28460050 Steps for Formation of a Company

8/2/2019 28460050 Steps for Formation of a Company

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Introduction

A company can be defined as a group of persons associated together for

the purpose of carrying on a business, with a view to earn profits. However,

one must remember that companies may also be formed for the promotion

of commerce, art, science, religion or charity or any useful object under the

Companies Act.

Lord Justice Lindley defines the company as A company is an

association of many persons who contribute money or moneys worth to a

common stock and employ it in some trade or business and who share a profit

and loss arising there from. The common stock so contributed is denoted in

money and is the capital of the company. The people who contributeit or to

whom it belongs are members. The proportion of capital to which each

member is entitled is his share. The shares are always transferable although

the right to transfer is often more or less restricted.

A company, formed and registered under the Company Act, is

regarded by law as a single person, having specified rights and obligations.

The law confers on a company a distinct legal personality, with perpetual

succession and a common seal.


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Public Limited CompanyA public company is defined as a company which is not a private company.

The following conditions apply only to a public company:

It must have at least seven shareholders.

It must have minimum paid-up capital of Rs 5,00,000

It must publish a prospectus or file a statement in lieu of a prospectusbefore it can start transacting business.

A public company is required to have at least three directors.

It must hold statutory meetings and obtain government approval for

the appointment of the management. A public company is not

authorized to start business upon the grant of the certificate of

incorporation. In order to be eligible to commence business as a

corporation, it must obtain another document called "trading

certificate.

It must have at least 3 directors. In the case of public company, the directors must file with the

registrar consent to act as a director or sign an undertaking for their

qualification shares.


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The essential steps for the

formation of a

COMPANYPersons desirous of forming a company must adhere to the step by step

procedure as discussed below:-

1. Selection of type of the company.

2. Selection of name for the proposed company.

3. Apply for Directors Identification Number and Digital Signatures.

4. Drafting of Memorandum and Articles of Association.

5. Stamping, digitally signing and e-filing of various documents with theRegistrar.

6. Payment of Fees.

7. Obtaining Certificate of Incorporation.

8. Preparation and filing of Prospectus/Statement in lieu of Prospectus

and e-Form 19/20 (in case of public companies) for obtaining the

certificate of commencement of business.

9. Obtaining Certificate of Commencement of business (in case of public

limited companies).


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...Next

Persons desirous of forming a company must adhere to the step bystep procedure as discussed below:-

1. Selection of type of the company.

2. Selection of name for the proposed company.

3. Apply for Directors Identification Number and Digital

Signatures.

4. Drafting of Memorandum and Articles of Association.

5. Stamping, digitally signing and e-filing of various documents

with the Registrar.

6. Payment of Fees.

7. Obtaining Certificate of Incorporation.

8. Preparation and filing of Prospectus/Statement in lieu ofProspectus and e-Form 19/20 (in case of public companies) for obtaining

the certificate of commencement of business.

9. Obtaining Certificate of Commencement of business (in case of

public limited companies).


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1. Selection of the type of company

The Promoters of a company may be individual entrepreneurs or

body corporate engaged in efforts to incorporate a company. They have the

power of defining the object of the company and deciding various matters

for the company proposed to be incorporated. It is depending upon, the

purposes for which the company is to be incorporated, proposed scale of

operations, capital involved, etc. The promoters can select type of the

company as they wish to form themselves into viz. private company, public

company, non-profit making company, etc.

2. Selection of name

Six names are required to be selected in order of preference after

taking notes of numerous provisions, clarifications, circulars and rules

made by the Ministry of Corporate Affairs, etc. In case key word is required,

significance of each key word should be given in the e-Form 1A.

2.1 Applying for ascertaining the availability of the selected name

The promoters are required to make an application to the concerned

Registrar of Companies to be submitted electronically to the Ministry of

Corporate Affairs on the portal of MCA. An application shall be in e-Form

1A as prescribed by Notification No. GSR 56(E) dated 10th Feb., 2006 duly

digitally signed by any one promoter or managing director or director or

manager or secretary of the company along with the required fee forascertaining whether the selected name is available for adoption by the

promoters of the proposed company.

2.2 Approval of the name

After receipt of completed application in e-Form 1A, the Registrar

shall intimate whether the proposed name is available for adoption or not.

The confirmation of the name made available by the Registrar shall be validfor a period of six months.In case, if the promoters fail to submit all the


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required documents for incorporation within that period, then they are

required to submit another application after payment of requisite fees.

3. Requirement for having DIN

As per proviso to section 253 of the Companies Act, 1956, inserted by

the Companies (Amendment) Act, 2006, w.e.f. 1-11-2006, no company shall

appoint or re-appoint any individual as director of the company unless he

has been allotted a Director Identification Number under section 266B.

New section 266A has been inserted by the Companies (Amendment)

Act, 2006 which provides that every individual, intending to be appointed

as director of a company shall make an application for allotment of Director

Identification Number (DIN) to the Central Government in the prescribed

DIN Form. Therefore, before submission of e-Form 1A all the directors of

the proposed company must ensure that they are having DIN and if they

are not having DIN, it should be first obtained.

Specific care should be taken that a person cannot have more than

one DIN, therefore, a DIN once obtained shall serve the requirement for all

the companies in which he is a director or intended to be a director.

