Section 366 of Companies Act, 2013 – Companies capable of being registered

SECTION 366. COMPANIES CAPABLE OF BEING REGISTERED

[Effective from 1st April, 2014]

(1) For the purposes of this Part, the word “company” includes any partnership firm, limited liability partnership, cooperative society, society or any other business entity formed under any other law for the time being in force which applies for registration under this Part.

(2) With the exceptions and subject to the provisions contained in this section, any company formed, whether before or after the commencement of this Act, in pursuance of any Act of Parliament other than this Act or of any other law for the time being in force or being otherwise duly constituted according to law, and consisting of [11] [two or more members] , may at any time register under this Act as an unlimited company, or as a company limited by shares, or as a company limited by guarantee, in such manner as may be prescribed and the registration shall not be invalid by reason only that it has taken place with a view to the company’s being wound up:

Provided that—

(i)   a company registered under the Indian Companies Act, 1882 (6 of 1882) or under the Indian Companies Act, 1913 (7 of 1913) or the Companies Act, 1956 (1 of 1956), shall not register in pursuance of this section;

(ii)   a company having the liability of its members limited by any Act of Parliament other than this Act or by any other law for the time being in force, shall not register in pursuance of this section as an unlimited company or as a company limited by guarantee;

(iii)   a company shall be registered in pursuance of this section as a company limited by shares only if it has a 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 the 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;

(iv)   a company shall not register in pursuance of this section without the assent of a majority of such of its members as are present in person, or where proxies are allowed, by proxy, at a general meeting summoned for the purpose;

(v)   where a company not having the liability of its members limited by any Act of Parliament or any other law for the time being in force is about to register as a limited company, the majority required to assent as aforesaid shall consist of not less than three-fourths of the members present in person, or where proxies are allowed, by proxy, at the meeting;

(vi)   where a company is about to register as a company limited by guarantee, the assent to its being so registered shall be accompanied by a resolution declaring that each member undertakes to contribute to the assets of the company, in the event of its being wound up while he is a member, or within one year after he ceases to be a member, for payment of the debts and liabilities of the company or of such debts and liabilities as may have been contracted before he ceases to be a member, and of the costs, charges and expenses of winding up, and for the adjustment of the rights of the contributories among themselves, such amount as may be required, not exceeding a specified amount.

[12] [(vii) a company with less than seven members shall register as a private company.]

(3) In computing any majority required for the purposes of sub-section (1), when a poll is demanded, regard shall be had to the number of votes to which each member is entitled according to the regulations of the company.

Applicable Rules

Companies (Authorised to Register) Rules, 2014

[Effective from 1st April, 2014]

 Rule 2. Definitions.—(1) In these rules, unless the context otherwise requires,—

(a)    ‘‘Act’’ means the Companies Act, 2013 (18 of 2013);

(b)    “Schedule” means the schedule annexed to these Rules;

(c)    ‘fees’ means the fees as specified in the Companies (Registration Offices and Fees) Rules, 2014;

(d)    ‘‘Form’’ or “e-form” means the form in the schedule to these rules which shall be used for the matter to which it relates;

(e)    ‘Regional Director’ means the person appointed by the Central Government in the Ministry of Corporate Affairs as a Regional Director;

(f)    “Registrar(LLP)” means the Registrar dealing with the matters relations to Limited Liability Partnership.

[(g) “firm” means a firm as defined in section 4 of the Indian Partnership Act,1932 (9 of 1932);][1]

[13] [(h) “society’’ means a society registered under the Societies Registration Act, 1860 (21 of 1860) and includes a society registered under or deemed to be registered under any other law for the time being in force;

(i) “trust” means an irrevocable public charitable or religious trust registered under any law for the time being in force and represented by its trustees, in whom the trust property is vested, as members;

(j)  “Registrar of Firms” means the Registrar appointed under section 57 of the Indian Partnership Act, 1932 (9 of 1932);

(k)  “Registrar of Trusts” includes a Charity Commissioner, an Inspector-General of Registration or such other authority having the duty of registering trusts in a State.]

