13 November 2007
Hello, Can anyone please guide me through the provisions of Chapter IX of Companies Act 1956 where by we can convert a partnership firm into a private limited company directly?
13 November 2007
REGISTRATION OF A JOINT STOCK COMPANY UNDER PART IX* 8.1 Background note
Part IX of the Companies Act, 1956 permits companies, associations, societies or partnership firms constituted in pursuance of any other law in force in India to register themselves as companies and avail the facilities under the Act. 8.2 Eligibility to get registration The following companies are eligible to register under the Companies Act, 1956 as an unlimited company or as a company limited by shares or guarantee : u Any company consisting of seven or more members, which was in existence on the 1st day of May, 1882, including any company registered under Act No. 19 of 1857 and Act No. 7 of 1860 or either of them or under any laws or law in force in a Part B State, corresponding to those or either of them. u Any company consisting of seven or more members formed after 1st May, 1882 in pursuance of any Act of Parliament other than this Act or any other Indian law (including a law in force in a Part B State) or of any Act of Parliament of the United Kingdom or Letters Patent in force in India. u Any other company consisting of seven or more members formed after 1st May 1882 and otherwise duly constituted according to law. 8.3 Non-eligibility The following categories of companies shall not be registered pursuant to the above provisions : C H A P T E R *RELEVANT PROVISIONS : u Companies Act, 1956 : Sections 565 to 567, 569 to 581, Schedules V & X. u Companies (Central Government's) General Rules and Forms, 1956 : eforms 1A, 1, 18, 32, 37, 39 APPLICABILITY : JOINT STOCK/NON-JOINT STOCK COMPANIES/FIRMS u A company registered under the Indian Companies Act, 1882 or under the Indian Companies Act, 1913. u Any company whose registered office at the commencement of the Act is in Burma, Aden or Pakistan. u A company incorporated outside India. u A company having the liability of its members limited by any Act of Parliament other than the Companies Act or any other Indian law (including a law in force in a Part B State), or by any Act of Parliament of the United Kingdom or Letters Patent in force in India, and which is not a joint stock company as defined under the Act. u A company having the liability of its members limited by any Act of Parliament other than this Act or any other Indian law (including a law in force in a Part B State), or by any Act of Parliament of the United Kingdom or Letters Patent in force in India, shall not register as an unlimited company or as a company limited by guarantee. u A company which is not a joint stock company shall not register as a company limited by shares. 8.4 Registration of Joint Stock Companies as a company limited by shares Only Joint Stock Companies shall be registered as a company limited by shares. 8.4-1 Definition of Joint Stock Company The term “joint stock company” means a company having permanent paid-up or nominal share capital of fixed amount divided into shares also of fixed amount, or held and transferable as stock, or divided and held partly in one way and partly in the other, and formed on the principle of having for its members the holders of those shares or that stock, and no other persons. Such a company when registered with limited liability shall be deemed to be a company limited by shares. 8.4-2 Registration of Partnership Firms A partnership firm having a permanent paid-up or nominal share capital of fixed amount divided into shares also of fixed amount and having 7 or more members (with only shareholders as members) shall be treated as a Joint Stock Company and eligible to register under this Part. 8.5 Name Availability The name availability letter should be obtained from the Registrar of Companies by complying with the procedure given in Chapter 1. The words "limited" or "private limited" shall form part of the name unless it is an unlimited company/Government company/section 25 company. 8.5-1 Change of name for the purpose of registration If the name of the company seeking registration is one which, in the opinion of the Central Government, is undesirable, the name of the company may be changed with effect from the date of registration. For this purpose, the approval of the Registrar of Companies should be obtained in writing. Further, the assent of members of the company should also be obtained in a General Meeting convened for this purpose. 8.6 Substitution of memorandum and articles for deed of settlement A company registered under Part IX may, by passing a special resolution (Annex 8.1), alter the form of its constitution by substituting a memorandum and articles for a deed of settlement. Such alteration may be made with or without any alteration to the objects clause of the company. 8.6-1 Definition of Deed of Settlement The expression “Deed of Settlement” includes any deed of Partnership, Act of Parliament of the United Kingdom, Royal Charter or Letters Patent or other instrument constituting or regulating the company, not being an Act of Parliament or other Indian Law. 8.7 Filing of printed copy of substituted memorandum with Registrar A printed copy of the substituted memorandum and articles of association should be filed with the Registrar of Companies. The Registrar shall certify the alteration and thereupon the substituted memorandum shall apply to the company as if the company is registered under this Act with that memorandum and articles. The company’s deed of settlement shall cease to apply to the company. 