3.1 Requirement for having digital signatures

After 16th Sept., 2006, every documents prescribed under the Companies

Act, 1956 is required to be filed with the digital signature of the managing

director or director or manager or secretary of the Company, therefore, it is

compulsorily required to obtain digital signatures of at least one director to

sign the e-Form 1A and other documents. It may be noted that if the

director or other persons covered are having digital signatures, their

signatures may be used for the above said purpose and there is no need

take new signature again.


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4. Preparation of the Memorandum of Association

(MOA) and Articles of Association (AOA)

Drafting of the MOA and AOA is generally a step subsequent to the

availability of name made by the Registrar. It should be noted that the main

objects should match with the objects shown in e-Form. These two

documents are basically the charter and internal rules and regulations of

the companies. Therefore, they must be drafted with utmost care with the

experts advise and the other object clause should be drafted in a verybroader sense.

5. Filing of documents with the Registrar

Next step for the promoters is to file the following documents withthe Registrar for incorporation of the company. The following documents

shall be submitted to the Registrar alongwith the adequate filing fees as

applicable for registration of the company online with in a period of six

months from the date of intimation of availability of name:-

1. Memorandum of Association, duly signed by the subscribers

and witnessed, showing the number of shares against their names

electronically attached in PDF file. It should also be properly stamped as

per the stamp duty applicable in the State, where the registered office of

the company is to be situated.Simultaneously original stamped copy of the

Memorandum of Association shall be submitted with the Registrar of

Companies concerned.

2. Articles of Association should be duly signed by the subscribers

and witnessed, showing the number of shares against their names

electronically. It should be properly stamped according to the authorized

share capital as per the stamp duty applicable in the state, where the


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registered office of the company to be situated. Simultaneously original

stamped copy of the Memorandum of Association shall be submitted with

the Registrar of Companies concerned.

3. Copy of the agreement, if any, which the company proposes to,enter in to with any individual for appointment as its managing or whole-

time director or manager shall be attached in the PDF file.

4. Declaration in e-Form 1 by an advocate or company secretary

or chartered accountant engaged in whole time practice in India or by a

person named in the Articles as a director, manager or secretary of the

company, that all the requirements of the Companies Act, 1956 and the

rules made thereunder have been complied with in respect of registration

and matters precedent and incidental thereto, which may be accepted bythe Registrar as sufficient evidence of such compliance. It should be

carefully noted that details of all the companies in which directors are also

director should be given and the names, addresses and other particulars of

directors and promoters should be matched with the information provided

in the DIN application Form. [ Section 33(2)] (Appendix 2).

5. Power of Attorney for should be furnished by all the

subscribers in favour of any one subscriber or any other person authorising

him to file these documents and to with the Registrar and to obtain

certificate of incorporation. The power of attorney should be given on Non-

Judicial stamp paper of appropriate value and shall be submitted to the

Registrar. (Appendix 3).

6. Other agreement if any, which has been stated in the

Memorandum or Articles of Association shall also be filed in the PDF file

with the Registrar because in such cases the agreement will form part of

this basic document.

7. E-Form 18 is to be filed with the Registrar electronically withthe digital signatures in regard to location of the registered office. E-Form

18 shall also be certified by the company secretary or chartered accountant

or cost accountant in whole time practice. [ Section 146 (2)] (Appendix 4)

8. E-Form 32 is required to be filed with the Registrar

electronically for filing particulars of directors. The personal details should

match with the information provided in the DIN. Following additional

details are also required to given in e-Form 32:


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(a) Name and CIN of all the companies in which they are directors;

(b) Names of partnership concerns in which they are partner;

(c) Names of proprietorship concerns in which they are

proprietor;

6.Payment of registration fees for a new company

The fees payable to the Registrar at the time of registration of a new

company varies according to the authorized capital of a company proposed

to be registered as per Schedule X to the Act. Fees can be calculated by the

MCA portal.

7. Certificate of Incorporation (section 33 and 34)

On the satisfaction of the Registrar that the requirements specified in

sections 33(1) and 33(2) have been complied with by the company, he shall

retain the documents and register the MOA, AOA and other documents.

Section 34(1) cast an obligation on the Registrar to issue a Certificate of

Incorporation, normally within 7 days of the receipt of documents.

8. Commencement of Business

A Private limited company and a company not having share capital

may commence its business activities from the date of its incorporation.

However, a public Limited Company having share capital is required to

take certificate of commencement of business before it can commence

business.


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PROCEDURE OF

REGISTRATION

For the registration of a company, the following documents, together with the necessary

fees, must be submitted to the registrar of companies of the state in which the

registered office of the company will be situated-Sec 33.

1. Memorandum of Association, prepared in accordance with provision of the

Companies Act, and signed by the least 7 persons in the case of public companies

and 2 persons in the case of private companies.

2. The Articles of Association, in case of unlimited companies, companies

limited by guarantee and private companies limited by shares.3. A declaration by any of the following persons, stating that all the

requirements of the act have been compiled with an advocate, an

attorney a pleader, a chartered accountant, or a person named in the

articles as director, manager, or secretary of the company.

4. The duly signed list of persons have consented to be directors of the

company, their consent in writing and the signed agreement with

every such director to take the number of shares required to qualify

as directors of the company. These are not required in the case of

private companies and the companies not having a share capital.5. The registration fees of a company are fixed on the graduated scale

on the amount of nominal capital or the number of members. There is

also a filing fee per document.

