating to company
incorporation.
Information provided is true.
• Form INC 10: Particulars of subscribers
• Form INC 22: Registered office
• Form INC 11: Certificate of incorporation.

8. Effect of incorporation

9. Memorandum of Association.
• Meaning:
Memorandum is a document which sets out the constitution of
the company and is therefore the foundation on which the
structure of the company is based. It defines the scope of the
company's activites and its relation with the outside world.
• Purpose:
(i) Any shareholder before making investments in the company
should know the field in, or the purpose for which it is going
to be used and what risk he is taking.
(ii) Anyone dealing with the company will know without doubt
“permitting range of activites” of the company.

10. Forms of MOA.
Table Type of company
Table A Company limited by shares
Table B Company limited by guarantee not
having share capital
Table C Company limited by having share
capital
Table D Unlimited Company not having share
capital
Table E Unlimited Company having share
capital

11. Contents of MOA.
Name clause.
Situation clause.
Object clause.
Liability clause.
Capital clause.
Subscribers clause.

12. Name Clause
• This clause states the name of the company which is approved
by ROC.
• The MOA of a company shall state the name of the company
with the last word “limited” in case of public company and
“private limited” in case of private company.
• Sec 8 companies are not required to do so.

13. Situation clause
• It states the name of the State in which the registered office of
the company is to be situated.

14. Object clause
• It states the objects of which the company proposed to be
incorporated and any matter considered necessary in
furtherance thereof.

15. Liability clause
• It states the nature of liability that the members of the
company incur, whether the liability shall be limited by shares
or by guarantee or unlimited.

16. Capital clause
• It states the amount of capital with which the company is
proposed to be registered, the number and value of shares
into which the capital is to be divided.
• The number of shares that each subscriber intends to take ,
indicated opposite his name.
• For example:
• Authorized/ registered / nominal capital Rs. 500000
(50000 shares for RS10 each)
Issued capital Rs.200000
Unissued capital Rs.300000

17. Subscription clause
• The MOA at last contains a subscribers declaration that they
desire to be formed into a company and signed in the
presence of at least one witness.
• Declaration: “we, the several persons whose names and
address are subscribed herewith, desire to form into a
company in accordance with the memorandum of association
and, we also agree to take the number of shares in the capital
of the company mentioned against our respective names.”

18. Alteration to MOA
• MOA may be altered
By changing its name under section 13(2)
By altering in regards to the state in which the registered
office is to be situated. Sec 13(4) &(7)
By altering its objects sec 13(1) & (9)
By altering its share capital sec 61.

19. General Provisions for
alterations.
• According to sec 13(1):
- A company may, by a special resolution and after complying
with the procedure specified in this section, alter the
provisions of its moa. Thus alteration for name, object and
situation SR is required.
- Sec 13(6):
- A company shall, in relation to any alteration of its
memorandum file with the registrar-
- Special resolution
- Approval of the central govt, if alteration requires change of
name

20. Alteration of name clause in
MOA
• Passing Special resolution sec 13(1)
• Approval of Central Govt. Sec 13(2),
• Any change of the company shall not have an effect except
with the prior approval of the central govt in writing.
• Approval of the central govt is not necessary if the change
relates to the addition or deletion of the words ‘private’.
• Form INC 24
Rule 29 of companies incorporation
• The change of name shall not be allowed to companies that
have defaulted to present.

21. Rectification of name of the
company
• Powers of CG to order company to rectify
• u/s 16(1)(a):In opinion of CG is identical or similar to existing
company
-shall change its name within 3 month of such after passing ordinary
resolution
• Section 16(1)(b): in case of infringement of a registered trademark
• Case law: Atlas cycles ltd vs Atlas products pvt ltd.
-shall change its name within 3 month of such after passing ordinary
resolution
-Application of such of registration with offensive name to be made
within 3 years.
• Penalty on application of name by furnishing wrong or
incorrect information.

22. Publication of name.
• Painted or displayed.
• Details to be engraved.
• Where company has changed its name.

23. Can listed company change its
name?
• Crossed over a year from the last name changed.
• At least 50% of revenue for new activity.
• Display of such name change.

24. Situation clause.
• Levels of approvals and resolutions
Board
meeting
board
resolution
Meeting of
members
Special
resolution
Approval of
any authority
Regional
director

25. Within same
city village or
town
•NO alteration
in moa
•BR
•Form inc 22
with ROC
From one c/v/t
to another c/v/t
•NO alteration
in moa
•BR
•SR form MGT
14
•Form inc 22
with ROC
Jurisdiction of one
ROC to another
within same state.
•NO alteration
in moa
•BR
•SR form MGT
14
•Approval from
RD forminc 23
•Form inc 22
with ROC
From one state
to another
state.
•Yes alteration
in moa
•BR
•SR form MGT
14
•Approval from
CG form inc 23
•Advertisement
application
Form 26
•Form inc 22
with ROC
•.
Alteration to Situation clause.

