`Introduction

In simple words, a company can be defined as a group of persons associated together

for the purpose of carrying on a business, with a view to earn profits. However, one
must remember that companies may also be formed for the promotion of commerce,
art, science, religion or charity or any useful object under the Companies Act.

Lord Justice Lindley defines the company as ‘A company is an association of

many persons who contribute money or money‘s worth to a common stock and employ
it in some trade or business and who share a profit and loss arising there from. The
common stock so contributed is denoted in money and is the capital of the company.
The people who contribute it or to whom it belongs are members. The proportion of
capital to which each member is entitled is his share. The shares are always transferable
although the right to transfer is often more or less restricted.’

A company, formed and registered under the Company Act, is regarded by law as
a single person, having specified rights and obligations. The law confers on a company a
distinct legal personality, with perpetual succession and a common seal.

Public Limited Company

A public company is defined as a company which is not a private company. The
following conditions apply only to a public company:

 It must have at least seven shareholders.

 It must have minimum paid-up capital of Rs 5,00,000
 It must publish a prospectus or file a statement in lieu of a prospectus before it
can start transacting business.
 A public company is required to have at least three directors.
 It must hold statutory meetings and obtain government approval for the
appointment of the management. A public company is not authorized to start
business upon the grant of the certificate of incorporation. In order to be eligible
to commence business as a corporation, it must obtain another document called
"trading certificate”.
 It must have at least 3 directors.
 In the case of public company, the directors must file with the registrar consent
to act as a director or sign an undertaking for their qualification shares.

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 The essential steps for the formation of a
COMPANY
Before a company can be formed the following steps must be taken:

1. The Memo and the Article must be prepared. These two documents must be filed
when the application is made for the registration and incorporation of the
company. The Companies Act lays down rules regarding the preparation of the
memorandum. Schedule I to the Act of 1956 contains four model forms for use in
different cases.
2. If it is proposed to have a paid up capital of more than Rs 3 crores, sanction of the
central Government must be obtained under the capital issue (Control) Act,
1956.
3. If the company to be formed intends to participate in an industry which is
included in the scheduled annexed to the industries (Development and
Regulation) Act, 1951, a license must be obtained under the Act.
4. The company must be registered in accordance with the provision of the
companies Act, 1956 and a certificate of incorporation must be obtained.
5. The prospectus or the statement in lieu of prospectus must be issued and
registered with the registrar.
6. The minimum subscription must be raised and therefore the allotment of shares
must be made.
7. The certificate for the commencement of business must be obtained from the
Registrar.

PROCEDURE OF REGISTRATION

For the registration of a company, the following documents, together with the necessary
fees, must be submitted to the registrar of companies of the state in which the
registered office of the company will be situated-Sec 33.

1. Memorandum of Association, prepared in accordance with provision of the

Companies Act, and signed by the least 7 persons in the case of public companies
and 2 persons in the case of private companies.
2. The Articles of Association, in case of unlimited companies, companies limited by
guarantee and private companies limited by shares.
3. A declaration by any of the following persons, stating that all the requirements of
the act have been compiled with an advocate, an attorney a pleader, a chartered
accountant, or a person named in the articles as director, manager, or secretary
of the company.
4. The duly signed list of persons have consented to be directors of the company,
their consent in writing and the signed agreement with every such director to
take the number of shares required to qualify as directors of the company. These

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 are not required in the case of private companies and the companies not having a
share capital.
5. The registration fees of a company are fixed on the graduated scale on the
amount of nominal capital or the number of members. There is also a filing fee
per document.

If the Registrar is satisfied that all the required documents of the act have been
compiled with, he will register the company and issue a certificate called the Certificate
of Incorporation

MEMORANDUM OF ASSOCIATION
1. Name Clause: JRD Textiles Ltd.
2. Registered Office Clause: Phagwara, Jalandhar.
3. Object Clause:

Main Object:
 To produce cloth of suitable quality textile sector.
 To multiply such units at locations convenient to cotton rising.
 To import cotton and export cloth.
 To assist Government in taking up to increase production of cotton.
 To establish, extend and re-organize extension centers in collaboration with State
Government or a for improving the quality and increasing the production of cotton
Other Object:

 To develop new techniques to increase production.