(2) Words and expressions used in these rules but not defined and defined in the Act or in Companies (Specification of definitions details) Rules, 2014 shall have the meanings respectively assigned to them in the Act and said rules.

Rule 3. [14] [(1) For the purposes of sub-section (2) of section 366 of the Act, the provision of Chapter II of the Act relating to incorporation of company and matters incidental thereto shall be applicable mutatis mutandis for such registration:

Provided that there shall be two or more members for the purposes of registration of a company under this sub-rule:

Provided further that a company with less than seven members shall register as a private company.

(2) A company shall attach and provide the required documents and information to the Registrar along with Form No. URC. 1 in the following manner, namely:-

(a) In case of an application by a Limited Liability Partnership or firm for registration as a company limited by shares –

(i) a list showing the names, addresses, and occupations of all persons named therein as partners with details of shares held by them respectively, showing separately shares allotted for consideration in cash and for consideration other than cash along-with the source of consideration and distinguishing, in cases where the shares are numbered, each share by its number, who on a day, not being more than six clear days before the day of seeking registration, were partners of the Limited Liability Partnership or firm as the case may be;

(ii) a list showing the particulars of persons proposed as the first directors of the company, alongwith Director Identification Number (DIN), passport number, if any, with expiry date, residential addresses and their interests in other firm or body corporate along with their consent to act as directors of the company;

(iii) in case of a firm, deed of partnership, bye-laws or other instrument constituting or regulating the firm and in case the deed of partnership was revised at any time in the past, copies of the principal and all subsequent deeds including the latest deed, along with the certificate of the registration issued by the Registrar of Firms, in case the firm is registered;

(iv) written consent or No Objection Certificate from all the secured creditors of the applicant;

(v) written consent, from the majority of members whether present in person or by proxy at a general meeting, agreeing for such registration;

(vi) an undertaking that the proposed directors shall comply with the requirements of the Indian Stamp Act, 1899 (2 of 1899) as applicable;

(vii) a copy of the latest income tax return of the Limited Liability Partnership or firm, as the case may be.

(b) In case of an application by a Limited Liability Partnership or firm for registration as a company limited by guarantee or as an unlimited company-

(i) a list showing the names, addresses and occupations of all persons, who on a day, not being more than six clear days before the day of seeking registration, were partners of the Limited Liability Partnership or firm, as the case may be with proof of membership;

(ii) a list showing the particulars of persons proposed as the first directors of the company, alongwith DIN, passport number, if any, with expiry date, residential addresses and their interests in other firm or body corporate along with their consent to act as directors of the company;

(iii) in case of a firm, deed of partnership, bye laws or other instrument constituting or regulating the company and in case the deed of partnership was revised at any time in the past, copies of the principal and all subsequent deeds including the latest deed, along with the certificate of the registration issued by the Registrar of Firms, in case the firm is registered;

(iv) in the case of a company intended to be registered as a company limited by guarantee, a copy of the resolution declaring the amount of guarantee;

(v) written consent or No Objection Certificate from all the secured creditors of the applicant;

(vi) written consent from the majority of members whether present in person or by proxy at a general meeting agreeing for such registration;

(vii) an undertaking that the proposed directors shall comply with the requirements of the Indian Stamp Act, 1899 (2 of 1899), as applicable;

(viii) a copy of the latest income tax return of the Limited Liability Partnership or firm, as the case may be.