26. • Can the State Government oppose shifting of the
registered office from one state to another
state?
• Can an employee have a right to object in case of
shifting of registered office from one state to
another?

27. Object clause
• Sec4(1)(c):all companies must state in their memorandum
• (i) the objects for which the company is proposed to be
incorporated and
• (ii) any matter considered necessary furtherance of such
objective.
• Importance and scope.

28. Doctrine of Ultra Vires
• Meaning: every activity of a company which is beyond the
ambit of MOA is ultra vires and hence beyond the powers of
company. Therefore such activity is void.
• Ultra vires types:
(i)Ultra vires the company
(ii)Ultra vires the directors.

29. Effects of Ultra vires.
• Void ab into.
- Company is not bound to these acts.
- Company cannot sue or be sued.
- Cannot be corrected by estoppel or ratification
• Injuction.
• Personal liability of directors
-Towards the company.
-Towards the third party.
• Company right to property acquired for UV acts.

30. Ashbury carriage co. vs Riche
• In this case, the objects of Ashbury company was to
manufacture railway coaches and wagons. The director of this
company contracted with Mr. Riche of Belgium to contract and
lay down railway tracks in Belgium.
• It was held that the directors in contracting to lay down
railway lines acted ultra vires the company. The general
body of the shareholders resolved that such an act on
the part of its directors was ultra vires the company and
therefore void and not legally binding on the company
and therefore not enforceable by law.

31. Exception to the object clause
• An act which is ultra vires the directors but intra vires the
AOA.
• An act which is ultra vires the Articles but intra vires the MOA.
Alteration to Object clause:
• Board resolution and special resolution.
• No requirement of approval of any authorities.
• Restrictions on change of object clause
• Publishing of resolution
• Exit of dissenting shareholder

32. Alteration to capital clause.
• Registration Fees
Power of limited companies to alter share capital
sec 61
• Increase its authorized share capital.
• Sub division of its shares into smaller amounts.
• Cancel shares which have not been taken or agreed to be
taken by person.
• Resolution of such alteration shall be filed with the
registrar within a period of 30 days.

33. Subscription Clause
Sr no. Name add
description
occupation of
subscribers.
No. of equity
shares.
Signature of
subscribers.
Sign of
witness with
name and
add.

34. Articles of Association.
• Meaning
• Requirements.
• AOA plays a subordinate role to MOA.
• Form of AOA.
Table Type of company
Table F Company limited by shares
Table G Company limited by guarantee having
share capital
Table H Company limited by Guarantee not
having share capital
Table I Unlimited Company having share
capital
Table J Unlimited Company not having share
capital

35. Content of AOA
• Rules and regulations
• Preliminary contracts
• Share capital
• Lien on members shares.
• Transfer and forfeiture of shares
• Alteration of capital
• General meetings, special meetings, votings etc.
• Directors their remunerations.
• Accounts and audit
• Winding up procedure.

36. Alterations to AOA
• Special resolution is passed and power to alter is subject to
MOA.
• Procedure for alteration of AOA
• Take or subscribe more shares.
-Resolution passed and within 30 days form 23 filed with ROC
• Conversion of public to private company.
-SR passed and within 3 months form no. 1 B filed with RD and
ROC

37. Limitations of AOA.
• The alteration must not exceed the powers
given by MOA.
• The alteration must not be inconsistent.
• The articles should not include anything that is
illegal.
• The articles should not constitute fraud on
minority by majority.

38. Distinguish between MOA &
AOA
Memorandum of Association Articles of Association
It is the primary document of the
company and acts like charter of
constitution of the company.
It is subordinate or supplementary to
the MOA
It is a document which states the aims
and objects of the company.
It states the rules and regulations
which are connected to the internal
management of the company.
Determines the relation between the
company and outsiders.
Determines the relation between the
company and its members.
Its alteration is difficult and it requires
ordinary or special resolution and a
sanction from the CG.
Articles can be altered easily by
passing resolution in a general
meeting provided it is within the scope
of the company and in the interest of
the company.

39. MOA AOA
Every company has to prepare its own
MOA
Every company need not prepare.
They can adopt Table.
It is subordinate to the act It is subordinate to the MOA.
Acts, which are ultra vires to the MOA
cannot be ratified by the
shareholders.
Acts, which are ultra vires to the
Articles but intra vires the
memorandum can be ratified by the
shareholders.

40. Effects of MOA & AOA
• Bind each member to the company.
• Bind the company to each member.
• Bind each member to other member.
• Company and outsiders.