 To employ and remunerate experts to investigate and examine into the condition,
prospects, value, character and circumstances, of any business of industrial concern or
undertaking dealing in industries based on cotton.
 To adopt such means of making known the uses of equipment and machinery relating
to industries based on cotton pesticides, homicide etc. by advertising in press,
publication of books, magazines, periodicals, posters, pictures, instructions on site,
holding seminars etc.
 To establish training centre where employees can get training.

4. Area of Operation Clause: Phagwara, Jalandhar

5. Liability Clause: Limited by shares.
6. Capital Clause: Rs,120000000 (Rupees twelve crore only.)
7. Association and subscription Clause:

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 ARTICLES OF ASSOCIATION

SHARE CAPITAL AND INCREASE AND REDUCTION OF CAPITAL

“The Authorized Share Capital of the company is Rs. 120000000 (Rupees Twelve Crore
only) divided into 1200000 (Twelve lacs) Equity Shares of Rs. 100 each (Rupees Hundred
each) with powers to increase or reduce the same in accordance with the provisions of the
Companies Act, 1956.

Increase of capital of the company

The Company in General Meeting, may from time to time, increase its capital by the creation
of new shares, such increase to be of such aggregate amount and to be divided into shares of
such amounts as the resolution shall prescribe.

Allotment otherwise than for cash

Subject to the provisions of the Act and these Articles, the Directors may allot and issue
shares in the capital of the Company as payment or part-payment for any property or assets of
any kind whatsoever, sold or to be sold or transferred or to be transferred or for goods or
machinery supplied or to be supplied or for services rendered or to be
rendered or for technical assistance or know-how made or to be made available to the
Company or the conduct of its business and shares which may be so allotted may be issued as
fully or partly paid-up otherwise than in cash and if so issued, shall be deemed to be fully or
partly paid as the case may be.

Additional capital to form part of existing capital

Except so far as otherwise provided by the conditions of issue or by these presents, any
capital raised by the creation of new shares, shall be considered as part of the existing capital.

Redeemable preference shares

Subject to the provisions of Section 80 of the Act, the Company shall have the power to issue
Preferential Shares
Which are or at the option of the Company are to be liable to be redeemed and the resolution
authorizing such issue
Shall prescribe the manner, terms and conditions of redemption.

Reduction of capital
The Company may (subject to the provisions of Sections 78, 80, 100 to 105 inclusive, of the
Act) from time to time by Special Resolution, reduce its capital and any Capital Redemption
Reserve Account or Share Premium Account in any manner for the time being authorized by
law, and in particular, capital may be paid off on the footing that it may be called up again or
otherwise

SHARES AND CERTIFICATES

Shares to be numbered progressively and no Shares are to be sub-divided: The
shares in the capital shall be numbered progressively according to their several
denominations and except in the manner herein before mentioned no share shall be sub-
divided.

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 Shares at the disposal of the Directors: Subject to the provisions of these Articles and
the Act, the shares in the capital of the Company for the time being (including any shares
forming part of any increased capital of the Company) shall be under the control of the
Directors who may issue, allot or otherwise dispose of the same or any one of them to such
persons in such proportion and on such terms and conditions. The shares can be issued at a
discount and at such times as they may from time to time think fit and proper and with the
sanction of the Company in General Meeting to give to any person the option to call for or
allotted shares of any class of the Company either at par or at premium or subject as aforesaid
at a discount during such time and for such consideration and such option being exercisable
at such times as the Directors think fit; and any shares which may be so allotted may be
issued as fully paid-up shares and if so issued shall be deemed to be fully paid-up shares. The
Board shall cause to be filed the returns as to allotment provided for in Section 75 of the Act.
Provided that the option or right to call of shares shall not be given to any person except with
the sanction of the company in the General Meeting.