(c) In case of an application by a society for registration as a company limited by guarantee under section 8-

(i) a list showing the names, addresses and occupations of all persons, who on a day, not being more than six clear days before the day of seeking registration, were members of the society with proof of membership;

(ii) a list showing the particulars of persons proposed as the first directors of the company, alongwith DIN, passport number, if any, with expiry date, residential addresses and their interests in other firms or bodies corporate along with their consent to act as directors of the company;

(iii) a list containing the names and addresses of the members of the governing body of the society;

(iv) a certified copy of the certificate of registration of the society;

(v) written consent or No Objection Certificate from all the secured creditors of the applicant;

(vi) written consent from the majority of members whether present in person or by proxy at a general meeting agreeing for such registration, and the resolution shall also provide for declaration of the amount of guarantee;

(vii) an undertaking that the proposed directors shall comply with the requirements of the Indian Stamp Act, 1899 (2 of 1899) as applicable;

(viii) a copy of the latest income tax return of the society;

(ix) details of the objects of the company alongwith a declaration from all the members that the restrictions and prohibitions as mentioned in clause (b) and clause (c) of sub-section (1) of section 8 of the Act shall be complied.

(d) In case of an application by a trust for registration as a company limited by guarantee under section 8-

(i) a list showing the names, addresses and occupations of all persons, who on a day, not being more than six clear days before the day of seeking registration, were trustees of the trust with proof thereof;

(ii) a list showing the particulars of persons proposed as the first directors of the company, alongwith DIN, passport number, if any, with expiry date, residential addresses and their interests in other firm or body corporate along with their consent to act as directors of the company;

(iii) a certified copy of the certificate of registration of the trust and the trust deed;

(iv) written consent or No Objection Certificate from all the secured creditors of the applicant;

(v) written consent from the majority of members whether present in person or by proxy at a general meeting agreeing for such registration, and the resolution shall also provide for declaration of the amount of guarantee;

(vi) an undertaking that the proposed directors shall comply with the requirements of the Indian Stamp Act, 1899 (2 of 1899) as applicable;

(vii) a copy of the latest income tax return of the trust;

(viii) details of the objects of the company alongwith a declaration from all the members that the restrictions and prohibitions as mentioned in clause (b) and clause (c) of sub-section (1) of section 8 of the Act shall be complied.

(3) Where an application is made by a society or trust for registration as a company limited by guarantee and it has been proved to the satisfaction of the Registrar that the proposed company has its objects in accordance with clause (a) of sub-section (1) of section 8 of the Act and it intends to comply with the restrictions and prohibitions as mentioned respectively in clause (b) and clause (c) of that sub-section, the Registrar shall issue a license in Form No. INC. 16 to allow such society or trust to be registered as a limited company without the addition to its name of the word “Limited”, or as the case may be, the words “Private Limited” and thereupon issue a certificate of incorporation in terms of sub-rule (4) of rule 4 on an application submitted under Chapter II of the Act for incorporation of a company:

Provided further that a society which has not filed the annual or other returns, statutorily required to be filed with the Registrar of Societies, shall not be eligible to apply for registration under section 366 of the Act.

(4) An undertaking from all the members or partners or trustees providing that in the event of registration as a company under Part I of Chapter XXI of the Act, necessary documents or papers shall be submitted to the registering or other authority with which the company was earlier registered, for its dissolution:

Provided that no such undertaking shall be required to be submitted in case the application for registration under Part I of Chapter XXI of the Act has been made by a Limited Liability Partnership registered under the Limited Liability Partnership Act, 2008 (6 of 2009).

(5) The list of members and directors and any other particulars relating to the company which are required to be delivered to the Registrar shall be duly verified by the declaration of any two or more proposed directors.]

