Requirement of rule 12 declaration for company regsitration

This query is : Resolved

CA A. K. AKASH (Querist)
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27 December 2022 Whether rule 12 declaration for company registration is required for following objects:
To carry on the business of an investment Company and/or a holding Company and invest in startups, real estate, stock market, IT advisory and/or consultancy, or otherwise deal in shares, stocks, units, debentures, debenture-stock bonds, securities of any kind issued or guaranteed by any company, corporation or undertaking of whatever nature, whether incorporated or otherwise, and wheresoever constituted, or carrying on business of immovable property and rights directly or indirectly connected therewith and/or bullion, including gold, silver and other precious metals, and/or precious stones such as diamonds, rubies, and/or any other asset.

Asha Kanta Sharma

Asha Kanta Sharma

(Expert)
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10 July 2024 Yes, Rule 12 declaration is required for the stated objects of the company registration, especially if the company is engaged in a combination of activities such as investment in startups, real estate, stock market, IT advisory, and consultancy, as well as dealing in shares, stocks, debentures, and other securities.

Rule 12 of the Companies (Incorporation) Rules, 2014, mandates that certain companies need to provide a declaration specifying the main objects of the company, which must include all the activities that the company intends to carry out after its incorporation. The declaration is typically a part of the Memorandum of Association (MoA) and is filed with the Registrar of Companies (RoC) during the incorporation process.

Given the diverse nature of activities mentioned in your query (investment in startups, real estate, stock market, etc.), it is crucial to accurately declare these activities in the MoA. This ensures compliance with legal requirements and clarity regarding the scope of the company's operations. It also helps in determining the regulatory framework applicable to the company, such as licensing requirements, if any, for specific activities.

Therefore, when preparing the MoA and Rule 12 declaration for your company registration, ensure that all intended business activities are clearly and comprehensively listed to avoid any ambiguity or regulatory issues later on. If the company intends to engage in multiple diverse activities as described, it's prudent to consult with a legal professional or a company secretary to ensure compliance with applicable laws and regulations.