Company law questions and answers pdf

Search this website Type then hit enter to search. Share via. Copy Link. Powered by Social Snap. Copy link. Copy Copied. Company Law Notes. Company Law Book. Company Law Syllabus. Company Law Question Paper. Company Law Questions and Answers. State whether that person will be counted towards quorum a Yes b No Ans.

Question: Governor appointed a proxy. Related: Cloze test practice. Question: Share warrant can be transferred by delivery. Question: Can shares be allotted immediately after the issue of prospectus a Yes b No c None of the above Ans. Related: Railway Recruitment Sample Papers. Question: A company not declare dividend at.

M d None of the above Ans. Question: X Co. Can we say that Y Co. Question: Can sec. Related: Synonyms list. Question: A proxy must bear revenue stamp worth. Related: Questions on four Vedas Indian History. Question: Share warrant does not contain any name on face of it. Question: Stamp duty to be paid at the time of issue of share certificate is.

Question: With in how many days prospectus or statement in lieu of prospectus should file with ROC a 30 b 40 c 20 d 50 Ans. Question: For computation of number of working days as per Sec 14 the day when employee has been laid off under an agreement or by a standing order under Industrial Disputes Act will be included a Yes b No Ans.

Related: Important day in February. Question: Private company can start its business immediately after the issue of a Certificate of commencement of Business b Certificate of Incorporation c Both d None of the above Ans. Question: If the refunds are delayed by more than 10 days after this period.

Question: If the employer is a partnership firm. P as remuneration to partners. Question: Where any employee committed any fraud in that accounting year. Mention whether he is eligible for Bonus. Who has been dismissed from service? Question: An appeal is made to whom against stock exchange for refusing the permission of listing.

Question: The expenses of holding an E. Question: The term company is defined under which sec of the Act? Related: Legal Aptitude Tests. Question: Security deposit received from the employee will not be treated as deposit.

Films Ltd. Avoidance of welfare legislation: Where the courts find that there is avoidance of welfare legislation, it will be free to lift the corporate veil. Workmen of Associated Rubber Industry Ltd.

Associated Rubber Industry Ltd. Protecting public policy: The Courts invariably lift the corporate veil or a disregard the corporate personality of a company to protect the public policy and prevent transactions contrary to public policy.

Connors v. Connors Ltd. In quasi-criminal cases: The courts pierce the corporate veil in quasi-criminal cases in order to look behind the legal person and punish the real persons who have violated the law. In this context they seek your advice as to the. Answer Corporate Veil: After incorporation, the company in the eyes of law is a different person altogether from the shareholders who have formed the company.

The company has its own existence and as a result the shareholders cannot be held liable for the acts of the company even though the shareholders control the entire share capital of the company. This is popularly known as Corporate Veil and in certain circumstances the courts are empowered to lift or pierce the corporate veil by ignoring the company and directly examine the promoters and others who have managed the affairs of the company after its incorporation.

Thus, when the corporate veil is lifted by the courts, i. In the following circumstances, corporate veil can be lifted by the courts and promoters can be held personally liable for the debts of the company. Question 4 ABC Pvt. All the members of the company were going by car to Mumbai in relation to some business. An accident took place and all of them died. Answer with reasons, under the Companies Act, whether existence of the company has also come to the end?

Answer Death of all members of a Private Limited Company, Under the Companies Act, A joint stock company is a stable form of business organization. Its life does not depend upon the death, insolvency or retirement of any or all shareholder s or director s. The provision for transferability or transmission of the shares helps to preserve the perpetual existence of a company. Law creates it and law alone can dissolve it. Members may come and go but the company can go on forever.

So in such case, the ABC Pvt. By way of transmission of shares, shares are transmitted to their legal representatives. The company ceases to exist only on the winding up of the company. Therefore, even with the death of all members i. Question 5 F, an assessee, was a wealthy man earning huge income by way of dividend and interest.

He formed three Private Companies and agreed with each to hold a bloc of investment as an agent for them. The dividend and interest income received by the companies was handed back to F as a pretended loan. This way, F divided his income into three parts in a bid to reduce his tax liability. Decide, for what purpose the three companies were established?

Whether the legal personality of all the three companies may be disregarded. But under certain circumstances the corporate veil may be lifted by the courts. It means looking behind the corporate faade and disregarding the corporate entity.

Where a company is incorporated and formed by certain persons only for the purpose of evading taxes, by taking shelter of the corporate nature, the courts have discretion to disregard the corporate entity in the matter of tax evasion. The three companies were formed by the assessee purely and simply as a means of avoiding tax and the companies were nothing more than the assessee himself. Therefore the whole idea of Mr.