8.8 General meeting resolution The registration requires the assent of majority of members present and voting at a meeting summoned for the purpose. In the case of registration of an unlimited company as a limited company, the assent required is of threefourths majority of members present and voting at the meeting. For specimen resolution see Annex 8.1. 8.8-1 Declaration in case of companies seeking registration as guarantee company In the case of a company intending to register as a company limited by guarantee, the assent shall be accompanied by a declaration (Annex 8.2) that each member undertakes to contribute to the assets of the company in the event of its winding up while he is a member or within one year after he ceases to be a member. This contribution shall be for the purpose of payment of debts and liabilities of the company or of the debts and liabilities as may have been contracted before he ceases to be a member and for meeting the costs, charges and expenses of winding up and for adjustment of the rights of the contributories among themselves to the extent of specified amount. 8.9 Submission of eform 37 with the Registrar An application in eform 37 (Annex 8.3 for specimen filled in form) should be filed with the Registrar of Companies through MCA Portal - www.mca.gov.in. 8.9-1 Who can file? The eform 37 shall be filed by a managing director or director or manager or secretary duly authorised by the Board and holding Valid Digital Signature Certificate. (Refer Chapter 360 for Digital Signature Certificate) 8.9-2 Time Limit This eform should be filed during the validity period of name availability, (i.e.) within six months of the date of name approval letter issued by the Registrar of Companies. 8.9-3 Attachments A copy of the instrument constituting or regulating the company. 8.9-4 How to attach documents? The attachments shall be in PDF format. A physical document can be converted into an electronic document through scanning. A soft copy may also be converted into PDF format and used as an attachment to eform. 8.9-5 Digital Signature The eform should be digitally signed by a person named in the Articles as a director, manager or secretary of the company duly authorised by the Board. (Refer Chapter 360 for Digital Signature Certificate) 8.9-6 Filing and Registration fee Filing fee should be paid for Memorandum of Association, Articles of Association and eform 1. In addition, fee for registration of the company shall be paid. The fees shall be as per Schedule X of the Companies Act, 1956 (Appendix 9). 8.9-7 Exemption from Registration fee Registration fee need not be paid if it is not proposed to register as a limited company or if before its registration as a limited company,the liability of shareholders was limited by some other Act of Parliament or any other Indian Law or by an Act of Parliament of the United Kingdom, Royal Charter or Letters Patent in force in India. 8.9-8 Mode of Payment The fee should be paid through one of the specified modes viz., remittance in authorised banks, credit card or through internet banking. In case of online payment, filing process shall be complete immediately and a receipt is generated by the system. (See Appendix 18). 8.9-9 Procedure in case of off-line payment In case of remittance through authorised bank, a pre-filled challan containing the SRN, date of challan, expiry date, name and designation of user by whom challan is tendered, name and address of the company, particulars of remittance, total amount and Head of account shall be generated by the system. The challan should be used for making payment before the date of expiry mentioned therein and the transaction shall be completed by the concerned banks. 8.9-10 Non-payment of fee before due date If the payment is not made by pay by date mentioned in challan, submission of form shall be regarded as incomplete and an e-mail will be sent to the applicant that the form cannot be regarded as filed due to non-payment. The status of payment can be verified through MCA portal. 8.9-11 Filing instructions Refer Chapter 358 for detailed instructions for filing e-forms. 8.10 Submission of eform 39 with the Registrar Simultaneously, an application in eform 39 (Annex 8.4 for specimen filled in form) should be filed with the Registrar of Companies through MCA Portal. This form is not required if it is proposed to register as unlimited company. 8.10-1 Who can file? The eform 39 shall be filed by two directors of the company duly authorised by the Board and holding valid Digital Signature Certificate. 8.10-2 Attachments The following documents should be attached to the eform u Copy of the resolution of the general meeting (Annex 8.1) assenting to registration with limited liability u Copy of the resolution of the general meeting (Annex 8.2) declaring the amount of guarantee, where applicable u List of equity or preference shareholders in standard format as described in Schedule V. 8.10-3 How to attach documents? The attachments shall be in PDF format. A physical document can be converted into an electronic document through scanning. A soft copy may also be converted into PDF format and used as an attachment to eform. 8.10-4 Digital Signature The eform should be digitally signed by two directors duly authorised by the Board. 8.10-5 Filing fee Filing fee shall be as per Schedule X of the Companies Act, 1956 (Appendix 9). 