If the Registrar is satisfied that all the required documents of the act have

been compiled with, he will register the company and issue a certificate

called the Certificate of Incorporation


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MEMORANDUM OF ASSOCIATION

1. Name Clause: JRD Textiles Ltd.2. Registered Office Clause: Phagwara, Jalandhar.3. Object Clause:Main Object: To produce cloth of suitable quality textile sector.

To multiply such units at locations convenient to cotton rising.

To import cotton and export cloth.

To assist Government in taking up to increase production of cotton.

To establish, extend and re-organize extension centers in collaboration with StateGovernment or a for improving the quality and increasing the production of cotton

Other Object:

To develop new techniques to increase production.

To employ and remunerate experts to investigate and examine into the condition,

prospects, value, character and circumstances, of any business of industrial concern orundertaking dealing in industries based on cotton.

To adopt such means of making known the uses of equipment and machinery relatingto industries based on cotton pesticides, homicide etc. by advertising in press,

publication of books, magazines, periodicals, posters, pictures, instructions on site,holding seminars etc.

To establish training centre where employees can get training.

4. Area of Operation Clause: Phagwara, Jalandhar5. Liability Clause: Limited by shares.6. Capital Clause: Rs,120000000 (Rupees twelve crore only.)7. Association and subscription Clause:

ARTICLES OF ASSOCIATION


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SHARE CAPITAL AND INCREASE AND REDUCTION OF CAPITAL

The Authorized Share Capital of the company is Rs. 120000000 (Rupees Twelve Crore

only) divided into 1200000 (Twelve lacs) Equity Shares of Rs. 100 each (Rupees Hundred

each) with powers to increase or reduce the same in accordance with the provisions of theCompanies Act, 1956.

Increase of capital of the companyThe Company in General Meeting, may from time to time, increase its capital by the creation

of new shares, such increase to be of such aggregate amount and to be divided into shares of

such amounts as the resolution shall prescribe.

Allotment otherwise than for cashSubject to the provisions of the Act and these Articles, the Directors may allot and issue

shares in the capital of the Company as payment or part-payment for any property or assets of

any kind whatsoever, sold or to be sold or transferred or to be transferred or for goods ormachinery supplied or to be supplied or for services rendered or to be

rendered or for technical assistance or know-how made or to be made available to the

Company or the conduct of its business and shares which may be so allotted may be issued as

fully or partly paid-up otherwise than in cash and if so issued, shall be deemed to be fully or

partly paid as the case may be.

Additional capital to form part of existing capitalExcept so far as otherwise provided by the conditions of issue or by these presents, any

capital raised by the creation of new shares, shall be considered as part of the existing capital.

Redeemable preference sharesSubject to the provisions of Section 80 of the Act, the Company shall have the power to issue

Preferential Shares

Which are or at the option of the Company are to be liable to be redeemed and the resolution

authorizing such issue

Shall prescribe the manner, terms and conditions of redemption.

Reduction of capitalThe Company may (subject to the provisions of Sections 78, 80, 100 to 105 inclusive, of the

Act) from time to time by Special Resolution, reduce its capital and any Capital Redemption

Reserve Account or Share Premium Account in any manner for the time being authorized bylaw, and in particular, capital may be paid off on the footing that it may be called up again or

otherwise

SHARES ANDCERTIFICATESShares to be numbered progressively and no Shares are to be sub-divided: The

shares in the capital shall be numbered progressively according to their several

denominations and except in the manner herein before mentioned no share shall be sub-

divided.

Shares at the disposal of the Directors: Subject to the provisions of these Articles andthe Act, the shares in the capital of the Company for the time being (including any shares


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forming part of any increased capital of the Company) shall be under the control of the

Directorswho may issue, allot or otherwise dispose of the same or any one of them to suchpersons in such proportion and on such terms and conditions. The shares can be issued at a

discount and at such times as they may from time to time think fit and proper and with the

sanction of the Company in General Meeting to give to any person the option to call for or

allotted shares of any class of the Company either at par or at premium or subject as aforesaidat a discount during such time and for such consideration and such option being exercisable

at such times as the Directors think fit; and any shares which may be so allotted may be

issued as fully paid-up shares and if so issued shall be deemed to be fully paid-up shares. The

Board shall cause to be filed the returns as to allotment provided for in Section 75 of the Act.

Provided that the option or right to call of shares shall not be given to any person except with

the sanction of the company in the General Meeting.

Acceptance of sharesAny application signed by, or on behalf of, an applicant for shares in the Company followed

by an allotment of any shares therein, shall be an acceptance of shares within the meaning of

these Articles; and every person who thus or otherwise accepts any shares and whose name is

entered in its Register of Members shall, for the purpose of these Articles, be a member of the

Company

Renewal of share certificateNo fee shall be charged for issue of new share certificates in replacement of those which are

old, decrepit, worn out. If a share certificate is lost or destroyed, a new certificate in lieu

thereof shall be issued only with the prior consent of the Board and on payment of such fee,

not exceeding Rupees two as the Board may from time to time fix, and on such terms, if any,

as to evidence and indemnity as to payment of such out-of-pocket expenses incurred by the

Company in investigating evidence, as the Board thinks fit. When a new share certificate hasbeen issued in pursuance of Clause (c) of this Article, it shall state on the face of it and

against the stub or counterfoil to the effect that it is a duplicate issued in lieu of share

certificateNo_________.The word duplicate shall be stamped or punched in bold letters

across the face of the share certificate.