F was simply to split his income into three parts with a view to evade tax. It did no business, but was created simply as a legal entity to ostensibly receive the dividend and interest and to handover them over to the assesse as pretended loans. Question 6 Explain clearly the concept of perpetual-succession and common-seal in relation to a company incorporated under the Companies Act, Answer Perpetual Succession and Common Seal: A company is a juristic person with a perpetual succession.

It never dies nor does its life depends upon the life of its members. It is not in any manner affected by insolvency, mental disorder or retirement of any of its members. It is created by a process of law and can be put to an end only by the process of law. Members may come and go but the company can go on forever until dissolved. It continues to exist even if all its human members are dead. Since a company had independent existence and since all acts of the company are done in the name of the company, it enjoys a Seal known as common seal.

Common seal is equivalent to signature of the company and is affixed on all documents issued by the company. Common seal of the company is kept in safe custody by a responsible officer of the company. Question 7 State whether the following statement is correct or incorrect: A company is a legal person but not a citizen.

State the similarities and dissimilarities between a Guarantee Company and a Company having Share Capital. Answer Meaning of Guarantee Company: Where it is proposed to register a company with limited liability, the choice is to limit liability by shares or by guarantee. Section 12 2 b of the Companies Act, defines it as a company having the liability of its members limited by the memorandum to such amount as the members may respectively undertake by the memorandum to contribute to the assets of the company in the event of its being wound up.

Thus, the liability of the member of a guarantee company is limited by a stipulated amount mentioned in the memorandum. The members cannot be called upon to contribute more than the stipulated amount for which they have guaranteed in the memorandum of association of that company. The articles of association of such company shall state the number of members with which the company is to be registered.

Similarities and dis-similarities between the Guarantee Company and the Company having share capital: The common features between a guarantee company and the company having share capital are legal personality and limited liability. In case of the later company, the members liability is limited by the amount remaining unpaid on the shares, which each member holds. Both of them have to state this fact in their memorandum that the members liability is limited.

However, the dissimilarities between a guarantee company and company having share capital is that in the former case the members may be called upon to discharge their liability only after commencement of the winding up and only subject to certain conditions; but in latter case, they may be called upon to do so at any time, either during the companys life or during its winding up. Saroj Maloo 6 SC C has laid down that the right of a guarantee company to refuse to accept the transfer by a member of his interest in the company is on a different footing than that of a company limited by shares.

The membership of a guarantee company may carry privileges much different from those of ordinary shareholders. It is also clear from the definition of the guarantee company that it does not raise its initial working funds from its members. Therefore, such a company may be useful only where no working funds are needed or where these funds can be had from other sources like endowment, fees, charges, donations etc.

Question 9 Can a non-profit organization be registered as a company under the Companies Act? If so, what procedure does it have to adopt?

Answer Registration of a non-profit organisation as a company: An association of persons set up for promoting commerce, arts, science, religion, charity or any other useful, object and intends to apply its profits or other income in promotion of its objects can be registered as a Company under the Companies Act. However, it has to prohibit payment of any dividend to its members. Procedure: The association has to apply to the Central Government for issuing a licence. Through this licence the Central Government shall direct the Registrar to register the association as a company with limited liability without the addition of words limited or private limited to its name.

Therefore, the association may be registered accordingly. The association has to fulfill the conditions needed for registration as a company, i. On registration subject to the provisos of Section 25 it will have the same privileges and obligations as a limited company has. This licence is revocable by the Central Government, and on revocation the Registrar shall put the words Limited or Private Limited against the companys name in the Register.

But before such revocation, the Central Government must give it a written notice of its intention to revoke the licence and opportunity to be heard in the matter. Question 10 Mr. V, alongwith six other persons desires to float a company for charitable purposes, as permissible under Section 25 of the Companies Act, He seeks your advise about the procedure to be followed to give effect to the above proposal.

Advise him. Answer Company for charitable purposes Section 25 of the Companies Act, : According to Section 25 of the Companies Act, the procedure to be followed to give effect to the said proposal is as follows:. The company may be a Limited Company with share capital or a company limited by guarantee. In no case the profits of the company can be distributed in the forms of dividends on bonus shares.

All the profits of the company should be used only for welfare purposes and company's progress. These factors must be incorporated in AOA. Out of the three names chosen by the promoters for the name of the company one should be used. If it is not available the proposals repeated by filing form no. Three copies of a approved MOA and AOA alongwith the registration and filing fee, documents like form 1, 18, 32 and consent etc.

