Section 7 of the Companies Act, 2013
Section 7 of the Companies Act, 2013 deals with the Incorporation of a company.
Here’s a simplified explanation of Section 7:
Section 7 – Incorporation of Company
This section lays out the procedure and requirements for incorporating a company under the Companies Act, 2013.
Key Provisions:
Documents required for incorporation:
The Memorandum of Association (MoA) and Articles of Association (AoA) signed by the subscribers.
A declaration by a professional (like a CA, CS, or Advocate) that all requirements under the law have been complied with.
An affidavit from each subscriber and first director stating:
They are not convicted of any offence involving fraud or misfeasance.
They are not guilty of any fraud during the formation of the company.
Filing with Registrar of Companies (RoC):
All the above documents are submitted to the RoC along with the prescribed fee.
The RoC, after verifying the documents, issues the Certificate of Incorporation (COI) and Corporate Identity Number (CIN).
Maintenance of records:
The company must maintain a copy of MoA, AoA, and all other relevant documents at its registered office.
Action in case of false information:
If false information is provided or any suppression of facts is found:
The RoC may take action to remove the name of the company from the register.
Legal action may also be taken against the individuals involved (like imprisonment or penalty).
Right to take action:
The Tribunal (NCLT) can order appropriate action, such as:
Regulation of the company’s affairs.
Removal of the name of the company.
Winding up.
Any other order deemed fit.
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