The certificate of incorporation is a conclusive evidence about various matters mentioned below:
★ A proof of legal existence of a company.
★ A proof showing that all the legal requirements have been complied with.
★ Certificate of incorporation and pre-incorporation contracts.
★ Company acquires a perpetual succession after the issuance of certificate of incorporation is issued to the company.
★ The property or assets acquired in the name of the company become the property, assets of the company and not of its members.
★ Memorandum controls external operations of the company whereas articles control internal operations of the company.
★ Memorandum are the conditions introduced for the benefits of creditors, buyers, debtors, sellers and outside public whereas articles govern the relationship between the company and the shareholders, members amongst the members. It is just like the partnership deed in a partnership.
Registered company is the one which is registered under the Companies Act.
Ultravires is any act done outside the limits of memorandum of association. It is void and cannot be ratified even by the whole body of the shareholders whereas in the case of Articles of association the acts done by the company beyond the articles can be ratified by the shareholders if such acts are not beyond the memorandum and illegal.
★ Nominal Capital or Authorized Capital:
The total fee value of the shares which the company is authorized to issue.
★ Issued Capital:
That part of authorized capital which is actually offered to the public for sale.
★ Subscribed Capital:
Is that part of issued capital which is taken up and accepted by the public.
★ Paid up Capital:
Is the amount of money actually paid by the subscribers or credited as so paid.
★ Uncalled Capital:
Is the unpaid portion of the subscribed capital.
★ Reserved Capital:
Is that part of the uncalled capital which can only be called up at the time of and for the purposes of winding up for the company.
★ To see that all money received from applicants are deposited in a scheduled bank.
★ To call an extra ordinary general meeting when demanded by a valid requisition.
★ To present annual accounts and balance sheet.
★ To forward a statutory report to every member of the company.
★ To call and hold the statutory meeting.
★ To disclose their interest while entering into any transaction with the company.
★ Not to enter into any contract with the company without the consent of the Board of Directors for the sales, purchase or supply of any goods, materials etc.
Duties of Directors:
★ Duty of greatest good faith of fiduciary duties.
★ Duty of reasonable care, skill and diligence.
★ Duty to attend Board Meetings.
★ Duty to invest Company's money.
★ Duty not to delegate functions.
Rights of Directors:
★ Right to participate in the affairs of the company.
★ Right to have remuneration.
★ Right to compensation.
It is an annual meeting of the body of members. Every company is required to hold the annual general meeting. The first annual general meeting must be held writing eighteen months from the date of incorporation of a company. The gap between two annual general meetings should not be more than fifteen months.
Companies registered without limited liability is known as an unlimited company. The liability of such company is unlimited like an ordinary partnership firm and every member of such company is liable for debts of the company in proportion to his interest in the company. In such companies the articles shall state the number of members with which the company is to be registered and if the company has a share capital the amount of the share capital with which the company is to be registered.