The company becomes operative on incorporation. Question 11 State whether the following statement is correct or incorrect: 'A private limited company must have a minimum of two directors, while a public limited company must have atleast three directors, Answer Correct Question 12 Under what circumstances a company becomes subsidiary of another company under the provisions of the Companies Act, ?

Answer Holding and Subsidiary Companies are relative terms. A company is a holding company of another only if the other is its subsidiary. Any of the circumstances illustrated below must exist to constitute the relationship of holding and subsidiary companies: a When one company controls the composition of Board of Directors of the other companies.

Business Laws, Ethics and Communication respects as the holders of equity shares, exercises or controls more than half of the total voting power of such company. Where a company other than above mentioned company above holds more than half in nominal value of the equity share capital of the other company. Question 13 With reference to the provisions of the Companies Act, explain the circumstances under which a subsidiary company can become a member of its holding company- Examine the position of the following with regard to membership in a company: i An Insolvent ii Partnership Firm.

Answer In accordance with the provisions of Section 42 of the Companies Act, , a subsidiary company cannot become a member in its holding company and any allotment or transfer of shares in a company to its subsidiary is void. The section however does not apply where: a the subsidiary company is a legal representative of a deceased member of the holding company, or b the subsidiary company is a trustee and the holding company or a subsidiary thereof is not beneficially interested under the trust, or c entered into by the holding company in the ordinary course of business which includes the lending of money.

Position of the following with regard to membership in a company: i Partnership Firm: A partnership may firm hold shares in a company in the individual names of partners as joint shareholders. As an un incorporated association, a firm is not a person and as such it cannot be entered as a member in the register of members.

Ganesh Das Ram Gopal v. Cotton Mills Ltd. Section 25 of the Companies Act however, permits a firm to be a member of a company licensed under Section So long as his name appears in the register of members, he is a member and is entitled to vote even though his shares vest in the Official Assignee or Receiver.

Morgan v. Gray allotment or transfer of shares is by way of security for the purpose of a transaction. Answer Holding, subsidiary relationship: For the purpose of determining whether a company is subsidiary of another company, only equity shares issued by the first mentioned company are to be taken into account [Section 4 1 b ii , of Companies Act, ].

Again, shares held by a subsidiary company shall be treated as held by its holding company [Section 4 3 b ii ]. If a company by itself or along with its subsidiaries holds more than half in nominal value of the equity shares capital of another company, it will be considered as the holding company of the other company [Section 4 3 b ii of companies Act, ] In this case, the equity share capital of AVS Pvt.

If TSR Pvt. Ltd; it will also be treated as holding company by virtue of Section 4 1 a. Hence the answer will not be different. The Central Government is empowered under Section 4A 2 to add any other institution to the above list.

This addition has to be made through a notification, in the Official Gazette. In exercise of this power, the Central Government has notified more than 30 institutions as Public Financial Institutions. Any financial institution applying for declaration as PFI shall fulfill the aforesaid criteria.

All the shares of one such shareholder are sold by the court in an auction and purchased by another shareholder. The company continues to carry on business thereafter. Discuss the liabilities of the shareholders of the company under the Companies Act, Answer Consequences of membership falling below legal minimum: The problem in the question relates to reduction of membership below the statutory minimum.

Section 12 of the Companies Act, requires a public company to have a minimum of seven members. If at any time the membership of a public company falls below seven and it continues its business for more than six months, then according to Section 45 of the Act every such member who was aware of this. Accordingly, in the given problem, the remaining six members shall incur personal liability for the debts contracted by the company, i If they continued to carry on the business of the company with that reduced membership beyond the six month period.

Question 17 UMC, Limited has only 7 shareholders having fully paid-up shares. On 30th April, , all the shares of X a shareholder of the company are sold to Y another shareholder of the company in an auction by the order of the court. Z, a shareholder of the company was in USA for a business trip from January and thus he was not aware of the developments. The company continues to carry on its business thereafter.

Later, the company was wound up and the Assets of the company were not sufficient for the payment of its Liabilities. The Bank filed a suit against Y and Z for recovery of the said loan from them. Would your answer be the same, if the said loan was taken in the month of March, ?

Answer The problem relates to reduction of membership below the statutory minimum. It at any time the membership of a public company falls below seven and it continues its business for more than six months, then according to Section 45 of the Act every such member who was aware of this fact would be personally and severally liable for all debts contracted by the company during the period and may be severally sued for all debts contacted after six months.

