Incorporation and the certificate of incorporation

1. Who may form a company

Under section 3(1) a company may be formed for any lawful purpose by seven or more persons (public company), two or more persons (private company) or one person (One Person Company), by subscribing their names to a memorandum and complying with the requirements of the Act as to registration. The purpose must be lawful: an association formed for an unlawful object cannot be registered.

2. Steps before filing

• Digital signature and Director Identification Number. Every proposed director must hold a DIN (section 152(3)); it is now usually obtained in the incorporation form itself.
• Name. The name must not be identical with or too nearly resemble that of an existing company, nor be an offence to use or undesirable in the Central Government's opinion (section 4(2)); words suggesting a connection with or patronage of Government need prior approval (section 4(3)). A name may be reserved with the Registrar for twenty days on application (section 4(4) and (5)).
• Memorandum and articles. Drafted in the forms in Tables A to E (memorandum) and F to J (articles) of Schedule I, as applicable.

3. Documents filed: section 7(1)

The following are filed with the Registrar within whose jurisdiction the registered office is to be situated:

• (a) the memorandum and articles, signed by all the subscribers;
• (b) a declaration of compliance by an advocate, chartered accountant, cost accountant or company secretary in practice engaged in the formation, and by a person named in the articles as director, manager or secretary, that all requirements of the Act and Rules have been complied with;
• (c) a declaration from each subscriber and each first director that he has not been convicted of any offence in connection with the promotion, formation or management of a company, nor found guilty of fraud, misfeasance or breach of duty to a company in the preceding five years, and that the documents filed are correct and complete (an affidavit until the 2017 Amendment substituted a declaration);
• (d) the address for correspondence until the registered office is established;
• (e) particulars and proof of identity of every subscriber;
• (f) particulars of the first directors, including their DIN; and
• (g) particulars of the first directors' interests in other firms and companies, and their consent to act.

In practice the whole of this is filed electronically in the integrated SPICe+ form on the MCA portal, which also allots PAN, TAN and other registrations.

4. Registration and the certificate

On the basis of the documents filed, the Registrar registers them and issues a certificate of incorporation in the prescribed form, stating that the company is incorporated under the Act (section 7(2)). From the date mentioned in the certificate the Registrar allots a corporate identity number (CIN), a distinct identity for the company, which is included in the certificate (section 7(3)). The company must keep copies of all the documents originally filed at its registered office until its dissolution (section 7(4)).

5. Effect of the certificate

Section 9 provides that from the date of incorporation mentioned in the certificate, the subscribers and all who later become members are a body corporate by the registered name, with perpetual succession and power to hold property, contract, and sue and be sued. Three consequences follow:

• The company exists from the date on the certificate, not from the date it was signed or delivered. In Jubilee Cotton Mills Ltd. v. Lewis (House of Lords, 1924) the certificate was issued on 8 January but dated 6 January; allotments made on 6 January were valid because the company existed from the first moment of that day.
• The subscribers become members and are entered in the register (section 2(55)(i)), and the memorandum and articles bind the company and the members (section 10).
• The company's legal personality cannot be attacked collaterally on the ground of an irregularity in the registration process. Under the 1956 Act section 35 made the certificate conclusive evidence that all requirements of registration had been complied with. The classic illustration is Moosa Goolam Ariff v. Ebrahim Goolam Ariff (Privy Council, 1912), where the memorandum had been altered after signature without the subscribers' consent; the certificate was held conclusive and the company's existence could not be questioned.

6. The 2013 position: fraud in incorporation

The 2013 Act deliberately omitted the “conclusive evidence” rule and instead deals with false incorporation directly:

• Any person who furnishes false or incorrect particulars, or suppresses material information, in the incorporation documents is liable under section 447 (fraud) (section 7(5)).
• If it is proved after incorporation that the company was got incorporated by false information or fraud, the promoters, first directors and the certifying professional are each liable under section 447 (section 7(6)).
• On an application, the Tribunal may (section 7(7)): pass orders for regulating the management, including changes in the memorandum and articles; direct that the liability of members shall be unlimited; direct removal of the name of the company from the register; order the company to be wound up; or pass any other order. The company must be heard, and the Tribunal must take into account the transactions the company has entered into and its liabilities.

The certificate still establishes that the company exists, and third parties may deal with it on that footing. But it no longer shields a fraudulently incorporated company from being dissolved.

7. Commencement of business: section 10A

The original section 11, which required a certificate of commencement of business, was omitted in 2015. The 2019 Amendment reintroduced a lighter requirement. Under section 10A a company having a share capital incorporated after the 2019 Amendment shall not commence business or exercise borrowing powers unless (a) a director files, within 180 days of incorporation, a declaration that every subscriber has paid the value of the shares agreed to be taken, and (b) the company has filed a verification of its registered office under section 12(2). Default attracts a penalty, and if no declaration is filed within 180 days and the Registrar believes the company is not carrying on business, he may act to remove its name from the register.

How this is examined

January 2026 set a short note on “certificate of incorporation”. Earlier papers ask for the procedure of incorporation as a 10-mark question. For the short note: section 7(2) and (3), section 9, Jubilee Cotton Mills, the old conclusive-evidence rule with Moosa Goolam Ariff, and the new section 7(7) powers. For the essay on procedure, walk through sections 3, 4 and 7 in order, end with the certificate and section 10A, and keep the list of documents in the statute's own order so the examiner can tick it off.