Conclusion of Certificate of Incorporation Under Companies Act 2013

Conclusion of Certificate of Incorporation Under Companies Act 2013

As per the companies act, 2013, certificate of incorporation is not conclusive proof of everything prior to incorporation being in order Sub section (5) (6) and (7) of section 7 make furnishing of any false or incorrect particulars of any  information  or  suppression  of  any  material  information  or  suppression  of  any  material information punishable with a minimum of six month imprisonment which may extend up to 10years  and  also  fine  which  shall  not  be  less than amount  involved in the  fraud but which  may extend to three times the amount involved in the fraud. Besides  the  aforesaid  penalty,  the  tribunal  may,  on  a  application  made  to  it,  and  on  being satisfied that the situation so warrants,-(a)Pass  such orders, as it may  think fit, for regulation of  the management of the company including  changes, if any, in  its  memorandum  and  articles,  in  public interest  or  in  the interest or in the interest of the company and its members and creditors; or(b)Direct that liability of the members shall be unlimited; or(c)Direct removal of the name of the company from the register of companies; or(d)Pass an order for the winding up of the company; or(e)Pass such other orders as it may deem fit However, before making any order, as aforesaid,-1.The company shall be given a reasonable opportunity of being heard in the matter; and 2.The tribunal  shall take  into consideration the  transaction  entered  into  by  the  company,including the obligations, if any, contracted or payment  of any liabilityYou should  also  note that  the certificate  of incorporation  is not  the  conclusive  proof with respect to the legality of  the object  of the company mentioned in the objects clause  of the memorandum of association. As  such, if  a company  has been registered  whose  objects are illegal, the incorporation does not validate the illegal objects.In such case the remedy available is to wind up the company

CONCLUSION

Sections  34  and  35  of  the  Companies,  Act,  1956  provided  for  the  conclusiveness  of  the Certificate of Incorporation. But this concept seems to have lost its efficacy because Section  7(7) of the new Companies Act, 2013 empowers the Tribunal to pass an order for the winding up of  the  company  or  remove  the  name  of  the  company  from  the  Register  of  Companies.  The Tribunal can take such an action when it is proved that the company had been incorporated by furnishing  any  false or  incorrect  information or  representation  or by  suppressing any material fact or information in any of the documents or declaration filed or made for incorporation or by any fraudulent action. However, before making any order, the Tribunal shall give the company a reasonable opportunity of being heard. Thus, as per section 7 (7) of  the Companies  Act, 2013,the Certificate of Incorporation is no more conclusive.

Certificate of Incorporation Under Companies Act 2013

Certificate of Incorporation Under Companies Act 2013, Companies act India, Certificate of Incorporation under companies acts

Sections  34  and  35  of  the  Companies,  Act,  1956,Certificate of Incorporation Under Companies Act 2013