8.10-6 Mode of Payment The fee should be paid through one of the specified modes viz., remittance in authorised banks, credit card or through internet banking. In case of online payment, filing process shall be complete immediately. (See Appendix 18) 8.10-7 Procedure in case of off-line payment In case of remittance through authorised bank, a pre-filled challan containing the SRN, date of challan, expiry date, name and designation of user by whom challan is tendered, name and address of the company, particulars of remittance, total amount and Head of account shall be generated by the system. The challan should be used for making payment before the date of expiry mentioned therein and the transaction shall be completed by the concerned banks. 8.10-8 Non-payment of fee before due date If the payment is not made by pay by date mentioned in challan, submission of form shall be regarded as incomplete and an e-mail will be sent to the applicant that the form cannot be regarded as filed due to non-payment. The status of payment can be verified through MCA portal. 8.10-9 Filing instructions Refer Chapter 358 for detailed instructions for filing e-forms. 8.11 Filing of eform 1 with the Registrar of Companies in case of firms In case of partnership firms proposed to be registered as joint stock company under Part IX, a declaration as per eform 1 (Refer Para 2.10 for procedures and Annexes 2.6 and 2.7 for specimen forms) should be filed with the Registrar of Companies. 8.12 Filing of eform 32 with the Registrar of Companies In case of partnership firms, a return containing particulars of directors as per eform 32 (Refer Para 2.11 for procedures and Annexes 2.8 and 2.9 for specimen forms) should be filed with the Registrar of Companies. 8.13 Filing of eform 18 with the Registrar of Companies In case of firms a declaration as per eform 18 (Para 2.12 for procedures and Annex 2.10 for specimen forms) should be filed with the Registrar of Companies. 8.14 Uploading of eforms All the eforms should be filed one by one for which the system will display a message. A combined receipt (in case of on-line payments) or challan (in case of off-line payment) shall be generated by the system. 8.15 Certificate of Registration On compliance with the requirements with respect to registration, the Registrar of Companies shall certify under his hand that the company applying for registration is incorporated as a company under the Companies Act, 1956 and in the case of a limited company that it is limited and thereupon, the company shall be so incorporated. When a company is registered with limited liability, the words “Limited” or “Private Limited” as the case may be, shall form the last word or words of its name and shall be registered as such. 8.16 Effect of Registration under Part IX On such registration, all property, movable and immovable (including actionable claims), belonging to or vested in a company at the date of its registration, shall vest in the company as incorporated under this Act for all the estate and interest on the company therein. The registration shall not affect its rights or liabilities in respect of any debt or obligation incurred, or any contract entered into, by, to, with or on behalf of, the company before registration. All suits and other legal proceedings taken by or against the company, or any public officer or member thereof, which are pending at the time of registration may be continued in the same manner as if the registration had not taken place. 8.17 Applicability of Act to Part IX Companies When a company is registered under this Part, all provisions contained in any Act of Parliament or other Indian Law or other instrument constituting or regulating the company, including the resolution declaring the amount of guarantee [in case of companies limited by guarantee] shall be deemed to be the regulations of the company as if the company has been formed under this Act. Further, all the provisions of the Act shall apply to the company and the members, contributories and creditors in the same manner in all respects as if it had been formed under this Act, subject to the following : u Table A in Schedule I shall not apply unless it is adopted by special resolution. u The provisions of the Act relating to numbering of shares shall not apply to any joint stock company whose shares are not numbered. u The company shall not have any power to alter any provision contained in any Act of Parliament or other Indian Law relating to the company. u The company shall not have power, without the sanction of the Central Government, to alter any provision contained in any Act of Parliament of the United Kingdom, Royal Charter or Letters Patent, relating to the company. u The company shall not have power to alter any provision contained in any Act of Parliament or other Indian Law or in any Act of Parliament of the United Kingdom, Royal Charter or Letters Patent, with respect to the objects of the company. u In the event of the company being wound up, every person, who is liable to pay or contribute towards debts or liabilities contracted before registration or adjustment of rights of members among themselves or cost, charges and expenses of winding up shall be a contributory in respect of debts and liabilities of the company contracted before registration. u In the event of the company being wound up, every contributory shall be liable to contribute to the assets of the company all sums due from him in respect of any liability. In case of his death or insolvency, the liabilities shall devolve on legal representatives or assignees as the case may be. u The provisions of the Act with reference to— (i) the registration of unlimited company