Calls

Directors may from time to time, subject to the terms on which any shares may have been

issued and subject to the conditions of allotment, by a resolution passed at a meeting of the

Board (and not by circular resolution) make such calls as it thinks fit upon the Members in

respect of all monies unpaid on the shares held by them respectively and each member shallpay the amount of every call so made on him to the person or persons and at the time and

place appointed by the Board. A call may be made payable by installments.

Notice of callsThirty days notice in writing of any call shall be given by the Company specifying the time

and place of payment, and the person or persons to whom such calls shall be made.

Calls to date from resolution.A call shall be deemed to have been made at the time when the resolution authorizing such

call was passed at ameeting of the Board.

Call may be revoked


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A call may be revoked or postponed at the discretion of the Board.

Proof on trial or suit for money on sharesOn the trial or hearing of any action or suit brought by the Company against any member or

his legal representativeto recover any moneys claimed to be due to the company for any call

or other sum in respect of his shares, it shall be sufficient to prove:a) That the name of the Member, in respect of whose shares the money is ought to be

recovered, appears entered

In the Register of Members as the holder or one of the holders, at or subsequent to the date at

which the money

Sought to be recovered is alleged to have become due, on the said shares and

b) That the resolution making the call is duly recorded in the minutes books.

FORFEITURE AND SURRENDER OF AND LIEN ON SHARES

If money payable on share not paid then notice is to be given to Members.

If any Member fails to pay any call or installment of call on or before the day appointed

for the payment of the same or any such extension thereof as aforesaid, the Board may,at any time thereafter, during such time as the call or installment remains unpaid, give

notice to him requiring him to pay the same together with any interest that may have

accrued and all expenses that may have been incurred by the Company by reason of

such non-payment.

Terms of notice

The notice shall name a day (not being earlier than the expiry of fourteen days from the

date of service of notice) and a place or places on and at which such call or installment

and such interest thereon at such rate as the Directors shall determine from the day on

which such call or installment ought to have been paid and expenses as aforesaid are tobe paid. The notice shall also state that, in the event of the non-payment at or before the

time and the place appointed, the share in respect of which the call was made or

installment is payable will be liable to be forfeited.

Notice of forfeitureWhen any share shall have been so forfeited, notice of the forfeiture shall be given to the

Member in whose name it stood immediately prior to the forfeiture or to any of his legal

representatives, or to any of the persons entitled to the shares by transmission and an entry of

the forfeiture, with the date thereof, shall forthwith be made in the Register of Members but

no forfeiture, shall be in any manner invalidated by any omission or neglect to give suchnotice or to make such entry as aforesaid. Forfeited shares to become property of the

Company and may be sold, etc.Any share so forfeited shall be deemed to be the property of

the Company and may be sold, re-allotted or otherwise disposed of, either to the original

holder thereof or to any other person, upon such terms and in such manner as the Board shall

think fit.

Members still liable to pay money due notwithstanding the forfeiture

Any member whose shares have been forfeited shall, notwithstanding the forfeiture, be liable

to pay, and shall forthwith pay to the Company on demand all calls, amounts, installments,

interest and expenses owing upon or in respect of such shares at the time of the forfeiture,


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together with interest thereon from the time of the forfeiture until payment, at such rate as the

Board may determine and the Board may enforce the payment thereof if it thinks fit.

Effect of forfeitureThe forfeiture of a share shall involve extinction, at the time of the forfeiture, of all interest in

and of all claims and demands against the Company, in respect of the share, and all otherrights incidental to the share, except only such of those rights as by these Articles are

expressly saved.

Surrender of sharesThe Directors may subject to the provisions of the Act, accept a surrender of any shares from

or by any member

Desirous of surrendering them on such terms as they think fit.

Cancellation of share certificate in respect of forfeited sharesUpon any sale, re-allotment or other disposal under the provisions of the preceding Articles,

the certificate or certificates originally issued in respect of the relative shares shall (unless thesame shall on demand by the Company have been previously surrendered to it by the

defaulting Member) stand cancelled and become null and void and of no effect, and the

Directors shall be entitled to issue a new certificate or certificates in respect of the said shares

to the person or persons entitled thereto.

TRANSFER AND TRANSMISSION OF SHARES

Register of TransfersThe company shall keep a Register of Transfers and shall have recorded therein fairly and

distinctly particulars of every transfer or transmission ofany share held in material form.

Form of transferShares in the Company shall be transferred by an instrument in writing in such form as

prescribed under Section 108 of the Companies Act, 1956, or under rules made there under

from time to time.

To be executed by Transferor and TransfereeThe instrument of transfer duly stamped and executed by the transferor and the transferee

shall be delivered to the Company in accordance with the provisions of the Act. The

instrument of transfer shall be accompanied by such evidence as the Board may require

proving the title of the transferor and his right to transfer the shares and every registeredinstrument of transfer shall remain in the custody of the Company until destroyed by an order

of the Board. The transferor shall be deemed to be the holder of such shares until the name of

the transferee shall have been entered in the Register of Members in respect thereof. Before

the registration of a transfer, the certificate or certificates of the shares must be delivered to

the Company.