Accordingly in the given problem: i Y is personally liable for the payment of loan to the Unique Bank because the members of the UMC Limited continued to carry on the business of the company with that reduced membership beyond the six months period and Y knows this fact. No members shall be personally liable for the repayment. Question 18 What will be the consequence in case a Private Company incorporated under the provisions of the Companies Act, defaults in complying with conditions constituting Private Company in terms of Section 3 1 iii of the Companies Act, Some other procedural concessions are also given under the Companies Act, In accordance with the provisions of Section 43 of the Companies Act, , if contravention is made against complying with the provisions contained in Section 3 1 iii , the company shall lose all the privileges and exemptions conferred on it by the Act, and the provisions of the Act shall apply to it as if it were not a private company.

But the Company Law Board may relieve the company from such a consequence if it is satisfied that the failure in compliance with the said requirement was not deliberate but was accidental or inadvertent or that on other grounds it is just and equitable to grant relief. Explain the procedure for conversion of a Public Company into a Private Company. Answer Definition of a Private Company: According to Section 3 1 iii of the Companies Act, a 'private company' means a company which has a minimum paid-up capital of one lakh rupees or such higher paid-up capital as may be prescribed and by its articles: a restricts the right to transfer its shares if any.

Procedure for conversion of a Public Company into a Private Company: A private limited company, if it desires to convert itself into a public company will have to follow the undermentioned procedure: 1 It should take the necessary decision in its board meeting and fix up the time, place and agenda for convening a general meeting to alter the articles of association and consequently the name by a special resolution as well as to alter by special resolution the "object clause" of the memorandum subject to the confirmation of the Company Law Board Now Central Government under Section 17 and by ordinary resolution the share capital clause under Section 94 if the alteration of share capital is involved in the process.

Such other articles which do not apply to a public company should be deleted and those which apply should be inserted. Consequent upon the above changes, it will have to delete the word "private" from its name [Section 21]. Question 20 State whether the following statement is correct or incorrect:. If the Central Government permits, a public company can be converted into a private company. Answer Correct Procedure for Conversion of a Private Company into a Public Company Question 21 What is the procedure laid down in the provisions of the Companies Act, for converting a private company into a public company?

Or Board of Directors of a private company decided to convert it into a public company. State the steps to be taken for such conversion in order to comply with the requirements under the Companies Act, Answer Conversion of Private Company into a Public Company Procedure for conversion of a private company into a public company is as follows: i Take necessary decision in its Board Meeting and fix up time, place and Agenda for convening Annual General Meeting.

Approval of Central Government is not necessary for change of name. A copy of the special resolution must be filed with the Registrar of Companies within 30 days. It becomes a public company on the date of alteration [Section 44 1 a ]. The prospectus or statement in lieu of prospectus must be true and not misleading [Section 44 2 and 3 ].

Sparkle Infotech Ltd. There are 76 members in the Company as stated below: i Directors and their relatives 36 12 8 14 6 76 ii Employees iii Ex-employes shares were allotted when they were employees iv 7 couples holding shares jointly in the names of husband and wife 7X2 v Others Total number of members. Advise the Board of Directors about the steps to be taken for conversion into a Private Company including reduction in the number of members, if necessary, as per the Companies Act, Answer A private company as per Section 3 1 iii cannot have more than 50 members, but for counting these 50 members, employee members and ex-employee members provided they acquired the shares while in employment are to be excluded.

Besides, joint members are to be counted as a single member. No reduction in membership is therefore called for. The procedure for converting a public company will require: i Passing of a Special Resolution authorizing the conversion and altering the articles so as to contain the matters specified in Section 3 1 iii. As per Section 21, it does not require special resolution to be passed.

Briefly explain the privileges and exemptions for a private company as provided under the Companies Act, Answer A private company means a company which has a minimum paid-up capital of one lakh rupees or such higher paid-up capital as may be prescribed, and by its articles.

It enjoys some privileges and exemptions, which a public company is deprived of. These are as follows: 1. Two or more persons may form a private company [Section 12 1 ]. It need not hold a Statutory Meeting or file a statutory report [Section ]. The consent of directors to act as such, and to take up qualification shares need not be filed with the Registrar [Section ]. There is no restriction on the amount of overall managerial remuneration that it may pay [Section ].