as a limited company, (ii) the powers of an unlimited company to increase the nominal amount of capital, (iii) the powers of an unlimited company to provide that a portion of share capital shall not be capable of being called up except in the event of winding up, (iv) the powers of a limited company to provide that a portion of share capital shall not be capable of being called up except in the event of winding up, shall apply notwithstanding any provisions contained in any Act of Parliament or other Indian Law, or other instrument constituting or regulating the company. u The company shall not alter any provision contained in any instrument constituting or regulating the company as would, if the company had originally been formed under this Act, have been required to be contained in the memorandum and are not authorised to be altered by this Act. u Where an order has been made for winding up or a provisional liquidator has been appointed for a company registered in pursuance of this Part, no suit or other legal proceedings shall be proceeded with or commenced against the company or any contributory of the company in respect of any debt of the company, except by leave of the Court1 and except on such terms as the Court may impose. 1. The powers of court in this regard shall stand transferred to National Company Law Tribunal when the Companies (Second Amendment) Act, 2002 is brought into force and the Tribunal is constituted. ANNEX 8.1 (Refer Paras 8.6 and 8.8) SPECIAL RESOLUTION FOR REGISTRATION OF JOINT STOCK COMPANY UNDER PART IX RESOLVED pursuant to proviso (v) to section 565(1) and section 579(1) of the Companies Act, 1956, that the Company which had originally been incorporated under a Royal Charter granted by Her Majesty Victoria the Queen of England in 1882 be and is hereby registered under the Companies Act, 1956, and the existing Charter regulating the constitution of the Company be and is hereby substituted by the memorandum and articles of association, a copy whereof is placed before the meeting, pursuant to the approval of the Central Government for the replacement of the Royal Charter in terms of section 578(3)(d) of the said Act, vide No........ dated received by the Company Explanatory statement As the shareholders are aware, the Company started tea plantation as one of the pioneer entrepreneurs in the field in the north-eastern part of India and came into existence by a Royal Charter granted by Her Majesty Victoria the Queen of England on 22nd March, 1882. Now the shareholders are all the Indian residents, it is the intention of your Board of Directors to register the Company under the Companies Act, 1956. The Royal Charter which governs the constitution of the Company is outdated and mostly unworkable. It is, therefore, proposed to substitute the same by the memorandum and articles of association which is more in conformity with the present and future requirements. Although the registration of the Company can be effected by passing an ordinary resolution in terms of proviso (v) to section 565(1), a special resolution is required to be passed for substituting the existing Charter by a memorandum and articles of association. Hence, the resolution is proposed as a special resolution. The Royal Charter mentioned above and the proposed memorandum and articles of association are available for inspection at the registered office of the Company on any working day during business hours. The Central Governments’ approval cited in the resolution is available for inspiration of members at the registered office of the company on any working day during business hours. ANNEX 8.2 (Refer Para 8.8.1) SPECIMEN RESOLUTION FOR DECLARATION OF AMOUNT OF GUARANTEE We, the members of PQR Limited, do hereby undertake to contribute to the assets of the company, in the event of its being wound up, while we are members or within one year after the individual member ceases to be a member, for payment of the debts and liabilities of the company of such debts and liabilities as may have been contracted before he ceases to be a member, and of the cost, charges and expenses of winding up, and for the adjustment of the rights of contributories among themselves such amount as may be required, but not exceeding 5000. Date : Place : Signature of members with addresses ABC Association Partnership Deed dated 1/3/2001 Partnership Deed (i) List of members as on 31-3-2006 in Form No. 39 3 3 3 3 ANNEX 8.3 (Refer Para 8.9) e-FORM NO. 37 Application by an existing joint stock company or by an existing company (not being a joint stock company) for registration as a public limited or private limited or an unlimited company [Pursuant to sections 565, 566, 567 and 568 of the Companies Act, 1956] Note - All fields marked in * are to be mandatorily filled. 