Title to shares of deceased MemberThe executors or administrators or holders of a Succession Certificate or the legal

representatives of a deceased member shall be the only person recognized by the Company as

having any title to the shares registered in the name of such Member, and the Company shall

not be bound to recognize such executors or administrators or holders of a SuccessionCertificate or the legal representatives unless such executors or administrators or legal


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representatives shall have first obtained Probate or Letter of Administration or Succession

Certificate, as the case may be, from a duly constituted court in the Union of India provided

that in case where the Board in its absolute discretion think fit, the Board may dispense with

production of Probate or Letters of Administration or Succession Certificate, upon such terms

as to indemnity or otherwise as the Board in its absolute discretion may think necessary and

under Article 59 register the name of any person who claims to be absolutely entitled toshares standing in the name of a deceased Member, as a Member.

BORROWING POWERS

Power to BorrowSubject to the provisions of Sections 58A, 292 and 293 of the Act and of these Articles, the

Board may, from time to time at its discretion, by a resolution passed at a Meeting of the

Board accept deposits from Members, either in advance of call or otherwise, and generally

raise or borrow or secure the payment of any sum or sums of money for the purposes of the

company provided however, where the moneys to be borrowed together with the moneys

already borrowed exceed the aggregate of the paid up capital of the Company and its freereserves the Board shall not borrow such moneys without the consent of the Company in

General Meeting.

The payment or repayment of borrowed moneyThe payment or repayment of moneys borrowed as aforesaid may be secured in such manner

and upon such terms and conditions in all respects as the Board may think fit.

Terms of issue of debenturesAny debentures, debenture-stock or other securities may be issued at a discount, premium or

otherwise and maybe issued on condition that they or any part of them shall be convertible

into shares of any denomination, and with any privileges and conditions as to redemption,

surrender, drawing, allotment of shares and attending General Meetings, appointment of

Directors and otherwise. Debentures with a right to conversion or allotment of shares shall be

issued only with the consent of the Company in General Meeting.

SHARE WARRANT

Power to issue share warrantsThe Company may issue share warrants subject to, and in accordance with the provisions of

sections 114 and 115, and accordingly the Board may in its discretion, with respect to any

share which is fully paid-up on application in writing signed by the persons registered asholder of the share, and authenticated, by such evidence (if any) as the Board may, from time

to time, require as to the identity of the person signing the application, and on receiving the

certificate (if any) of the share, and the amount of the stamp duty on the warrant and such fee

as the Board may from time to time require, issue a share warrant.

Deposit of share warrantThe bearer of a share warrant may at any time deposit the warrant at the office of the

Company, and so long asname were inserted in theRegister of Members as the holder of theshare included in the deposited the warrant remains so deposited, the depositor shall have the

same right of signing a requisition for calling a meeting of the Company, and of attending,

and voting and exercising the other privileges of a Member at any meeting held after theexpiry of two clear days from the time of deposit as if his warrant.


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The bearer of a share warrant shall be entitled in all other respects to the same privileges and

advantages as if he was named in the Register of Members as the holder of the share included

in the warrant, and shall be a Member of the Company.

Issue of new Share Warrant or Coupon

The Board may, from time to time, make rules as to the terms on which (if it shall think fit) anew share warrant or coupon may be issued by way of renewal in case of defacement, loss or

destruction.

CONVERSION OF SHARE INTO STOCK AND RECONVERSION

Shares may be converted into stockThe Company in General Meeting may convert any paid-up shares into stock; and when any

shares have been converted into stock, the several holders of such stock may thenceforth

transfer their respective interest therein, or any part of such interest, in the said manner and

subject to the same Regulations as, and subject to which shares from which the stock arose

might have been transferred if no such conversion had taken place, or as near thereto ascircumstance will admit. The Company may at any time reconvert any stock into paid-up

shares of any denomination.

Right of stockholdersThe holders of stock shall, according to the amount of stock held by them, have the same

rights, privileges and advantages as regards dividends, voting at meetings of the Company,

and other matters, as if they held the shares from which the stock arose, but no such privilege

advantage (except participation in the dividends and profits of the Company and in the assets

on winding-up) shall be conferred by an amount of stock which would not, if existing in

shares, have conferred that privilege or advantage.

MEMBERS MEETINGS

Annual General MeetingAnnual General Meeting of the company may be convenedsubject to Section 166 and Section 210 of the Act by giving not less than 21 days notice in

writing. Subject to the provisions of Section 171 (2) a meeting may be convened after giving

a shorter notice.

Extra ordinary General MeetingThe Board may, whenever it thinks fit, call an Extraordinary General Meeting and it shall do

so upon a requisition in writing by any Member or Members holding in the aggregate not less

than one tenth of such of the paid-up capital; as at that date carried the right of voting in

regard to the matter in respect of which the requisition has been made.

Quorum at General Meeting:Five members present in person shall be a quorum for a General Meeting.A body corporate being a member shall be deemed to be personally present if it is

represented in accordance with Section 187 of the Act. If, at the expiration of half an hour

from the time appointed for holding a meeting of the Company, a quorum shall not be

present, the meeting it convened by or upon the requisition of Members, shall standdissolved, but in any other case the meeting shall stand adjourned to the same day in the next


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week or if that day is a public holiday until the next succeeding day which is not a public

holiday at the same time and place or to such other day at such other time and place within

the city or town in which the Office of the Company is situate as the Board may determine,

and if at such adjourned meeting a quorum is not present at the expiration of half an hour

from the time appointed for holding the meeting, the Members present shall be a quorum, and

may transact, the business for which the meeting was called.The Chairman (if any) of the Directors shall be entitled to take the chair at every General

Meeting, whether Annual or Extraordinary. If there be no such Chairman of the Directors, or

if at any meeting he shall not be present within fifteen minutes of the time appointed for

holding such meeting then the members present shall elect another Director as Chairman and

if no Director be present or if all Directors present decline to take the Chair, then the

members present shall elect one of their members to be the Chairman.