The directorship of a private company is not includible in the maximum number of directorships that a person may hold [Section ]. The consent of the Central Government for advancing loans to directors is not required [Section ]. There are no restrictions on the powers of the Board of Directors [Section ] The Central Government is not empowered to prevent a change in the Board of Directors of a company, which is likely to affect management prejudicially [Section ].

It can advance loans for the purchase of its own shares [Section 77 2 ]. Question 24 Whether a limited company can become partner in a partnership firm? Answer One of the important features of a company is an artificial juristic person. Being a juristic person, company is capable of entering into contract in its own name. According to Section 4 of the Partnership Act, , partnership is a contractual relationship between persons; therefore, there should not be any objection to a company in becoming partner.

Further, the limited liability element of a limited company is also do not restrict a company in becoming a partner in an unlimited liability of a partnership firm, because, it is limited liability of members of a limited company and not the company itself. However, the Ministry of Corporate Affairs is in the opinion that, a company may become a partner if the Memorandum of Association specifically allows it.

The United Traders Association was constituted by two joint Hindu Families consisting of 21 major and 5 minor members. The Association was carrying on the business of trading as retailers with the object for acquisition of gains.

The Association was not registered as a company under the Companies Act, or any other law. State whether United Traders Association is having any legal status? Will there be any change in the status of this Association if the members of the United Traders Association subsequently were reduced to 15? Answer Section 11 of the Companies Act, provides that no company, association or partnership consisting of more than 10 persons for the purpose of carrying on the business of banking and more than 20 persons for the purpose of carrying on any other business can be formed unless it is registered under the Companies Act or is formed in pursuance of some other Indian Law.

Thus if such an association violates the provisions of Section 11 it is an Illegal Association although none of the objects for which it may have been formed is illegal. This Section does not apply to a joint Hindu family but where the business is being carried on by two or more joint Hindu families the provisions of Section 11 shall be applicable.

For computing the number of members for this purpose, minor members of such families shall be excluded. Hence, the United Traders Association constituted by two joint Hindu Families is an Illegal Association according to the provisions of Section 11 as stated above. Further, such Association of more than 20 persons, if unregistered is invalid at its inception and cannot be validated by subsequent reduction in the number of members to below 20 Madan Lal vs.

Janki Prasad 4 All In exactly the same way, 2 or more persons can form a private company [Section 12]. Persons who form the company, who conceive the idea of forming the company are known as promoters. They take all necessary steps for its registration.

Unless the purpose appears to be unlawful ex facie or is transparently illegal or prohibited by way of statute, it cannot be regarded as an unlawful purpose. Section 15 stipulates that the Memorandum should be signed by each subscriber who should add his address, description and occupation in the presence of one witness.

Question 27 Which documents are required to be filed with the Registrar of Companies at the time of registration of a company under the provisions of the Companies Act, ? Answer Filing of document with the Registrar of Companies: After getting the name approved, the following documents along with the application and prescribed fee, are to be filed with the Registrar: 1 Memorandum of Association [Section 33 1 a ] 2 Articles of Association, if any [Section 33 1 b ] 3 The agreement, if any, which the company proposed to enter into with any individual for appointment as its Managing or Whole Time Director or Manager, [Section 33 1 c ] 4 A declaration that the requirements of the Act and the rules framed there under have been complied with.

This declaration is required to be signed by an advocate of the Supreme Court or High Court or an attorney or a pleader having the right to appear before High Court or a Company Secretary or a Chartered Accountant in whole time.

Section Question 28 What is the meaning of Certificate of Incorporation under the provisions of the Companies Act, ? OR State the conditions which are applicable for the purpose of commencement of business by a public company under the Companies Act, Answer Certificate of Incorporation: Upon the registration of the documents required for registration of a proposed company and filed by such company along with the necessary fee, the Registrar of Companies issues a certificate that the company is incorporated and in the case of a limited company, that it is limited Section 34 of the Companies Act, Section 35 provides that the certificate of incorporation given by the Registrar shall be conclusive evidence that all the requirements of this Act have been complied with in respect of registration and matters precedent and incidental thereto, and that the association is a company authorized to be registered and duly registered under this Act.

A certificate of incorporation is conclusive as to all administrative acts relating to incorporation and as to from the date of incorporation Jubilee Cotton Mills vs. Lewis Commencement of Business: A private company can commence its business as soon as it gets Certificate of Incorporation. But a company having a share capital which has issued a prospectus inviting the public to subscribe for its shares cannot commence any business or exercise borrowing power unless: a The minimum number of shares which have to be paid for in cash has been subscribed and allotted.