1. *Please specify the type of company Existing company Joint stock company 2. *Form 1A reference number Pre-fill 3. *Name of the company 4. Name of the proposed company 5. *Date of instrument constituting the company (DD/MM/YYYY) 6. *Description of the instrument Royal charter granted by the Majority Queen Victoria Attachments 1. *Copy of the instrument constituting or regulating the company - Attach 2. Optional attachment(s), if any Attach List of attachments Remove attachment Declaration To the best of my knowledge and belief, the information given in this application and its attachments is correct and complete. I am duly authorised to sign and submit this form. To be digitally signed by Managing director or director or manager or secretary of the company ABC Association Pvt. Ltd. A05769161 01/03/1896 Modify Check Form Prescrutiny Submit For office use only This e-Form is hereby registered Digital signature of the authorising officer Submit to BO MCA’s Instructions for filling of e-Form 37 Keep the following instructions in view : S. No. Detailed Instructions Note: Instructions are not provided for the fields which are self-explanatory Refer the relevant provisions of the Companies Act, 1956 and rules made thereunder with respect to the matter dealt in this eform 1. Select the type of the company i.e. ‘Existing company’ or ‘Joint stock company’. Details for ‘Joint stock company’ are given in sections 565 and 566 of the Companies Act, 1956. n You may find the Companies Act, 1956 at the portal www.mca.gov.in 2. Enter eform 1A reference number/Service request number (SRN) filed for name availability and click ‘Pre-fill’ button. 3. Enter the name of the company applying for registration. 4. System will automatically display the name of the proposed company. 5.-6. Enter the date of the instrument and its description through which the existing company or joint stock company has been constituted. Attachments n Copy of the instrument constituting or regulating the company is to be attached. n Any other information can be provided as an optional attachment. Digital This eform should be digitally signed by managing director or director or Signature manager or secretary of the company duly authorised by the board of directors. Note : See also MCA’s Common Instruction Kit. (See Appendix 3) ABC Association 20,000 100 — 31/03/2006 01/04/2006 31/03/2006 1. Fill the Service Request Number of e-form 1A. 40, Rotary Club Road M.R. Nagar, Chennai ANNEX 8.4 (Refer Para 8.10) e-FORM NO. 39 Registration of an existing company as a limited company [Pursuant to sections 565(1), 567(a) and (c) and 568(a) of the Companies Act, 1956] Note - All fields marked in * are to be mandatorily filled. 1. *Form 1A reference number Pre-fill 2. Name of the company 3. (a) Number of shares taken upto date (DD/MM/YYYY) Equity Preference (b) Amount paid on each share Equity (in Rs.) Preference (in Rs.) PART A List of members (pursuant to section 567) Please attach a separate list for the equity or preference shareholders 4. List of members upto the date (DD/MM/YYYY) 5.(a) Date of resolution declaring the amount of guarantee (DD/MM/YYYY) (b) Amount of guarantee (in Rs.) PART B Resolution assenting to registration with limited liability [Pursuant to section 565(1) proviso, clauses (vi) and (vii)] Please attach a copy of resolution 6. *Date of general meeting passing the resolution assenting to registration with limited liability (DD/MM/YYYY) 7. *Place of general meeting 5,000 for each member A057691611 ABC Association 3 3 3 Members, directors and manager of the company 3 Verification We being the directors of do solemnly and sincerely declare that the particulars set forth in the several documents accompanying this declaration are true to our knowledge in regard to the particulars* and true to the best of our information and belief in regard to the other particulars. Attachments 1. *A copy of resolution passed at the general meeting assenting to registration with limited liability. Attach 2. A copy of the resolution declaring the amount of guarantee Attach 3. List of equity or preference shareholders in standard format as described in Schedule V Attach 4. Optional attachment(s), if any Attach (a) List of members (b) List of name, addresses and occupations of directors and manager List of attachments Remove attachment Declaration To the best of our knowledge and belief, the information given in this form and its attachments is correct and complete. We are duly authorised to sign and submit this form. To be digitally signed by Two directors of the company Modify Check Form Prescrutiny Submit 3 For office use only This e-Form is hereby registered Digital signature of the authorising officer Submit to BO MCA's Instructions for filling of e-Form 39 Keep the following instructions in view : S. No. Detailed Instructions Note: Instructions are not provided for the fields which are self-explanatory Refer the relevant provisions of the Companies Act, 1956 and rules made thereunder with respect to the matter dealt in this eform 1.-2. Enter ‘eform 1A-reference number/Service request number’ (SRN) filed for name availability and click ‘pre-fill’ button. System will automatically display the name of the company as available through eform 1A. PART A 4. Enter the date up to which the list of members of equity and preference shareholders has been prepared and to be attached. PART B 6.-7. Enter the date and place of general meeting where the resolution has been passed by members for the registration with limited liability. Verification Enter the fields number out of 1 to 7 of the eform in which details has been filled, for which the directors declare that the detail filled are based on their knowledge and remaining fields are based on their information and belief. Attachments n A copy of resolution passed at the general meeting assenting to registration with limited liability is to be attached. n Copy of resolution declaring the amount of guarantee is to be attached. n List of equity and preference shareholder separately in the format as described in Schedule V is to be attached. n Any other information can be provided as an optional attachment. Digital The eform should be digitally signed by two directors of the company duly Signature authorised by the board of directors.
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