 

 

 

[1] Inserted by the Companies (Authorised to Register) Rules, 2014 vide notification no. F. No. 1/35/2013 CL-V dated 31st May 2016

[2] Substituted for the words “were partners of the Limited Liability Partnership” by the Companies (Authorised to Register) Rules, 2014 vide notification no. F. No. 1/35/2013 CL-V dated 31st May 2016

[3] Substituted for the words “addresses of the partners of the Limited Liability Partnership” by the Companies (Authorised to Register) Rules, 2014 vide notification no. F. No. 1/35/2013 CL-V dated 31st May 2016

[4] Substituted by the Companies (Authorised to Register) Rules, 2014 vide notification no. F. No. 1/35/2013 CL-V dated 31st May 2016. Prior to substitution it read a under:-

“(v) a copy of the Act of Parliament or other Indian law, deed of partnership, bye laws or other instrument constituting or regulating the company and duly verified in the manner provided in sub-rule (4);”

[5] Inserted by the Companies (Authorised to Register) Rules, 2014 vide notification no. F. No. 1/35/2013 CL-V dated 31st May 2016

[6] Substituted for the words “addresses of the partners of the Limited Liability Partnership” by the Companies (Authorised to Register) Rules, 2014 vide notification no. F. No. 1/35/2013 CL-V dated 31st May 2016

[7] Substituted by the Companies (Authorised to Register) Rules, 2014 vide notification no. F. No. 1/35/2013 CL-V dated 31st May 2016. Prior to substitution it read a under:-

“(v) a copy of the Act of Parliament or other Indian law, bye-laws or other instrument constituting or regulating the company duly verified in the manner provided in rule (4);”

[8] Inserted by the Companies (Authorised to Register) Rules, 2014 vide notification no. F. No. 1/35/2013 CL-V dated 31st May 2016

[9] Substituted by the Companies (Authorised to Register) Rules, 2014 vide notification no. F. No. 1/35/2013 CL-V dated 31st May 2016. Prior to substitution it read a under:-

“(3) affidavit, duly notarised, from all the members or partners providing that in the event of registration as a company under Part I of Chapter XXI of the Act, necessary documents or papers shall be submitted to the registering or other authority with which the company was earlier registered, for its dissolution as Limited Liability Partnership.”

[10] Substituted for the words ” designated partners of the Limited Liability Partnership” by the Companies (Authorised to Register) Rules, 2014 vide notification no. F. No. 1/35/2013 CL-V dated 31st May 2016.

[11] Substituted for the words “seven or more members” by the Companies (Amendment) Act 2017 vide Notification No. File No. 1/1/2018-CL.I-Part  dated 5^th July, 2018 effective from 15^th August, 2018.

[12] Inserted by the Companies (Amendment) Act 2017 vide Notification No. File No. 1/1/2018-CL.I-Part  dated 5^th July, 2018 effective from 15^th August, 2018.

[13] Inserted by the Companies (Authorised to Register) Second Amendment Rules, 2018 vide Notification No. File No. 01/04/2016 CL V dated 5^th July, 2018 effective from 15^th August, 2018.

[14]  Substituted by the Companies (Authorised to Register) Second Amendment Rules, 2018 vide Notification No. File No. 01/04/2016 CL V dated 5^th July, 2018 effective from 15^th August, 2018. Prior to the substitution it read as under:

” (1) For the purposes of sub-section (2) of section 366 of the Act, the provision of Chapter II relating to incorporation of company and matters incidental thereto shall be applicable mutatis mutandis for such registration:

Provided that there shall be seven or more members for the purposes of registration of a company under this sub-rule.

(2) A company after obtaining availability of name in terms of the provisions of section 4 of the Act, shall attach the required documents and information to the Registrar along with Form No. URC. 1 in the following manner, namely:—

(a)           For registration as a company limited by shares:

(i)           A list showing the names, addresses, and occupations of all persons named therein as members with details of shares held by them respectively, showing separately shares allotted for consideration in cash and for consideration other than cash along- with the source of consideration) and distinguishing, in cases where the shares are numbered, each share by its number ,who on a day, not being more than six clear days before the day of seeking registration, [2][were partners of the Limited Liability Partnership or firm as the case may be];

(ii)           a list showing the particulars of persons proposed as the first directors of the company, their names, including surnames or family names, the DIN , passport number(if any) with expiry date, residential addresses and their interests in other firms or bodies corporate along with their consent to act as directors of the company;