Question at General Meeting how decidedAt any General Meeting a resolution put to the vote of the meeting shall be decided on a

show of hands unless a poll is (before or on the declaration of the result of the show of hands)

demanded by a member or members present in person or by proxy and holding shares in theCompany

Number of votes to which member entitledSubject to the provisions of these Articles and without prejudice to any special privileges or

restrictions as to voting for the time being attached to any class of shares for the time being

forming part of the capital of the Company, every member, not disqualified by the last

preceding Article shall be entitled to be present and to speak and vote at such meeting, and on

a show of hands every member present in person shall have one vote and upon a poll the

voting rights of every member whether present in person or by proxy, shall be in proportion

to his share of the paid-up equity capital of the Company.

DIRECTORSNumber of DirectorsUntil otherwise determined by the company in a General Meeting and subject to the

provisions of Section 252 of the Act, the number of directors (excluding Debenture Directors

and Directors appointed under Article 111 hereof and Alternate Directors) shall not be less

than three nor more than Eighteen. The Board may appoint, from time to time, one or more of

their members to be the Managing Director or Joint Managing Director or Whole time

Director or Deputy Managing Director or Manager of the Company on such terms and on

such remuneration whether by way of salary or commission, or partly in one and partly inanother as they may think fit

Appointment of special DirectorsOn behalf of the Company, whenever Directors enter into a contract with any Government,

Central, State or Local, any Bank or Financial institution or any person or persons

(hereinafter referred to as the appointer) for borrowing any money or for providing any

guarantee or security or for technical collaboration or assistance or for underwriting or

entering into any other arrangement whatsoever the Directors shall have, subject to the

provisions of Section 255 of the Act, the power to agree that such appointer shall have right

to appoint or nominate by notice in writing addressed to the Company one or more Directors

on the Board for such period and upon such conditions as may be mentioned in the agreementand that such Director or Directors may not be liable to retire by rotation nor be required to


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hold any qualification shares. The Directors may also agree that any such Director or

Directors may be removed from time to time by the appointer entitled to appoint or nominate

them and the appointer may appoint another or others in his or their place and also fill in any

vacancy which may occur as a result of any such Director or Directors ceasing to hold that

office for any reason whatsoever. The Directors appointed or nominated under this Article

shall be entitled to exercise and enjoy all or any of the rights and privileges exercised andenjoyed by the Directors of the Company including payment of remuneration and travelling

expenses to such Director or Directors as may be agreed by the Company with the appointer.

Removal of Directors:The Company may (subject to the provisions of Section 284 of the Act) remove any Director

before the expiration of his period of office and appoint another person in his stead.

PROCEEDINGS OF THE BOARD OF DIRECTORS

Meeting of DirectorsThe Directors may meet together as a Board for the dispatch of business from time to timeand shall so meet at least once in every three calendar months and at least four such meetings

shall be held in every year. The Directors may adjourn and otherwise regulate their meetings

as they may think fit.

Notice of Board MeetingsNotice of every meeting of the Board shall be given in writing to every Director for the time

being in India and at his address in India to every other Director.

Quorum

Subject to Section 287 of the Act, the quorum for a meeting of the Board shall be one-third ofits total strength (excluding Directors, if any, whose places may be vacant at the time. and

any fraction contained in that one-third being rounded off as one), or two Directors

whichever is higher. Provided that where at any time the number of interested Directors

exceeds or is equal to two- thirds of the total strength, the number of the remaining Directors,

that is to say, the number of the Directors who are not interested present at the meeting being

not less than two, shall be the quorum during such meeting.

Division of profitsThe profits of the Company, subject to any special rights relating thereto created or

authorized to be created by these Articles, shall be divisible among the Members in

proportion to the amount of capital paid-up or credited as paid-up and to the period during theyear for which the capital is paid-up on the shares held by them respectively.

The Company in general meeting may declare dividendsSubject to the provisions of Section 205 of the Companies Act, 1956 the Company in General

Meeting may declare dividends, to be paid to its Members according to their respective rights

but no dividends shall exceed the amount recommended by the Board, but the Company in

General Meeting may declare a smaller dividend.

Interim Dividend


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The Board may, from time to time, pay to the members such interim dividend as in their

judgment the position of the Company justifies.

Capital paid-up in advance carrying interest not to earn dividendWhere capital is paid in advance of calls, such capital may carry interest but shall not be in

respect thereof confer a right to dividend or participate in profits.

Dividend to be paid pro-rataSubject to the rights of persons, if any, entitled to shares with special rights as to dividends,

all dividends shall be declared and paid according to the amounts paid or credited as paid on

the shares in respect whereof dividend is paid.

Retention of Dividends until completion of transfer under Article 62The Board may retain the dividends payable upon shares in respect of which any person is,

under Article 62 entitled to become a Member, which any person under that Article is entitled

to transfer, until such person shall become a member in respect of such shares or shall duly

transfer the same.

