Conclusiveness of “Certificate of Incorporation”- Sec.35; Companies Act,1956

Once an association attains Certificate of Incorporation; no inquiry shall be held justifiable for checking the particulars behind the certificate since same shall be deemed to be genuine and correct.

The Company that has once gained Certificate of Incorporation can not be challenged in any court for the same

Certificate of Incorporation once issued signifies:

• Concerned organization is eligible to be registered
• Concerned organization is registered under Companies Act,1956
• All requirements have been fulfilled

Procedure for conversion of a Public Company into a Private Company

Following steps are to be followed for the purpose :

• Pass Special Resolution for the purpose of inserting the Four Restrictions as given in Section 3(1)(iii) in the articles
• Pass Special Resolution for adding the word “Private” at the end of the name of the Company
• Within 3 months of alteration of articles, apply to Central Government for obtaining its approval
• Within 1 month of receipt of approval of Central Government, file with registrar an amended copy of the articles

Section3(1)(iii)- Private Company;The Companies Act,1956

Private Companies are subject to following restrictions under the above mentioned Section :

1. Right to transfer shares is restricted
2. Number of members limited to 50 :
   • Joint holders to be counted as one member for the purpose of  deciding the number of members
   • Employees; whether retired or not who have shares due to being in employment, won’t be counted as members for the purpose of this definition
3. Prohibition on invitation to public to subscribe for any shares or debentures
4. Prohibition on acceptance and invitation of deposits from persons other than its members, directors or their relatives

Liability under Section 45 - Companies Act,1956

Where a company continues to carry its business with number of members below the statutory minimum( 7 in case of Public Company; 2 in case of Private Company); for more than 6 months; then all the members remaining which are cognizant of such fact will be liable personally for the debts of company incurred after a period of 6 months.

For the Purpose of Statutory minimums; refer the table given below:

Termination Of Agency

BY THE ACTS OF PARTIES

1. By Agreement – The Principal and agent may mutually agree to terminate the agency, at anytime
2. By Revocation (Done by the Principal)
3. By Agent; renouncing the business of Agency

BY OPERATION OF LAW

1. Completion of Business of Agency
2. Death or Insanity of the Principal or Agent
3. Where the Principal or Agent, being a Company, is dissolved
4. Destruction of subject matter of Agency
5. Principal becoming Insolvent
6. Expiration of period where agency was for a fixed period