(iii)         an affidavit from each of the persons proposed as the first directors, that he is not disqualified to be a director under sub section (1) of section 164 and that all the documents filed with the Registrar for registration of the company contain information that is correct and complete and true to the best of his knowledge and belief;

(iv)          a list containing the names and [3][addresses of the Partners of the Limited Liability Partnership or firm as the case may be];

[(v)         in case of a firm, deeds of partnership, bye laws or other instrument constituting or regulating the company and duly verified in the manner provided in sub-rule (4) and in case the deed of partnership was revised at any time in the past copies of the principal and all subsequent deeds including the latest deed, along with the certificate of the registration issued by Registrar of firms, in case the firm is registered;][4]

(vi)          a statement specifying the following particulars:—

(i)            the nominal share capital of the company and the number of shares into which it is divided;

(ii)           the number of shares taken and the amount paid on each share;

(iii)         the name of the company, with the addition of the word “Limited” or “Private Limited” as the case may require, as the last word or words thereof;

(vii)         written consent or No Objection Certificate from all the secured creditors of the applicant;

(viii)       written consent from the majority of members whether present in person or by proxy at a general meeting agreeing for registration under this part;

[(ix) an undertaking that the proposed directors shall comply with the requirements of Indian Stamp Act, 1899 (2 of 1899) as applicable;

(x) a statement of assets and liabilities of the Limited Liability Partnership or the firm, as the case may be, duly certified by a chartered accountant in practice made as on a date not earlier than thirty days of the filing of form no.URC-1;

(xi) a copy of latest income tax return of the Limited Liability Partnership or firm as the case may be.][5]

(b)           For registration as a company limited by guarantee or as an unlimited company;

(i)            a list showing the names, addresses and occupations of all persons, who on a day, not being more than six clear days before the day of seeking registration, were members of the company with proof of membership;

(ii)           a list showing the particulars of persons proposed as the first directors of the company, their names, including surnames or family names, the DIN, passport number(if any) with expiry date, residential addresses and their interests in other firms or bodies corporate along with their consent to act as directors of the company;

(iii)         an affidavit from each of the first directors, that he is not disqualified to be a director under sub section (1) of section 164 and that all the documents filed with the Registrar for registration of the company contain information that is correct and complete and true to the best of his knowledge and belief;

(iv)          a list containing the names and [6][addresses of the Partners of the Limited Liability Partnership or firm as the case may be];

[(v)          a copy of instrument constituting or regulating the company and duly verified in the manner provided in sub-rule (4) and in case the deed of partnership was revised at any time in the past, copies of principal and all the subsequent deeds including the latest deed, along with the certificate of the registration issued by Registrar of firms if any;][7]

(vi)          in the case of a company intended to be registered as a company limited by guarantee, a copy of the resolution declaring the amount guarantee;

(vii)        Written consent or No Objection Certificate from all the secured creditors of the applicant;

(viii)       Written consent from the majority of members whether present in person or by proxy at a general meeting agreeing for registration under this part;

[(ix) an undertaking that the proposed directors shall comply with the requirements of Indian Stamp Act, 1899 (2 of “1899);

(x) a statement of assets and liabilities of the Limited Liability Partnership or the firm, as the case may be, duly certified by a chartered accountant in practice which is made as on a date not earlier than thirty days of the filing of form no.URC-1;

(xi) a copy of latest income tax return of the Limited Liability Partnership or firm as the case may be.][8]

[(3) An undertaking, from all the members or partners providing that in the event of registration as a company under Part I of Chapter XXI of the Act, necessary documents or papers shall be submitted to the registering or other authority with which the company was earlier registered, for its dissolution as a firm.] [9]

(4) The list of members and directors and any other particulars relating to the company which are required to be delivered to the Registrar shall be duly verified by the declaration of any two or more proposed directors , or two or more [10][designated partners of the Limited Liability Partnership or authorised partners of the firm as the case may be].”