Board ReportThere shall be attached to every such balance sheet a report of the Board as to the state of the

Companys affairs and as to the amounts, if any, which it proposes to carry to any reserves in

such balance sheet and the amount, if any, which it recommends should be paid by way of

dividend; and material changes and commitments, if any, affecting the financial position of

the Company which have occurred between the end of the financial year of the company to

which the balance sheet relates and the date of the report. The Boards report shall so far as is

material for the appreciation of the state of the Companys affairs by its members and will not

in the Boards opinion be harmful to the business of the company or any of its subsidiaries,

deal with any changes which have occurred during the financial year in the nature of the

Companys business, in the Companys subsidiaries or in the nature of the business carried

on by them and generally in the classes of business in which the company has an interest and

any other information as may be required by Section 217 of the Act. The Board shall also

give the fullest information and explanations in its report aforesaid or in an addendum to that

report, on every reservation, qualification or adverse remark contained in the auditors report.

The Boards report and any addendum thereto shall be signed by its Chairman if he is

authorized in that behalf by the Board; and when he is not so authorized, shall be signed by

not less than two Directors.

WINDING UP

Distribution of AssetsThe Liquidator on any winding up (whether voluntary and supervision or compulsory) may

with the sanction of a Special Resolution, but subject to the rights attached to any preference

share capital, divide among the contributories in specie any part of the assets of the Company

and may, with the like sanction, vest any part of the assets of the Company in trustees upon

such trusts for the benefit of the contributors, as the liquidator, with the like sanction shall

think fit.


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Registration with the Registrar of Companies to get the TEXTILE MILL incorporated

1. SELECTION OF A NAME :

We have to select, in order of preference, at least one suitable name up to a

maximum of six names, indicative of the main objects of the company. The followingare the names which we want to name our Textile Mill:

i. JRD Textile Mills Limited.ii. National Textile Mills Limited.

iii. Punjab Textile Mills Limited.iv. Jalandhar Textile Mills Limited.v. Ludhiyana Textile Mills Limited.

vi. Alliance Textile Mills Limited.

We have ensured that the name does not resemble the name of any other already registered

textile mill and also does not violate the provisions of emblems and names (Prevention of

Improper Use Act, 1950) by availing the services of checking name availability on the portal.

2. APPLICATION OF THE NAME:

We have to apply tothe concerned RoC to ascertain the availability of name in eForm1

A [Pursuant to sections 20 and 21 of the Companies Act, 1956] by logging in to theportal. A fee of Rs. 500/- has to be paid alongside and the digital signature of the applicant

proposing the company has to be attached in the form. If proposed name is not available, the

user has to apply for a fresh name on the same application. Form 1A is attached and filled

3. GRANTING OF THE NAME BY THE R.O.C.:

The first name, i.e. JRD TEXTILE MILLS Limited is assumed to have been

selected and the letter of incorporation has been received.

4. FILLING OF THE FORM TO GET THE COMPANY REGISTERED:

The form is filled giving the following information:

A. The application is for incorporating of a new Textile Mill Limited,JRD Textile Mill Ltd.

B. The proposed company is a Public company.C. The Category of the Proposed Company is a company limited by

shares.

D. The company is having Share Capital.E. The state will be registered in the state of Punjab.F. The numbers of promoters are 7.G. The main object of the company is manufacturing clothesH. Proposed authorized capital is Rs 120000,000 (Twelve Crore Only)

Along with the form we have to arrange for the drafting of the memorandum and articles ofassociation by the solicitors, vetting of the same by RoC and printing of the same. The


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memorandum and article must be arranged for stamping of the memorandum and articles

with the appropriate stamp duty.

We have to get the Memorandum and the Articles signed by at least two subscribers in own

hand, father's name, occupation, address and the number of shares subscribed for and

witnessed by at least one person.

We have to ensure that the Memorandum and Article is dated on a date after the date of

stamping.

Login to the portal and fill the following forms and attach the mandatory documents listed in

the eForm

Declaration of compliance - Form-1

Notice of situation of registered office of the company - Form-18.

Particulars of the Director's, Manager or Secretary - Form-32.

We have to submit the following eForms after attaching the digital signature pay the requisite

filing and registration fees and send the physical copy of Memorandum and Article of

Association to the RoC

After processing of the Form is complete and Corporate Identity is generated obtain

Certificate of Incorporation from RoC.

ADDITIONAL STEPS TO BE TAKEN FOR

FORMATION OF A PUBLIC LIMITED COMPANY:

To obtain Commencement of Business Certificate after incorporation of the companythe public company has to make following compliance

File a declaration in eForm 20 and attach the statement in lieu of theprospectus(schedule III) OR

File a declaration in eForm 19 and attach the prospectus (Schedule II) to it.

Obtain the Certificate of Commencement of Business.


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REGISTRAR OF COMPANIES

CERTIFICATE OF COMMENCEMENT OF

BUSINESS

This is to certify that The JRD Textile Mill Limited filed for

incorporation was granted on the 30th November 2009. This proved that

the company has performed all the requirements and fulfilled the legal

procedures of the incorporation of the company and all the documents

were found legal and satisfactory. From this day it is forwarded that the

company is capable of undertaking its normal business operation.


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PROSPECTUS

In order to finance its activities , a company needs capital which is raised by a public

company by issue of a prospectus. To raise the capital GSP TRANSPORTATION

company issue the prospectus and invite general public to buy the shares of the

company.

