How is the process of the formation of the company?

How is the process of the formation of the company?

A Company may be formed by under the companies act, 2013 or other previous law. There are different types of companies to be formed for a lawful purpose pursuant to section 3(1):-

  1.  A Public company is to be formed by a minimum of seven or more members.
  2. A Private company is to be formed by a minimum of two or a maximum of 200 members.

And, One person company is to be formed by one person, that is to say, a private company.

By subscribing their names to a memorandum and article of the company and complying with the requirements of this Act in respect of registration.

Provided that the memorandum of One Person Company will suggest the name of another person (nominee) with his prior written consent in the prescribed form name (INC -3), who shall, in the event of the present member’s death or his incapacity to contract become the member of the company and the written consent of such person shall also be filed with the Registrar of companies at the time of incorporation of the One Person Company along with its memorandum and articles.

Pursuant to Section 3(2) of the Companies Act, 2013,   A Company formed under section 3(1) may be either-

  1. A company limited by shares; or
  2. A company limited by guarantee; or
  3. An unlimited company.

Pursuant to  Section 3(3) of companies act, 2013 an unlimited Company may be further classified as follows:-

1) An unlimited Company having no share capital

2) An unlimited Company having a share capital

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