41. Doctrine of constructive notice
• Any person who deals with the company is presumed to have
the knowledge as to the contents of MOA and AOA. Such
knowledge or notice is called ‘constructive notice’.
• Case Law: Kotla venkatswamy vs Ram murthy & others

42. Doctrine of Indoor
management.
• It relates to the internal matters, and an outsider can presume
that the internal working of the company is In consonance
with the provisions of public documents.
• Case law: Royal British bank vs Turquand.
• The directors of the company borrowed money from
liquidator Turquand. According to AOA, the director have
borrowing power subject to authorization by shareholders
resolution. The turquand claim was denied on the ground that
there was no resolution by shareholders to that effect.
However the court denied the contents of the shareholders
and held the company liable.

43. Exceptions:
• Forgery: Case law: Roube vs Great fingal consolidated.
• Where the secretary of the company forged signatures of two
directors required under the articles on a share certificate and
issued certificate without authority, the applicants were refused
registration as members of the company. The certificate was held to
be nullity and the holder of the certificate was not allowed to take
advantage of the doctrine of indoor management.
• Knowledge of irregularity: Case law: Howard vs Patent ivory.
• The articles of a company empowered the directors to borrow upto
1000 pounds only. They could however exceed the limit of 1000 with
the consent of the company in general meeting. Without such
consent having been obtained they borrowed 3500 pounds from
one of the directors who took debentures. The company refused to
pay the amount. Held that the debentures were good to the extent
of 1000 pounds only because the director had notice or was deemed
to have the notice of the internal irregularity.

44. Dist btwn Constructive notice
and Indoor management.
Points Doctrine of CN Doctrine of IM
Meaning According to the
doctrine every person
dealing with the
company is deemed to
have a constructive
notice of the contents of
its MOA and AOA
According to the
doctrine persons dealing
with the company are
entitled to presume that
internal requirements
prescribed in
memorandum and
articles have been
properly observed.
To whom protects It protects the company
against the outsiders.
It protects outsider
against the company.
Affairs It is confined to the
external position and
affairs of the company.
It is confined to the
internal position and
affairs of the company.

45. Reason The MOA and AOA of
the company are the
public documents. They
must be registered with
the ROC. These are open
to public and third
parties.
The internal affairs need
not be registered. They
are not open to the
public and third parties.

46. Membership
Section 2(55):Member in relation to a company means
(i) Subscriber to the MOA.
(ii) Person= Agreed in writing + ROM
(iii) Person = Holding share + ROD (As a Beneficial owner)
Shall be deemed to member of the company.

47. Modes of acquiring
membership.
Membership by subscribing to the memorandum of
association.
Membership by Agreeing to become member :
• By allotment of shares.
• By Transfer of shares.
• By transmission of shares.
-Becomes a member by operation of law.
• By Acquiescence or estoppels.
-Allows his name, without sufficient cause to be on the register
of members of the company or
-Holds himself out or allows himself to be held out as a member.

48. Membership by holding shares as beneficial owner in the
records of depository.
Joint membership

49. All members of the
company are shareholders
and all shareholders of the
company are members.

50. • Who is a member?
• Who is a shareholder?
• Exceptions:
• A member may not be shareholder.
• A shareholder may not be a member.

51. Who can become a member

52. 1. Company as a member of
another company.
• Sec 19: a subsidiary company cannot become a member of
the holding company except:
- As a legal representative of a deceased member of the holding
co.
- As a trustee for some shareholder of holding company.
- It was a member of holding company before becoming
subsidiary.
- Prohibits holding company.

53. 2. Partnership firm as a member of company.
3. Limited liability partnership.
4. Foreigner as member.
5. Minor as a member.
6. Insolvent as a member.

54. 7. Pawnee
8. Receiver
9. Trade union as a member.

55. Termination of membership
A person ceases to be a member of a company when his name is
removed from its ROM, which may occur in following situations:
• He transfers his shares to another person.
• His shares are forfeited
• He makes a valid surrender of shares.
• His shares are sold by the company to enforce a lien.
• He dies or is adjudged insolvent.
• His redeemable preference shares are redeemed.
• His shares are bought-back
• The company is wound up

56. Expulsion of member.
• The articles cannot provide for expulsion.

57. Rights of member.
Individual rights
Right to receive copies of documents from the company
• Balance sheet and Profit n loss ac.
• Report of cost auditor
• Contract for appointment of MD and manager.
Right to inspect statutory registers
• Annual returns
• Minutes book
• Register of directors
• Register of directors shareholdings.
• Register and index of members and debenture holders.

58. Right to attend meetings and exercise voting.
Other rights.
• To receive share certificates
• To transfer shares.
• To receive dividends.
• To appoint directors.
• To share surplus assets during winding up.
Collective membership rights

59. Liability of member
• To pay calls on shares
• To pay full nominal value of shares.
• To pay all debts of the company.