They also send a copy of prospectus to registrar for the registration of the

prospectus because without this a company cannot issue the prospectus.

The important contents of prospectus are as follow:-

1 General information about the company

2 Capital structure of the company

3 Terms of the present issue

4 Company, management and project

5 Management perceptions to risk factors

6 Financial information7 Statutory and other information


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CONTRACT

This is to certify that JRD Textile Ltd. has undergone contract with SDP Pvt. Ltd. as an

distributors to retail their product at Jalandhar and Phagwara. The sum of Rs 2000000

(Rupees Twenty lacs) has been paid for the purpose of retailing the products.

Jinu Jose Dhananjay Kumar

Managing Director Managing Director

JRD Textile Mills Ltd. SDP Pvt. Ltd


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FORM NO. 1

Registration No. of Company .......... Nominal Capital : Rs. ................

THE COMPANIES ACT, 1956

Declaration of compliance with the requirements of the Companies Act, 1956 on

application for registration of a company

[Pursuant to section 33(2)]

Name of Company JRD Textile Mills Limited/Private Limited

Presented by..Jinu, Jose, Dhananjay Kumar and Rajiv Gupta

we promoters ., of JRD Textile Mills do solemnly

and sincerely

Declare that I am [1] Rajiv Gupat who is engaged in the formation of the company,

or a person

Named in the articles as a director/manager/secretary of the

Limited/Private

Limited.

And that all the requirements of the Companies Act, 1956, and the rules thereunder in respect of

matters precedent to the registration of the said company and incidental thereto have been

complied with.

And make this solemn declaration conscientiously believing the same to be true.


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Date 04/12/09

Place Jalandhar Signature

Witness

Designation

FORM NO. 18

Registration No. of the Company Nominal Capital: Rs


Notice of the situation/change of situation of registered office

[pursuant to section 146]

Name of the company: JRD Textile Mills Ltd.

Notice is hereby given that ----

1. (a) the registered office of the company is situated Phagwara, Jalandhar.with effect from 04/12/09

[date]

(b) the situation of the registered office of the company of was changed from to

with effect form .

[date]

2. Situation of registered office falls under the jurisdiction of(name of the police station).*

Dated this Day of 19

Signature

Name

(In Block Capitals)

Designation

*State address of nearest police station with district and tehsil.

1. An advocate of the Supreme Court of the ...................... High Court, an attorney or a pleaderentitled to appear before the ........................... High Court or a chartered accountant practisingin India.


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2. State whether director, manager / secretary /advocate/ chartered account.

FORM NO 29

Registration No. of Company ........................ Nominal Capital Rs. ...................................


Consent to act as director of a company and/or undertaking to take and pay for

qualification shares

[pursuant to section 264(2)/266(I)(a) and 266(1)(b)(iii)]

Name of company .............................................. Limited ..........................................

Presented by ..................................................................................................................

To the Registrar of Companies .......................................................................

I, the undersigned, hereby testify my consent to act as director of the ..........................

limited, ................................ pursuant to section 264(2)/266(1)(a) of the Companies Act, 1956 and

certify that I have not been disqualified to act as a director under sections 267 and/or 274 of the

Companies Act, 1956.

I, the undersigned having consented to act as director of the .............................. Limited, also

hereby undertake to take from the said company and pay for .................... shares of Rs. .................

each, being the number/value of the shares prescribed as the qualification shares for the office

of director of the said company.

Name and

surname in full

and fathers

names

Address Occupation Date of birth Nationality Signature

1 2 3 4 5 6

Signature ..............................

Designation ...........................

Dated the ........................... day of .................... 19

Notes: (1) Delete the portion not applicable.


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(2) If a director signs through his agent authorised in writing, the authority must be

produced

before the Registrar.

(3) In case of undertaking to take and pay for qualification shares, the from should be

accompanied by the necessary stamp duty.

FORM NO. 32

Registration No. of Company .......................... Nominal Capital Rs. ...................................


Particulars of appointment of directors and manager and changes among them

[Pursuant to section 303(2)]

Name of Company ......................................... Presented by ...............................................

Note : --- If a company has no particulars to be included in one or two of the headings A

B and C the parts containing those headings (in respect of which the company has no

particulars to be included) need not be filed.

A. Appointment of and changes among directors.

Name or

names and

surname in

full

Fathers/

husbands

name

Usual

residential

address

Nationality Date of

appointment

or change

Brief

particulars of

changes

1 2 3 4 5 6

Notes: (1) A note of changes should be made in column 6 e.g. by inserting against the name ofnew

director, etc. the words in place of ............... ......... and by indicating against the name of

the

former director, the cause for the change, e.g. by death, resignation, retirement by

rotation,

disqualification etc.

(2) In case of managing director, his designation should be stated with his name in

columan1.

B. [***]

C. Appointment of and changes in managership and secretaryship.


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Name or

names and

surname in

full

Fathers/

husbands

name

Usual

residential

address

Nationality Date of

appointment

or change

Brief

particulars of

changes

1 2 3 4 5 6

Dated the .......................................... day of ..............19

Signature ............................................

Designation............................................

Notes: (1) For the purposes of this form, particulars of a person appointed as manager within

the

meaning of section 2(24) of the Companies Act, 1956 need be given.

(2) A note of change as also the cause of change e,g, by death, resignation, removal,

disqualification, etc. should be stated in column 6.

Documents

28460050 Steps for Formation of a Company