Companies Act, 1956
Companies Act, 1956
Companies Act, 1956
Private Company
Public Company
Private Company [Section 3(1)(iii)]
Who is a Promoter?
Bowen, L.J.
The term promoter is “a term not of law but of business”,
usefully summing up, in a single word— promotion, “a
number of business operations familiar to the commercial
world by which a company is brought into existence”.
However, the persons assisting the promoters by acting in a
professional capacity do not thereby become promoters
themselves.
Legal Position of a Promoter
Void-ab-initio.
However, pre-incorporation contracts shall be valid if:
The contract is made for the purpose of the company and the contract is
warranted by the terms of incorporation.
The company adopts the transactions after incorporation.
Registration/Incorporation
Private Company
Minimum Number of Members required – 2.
Public Company
Minimum Number of Members required – 7.
1. Application for availability of name:
Three names in order of priority conforming to the provisions of the Act and
the Guidelines issued by Department of Company Affairs in this regard:
Name to end with the word(s) ‘Limited’ or ‘Private Limited’, as the case
may be, except:
(i) Section 25 Companies
(ii) Govt. Companies (need not use Pvt. Ltd.)
(iii) Producer Companies.
Name should not be identical or too similar to the name of an already
existing company.
Should not include the name of a registered trade mark.
2. Preparation of Memorandum and
Articles of Association