If, however, a company having a share capital has not issued a prospectus inviting the public to subscribe for its shares, it cannot commence any business or exercise borrowing powers unless it has issued a statement in lieu of prospectus and the conditions contained in paragraph b and d aforesaid have been complied with.

The Registrar of Companies shall examine them and if satisfied, shall issue to the company a certificate to commence business. Question 29 What are the effects of registration of a company? Answer Section 34 2 of the Companies Act, which provides for the effect of incorporation states that: From the date of incorporation mentioned in the certificate of incorporation, such of the subscribers to the Memorandum and other persons, as may from time to time be members of the company, shall be a body corporate by the name contained in the memorandum, capable forthwith of exercising all the functions of an incorporated company and having perpetual succession and a common seal, but with such liability on the part of the members to contribute to the assets of the company in the event of its being wound up as is mentioned in the Companies Act.

Accordingly, when a company is registered and a certificate of incorporation is issued by the Registrar, three important consequences follow: i The company becomes a distinct legal entity. Its life commences from the date mentioned in the certificate of incorporation.

The members may come and go, but it does on forever, unless it is wound up. The shareholders have a right to share in the profits of the company when realised and divided. Likewise any liability of the company is not the liability of the individual shareholders. Question 30 A Company was incorporated on 6th October, The certificate of incorporation of the company was issued by the Registrar on 15th October, The company on 10th October, entered into a contract, which created its contractual liability.

The company denies from the said liability on the ground that company is not bound by the contract entered into prior to issuing of certificate of incorporation. Decide, under the provisions of the Companies Act, , whether the company can be exempted from the said contractual liability. Certificate of Incorporation and the binding effect: Upon the registration of the documents as required under the Companies Act, for incorporation of a company, and on payment of the necessary fees, the Registrar of Companies issues a Certificate that the company is incorporated Section Section 35 provides that a certificate of incorporation issued by the Registrar is conclusive as to all administrative acts relating to the incorporation and as to the date of incorporation.

The facts as given in the problem are similar to those in case of Jubilee Cotton Mills v. Lewis A. Applying the above principles the contention of the company in this case cannot be tenable.

It is immaterial that the certificate of incorporation was issued at a later date. Since the company came into existence on the date of incorporation stated on the certificate, it is quite legal for the company to enter into contracts.

To conclude the contracts entered into by the company before the issue of certificate of incorporation shall be binding upon the company. The date of issue of certificate is immaterial. Question 31 The promoters of your company incorporated on 10th September, has entered into a contract with A on 7th August, for supply of goods. After incorporation, your company does not want to proceed with the contract. As a Company advisor, advise the management of the company, referring to the provisions of the Companies Act, Answer Pre-incorporation contracts in general are void ab initio, and hence not binding on the company.

However, under Section 19 e of the Specific Relief Act, , the party to the contract can enforce the contract against the company, if i the company had adopted the same after incorporation; and ii the contract is warranted by the terms of incorporation.

Thus, unless the company adopts the contract, the other party cannot enforce the same against the Company. However, promoters can be held personally liable. Question 32 Though six out of seven signatures to the Memorandum of Association of a company were forged, the company was registered and the Certificate of Incorporation was issued.

Can the registration of the company be challenged subsequently on the ground of forged signatures? The Memorandum of Association of a company was signed by two adult members and by a guardian of the other five minor members, the guardian signing separately for each minor member.

The Registrar registered the company and issued under his hand a Certificate of Incorporation. The plaintiff contended that a conditions of registration were not duly complied with, and b that there were no seven subscribers to the Memorandum.

Will the Court uphold his contention? Answer No. Registration cannot be challenged. Section 35 of the Companies Act declares that certificate of incorporation given by the Registrar in respect of any company shall be conclusive evidence that all the requirements of the Act have been complied with in respect of registration and matters precedent and incidental thereto, and that the association is company authorized to be registered and duly registered under the Act.

Peels Case Question 33 Mr. Ram Lal and his friend desire to incorporate a Public Company and approach you for help. Answer 1. A name must got allotted out of a choice of three. Consent must be given in Form No. List of directors must also be filed. Form No. I Declaration by a Professional or Director is also necessary on the requisite stamp paper. The name available letter should be filed in Original. A power of attorney on non-judicial stamp paper for making corrections and receiving Incorporation Certificate is necessary.

Fees for registration of a company depending upon the authorised capital must also be paid. After satisfaction of the above requirements, the ROC issues a certificate staling that the public company has been incorporated.