Introduction to Company Law and Company Formation
Introduction to Company Law and Company Formation
This domain tests the legal nature of a company and the mechanics of incorporation under the Companies Act, 2013: separate legal personality, limited liability, perpetual succession, and the SPICe+ route from name reservation to certificate of incorporation.
Core rules
- A company is a juristic person distinct from its members; liability is limited to unpaid amount on shares or guarantee.
- Minimum subscribers: 2 for private, 7 for public, 1 for OPC. MOA and AOA must be subscribed.
- Name is reserved through SPICe+ Part A (or Part B if no separate reservation); DSC and DIN are obtained; incorporation is filed in SPICe+ Part B with eMOA (INC-33), eAOA (INC-34), declarations and fee.
- Certificate of incorporation issued by ROC includes CIN. Section 10A requires a declaration in INC-20A within 180 days of incorporation and verification of subscription money before commencing business.
Worked example
A and B form a private company with ₹1,00,000 capital. They reserve the name, file SPICe+ Part B with both as subscribers, pay subscription money, and receive the certificate. Before starting operations they file INC-20A within 180 days; otherwise the company cannot commence business and may be removed.
Traps
Do not say a company needs a common seal; it is optional. Formation for an unlawful object is void. Subscriber count and 10A compliance are commonly tested.