Acceptance of shares
Any application signed by, or on behalf of, an applicant for shares in the Company followed
by an allotment of any shares therein, shall be an acceptance of shares within the meaning of
these Articles; and every person who thus or otherwise accepts any shares and whose name is
entered in its Register of Members shall, for the purpose of these Articles, be a member of the
Company

Renewal of share certificate

No fee shall be charged for issue of new share certificates in replacement of those which are
old, decrepit, worn out. If a share certificate is lost or destroyed, a new certificate in lieu
thereof shall be issued only with the prior consent of the Board and on payment of such fee,
not exceeding Rupees two as the Board may from time to time fix, and on such terms, if any,
as to evidence and indemnity as to payment of such out-of-pocket expenses incurred by the
Company in investigating evidence, as the Board thinks fit. When a new share certificate has
been issued in pursuance of Clause (c) of this Article, it shall state on the face of it and
against the stub or counterfoil to the effect that it is “a duplicate issued in lieu of share
certificate No_________.” The word “duplicate” shall be stamped or punched in bold letters
across the face of the share certificate.

Calls

Directors may from time to time, subject to the terms on which any shares may have been
issued and subject to the conditions of allotment, by a resolution passed at a meeting of the
Board (and not by circular resolution) make such calls as it thinks fit upon the Members in
respect of all monies unpaid on the shares held by them respectively and each member shall
pay the amount of every call so made on him to the person or persons and at the time and
place appointed by the Board. A call may be made payable by installments.

Notice of calls
Thirty days notice in writing of any call shall be given by the Company specifying the time
and place of payment, and the person or persons to whom such calls shall be made.

Calls to date from resolution.

A call shall be deemed to have been made at the time when the resolution authorizing such
call was passed at a meeting of the Board.

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Call may be revoked
A call may be revoked or postponed at the discretion of the Board.

Proof on trial or suit for money on shares

On the trial or hearing of any action or suit brought by the Company against any member or
his legal representative to recover any moneys claimed to be due to the company for any call
or other sum in respect of his shares, it shall be sufficient to prove:
a) That the name of the Member, in respect of whose shares the money is ought to be
recovered, appears entered
In the Register of Members as the holder or one of the holders, at or subsequent to the date at
which the money
Sought to be recovered is alleged to have become due, on the said shares and
b) That the resolution making the call is duly recorded in the minutes books.

FORFEITURE AND SURRENDER OF AND LIEN ON SHARES

If money payable on share not paid then notice is to be given to Members.
If any Member fails to pay any call or installment of call on or before the day appointed
for the payment of the same or any such extension thereof as aforesaid, the Board may,
at any time thereafter, during such time as the call or installment remains unpaid, give
notice to him requiring him to pay the same together with any interest that may have
accrued and all expenses that may have been incurred by the Company by reason of
such non-payment.

Terms of notice
The notice shall name a day (not being earlier than the expiry of fourteen days from the
date of service of notice) and a place or places on and at which such call or installment
and such interest thereon at such rate as the Directors shall determine from the day on
which such call or installment ought to have been paid and expenses as aforesaid are to
be paid. The notice shall also state that, in the event of the non-payment at or before the
time and the place appointed, the share in respect of which the call was made or
installment is payable will be liable to be forfeited.

Notice of forfeiture
When any share shall have been so forfeited, notice of the forfeiture shall be given to the
Member in whose name it stood immediately prior to the forfeiture or to any of his legal
representatives, or to any of the persons entitled to the shares by transmission and an entry of
the forfeiture, with the date thereof, shall forthwith be made in the Register of Members but
no forfeiture, shall be in any manner invalidated by any omission or neglect to give such
notice or to make such entry as aforesaid. Forfeited shares to become property of the
Company and may be sold, etc. Any share so forfeited shall be deemed to be the property of
the Company and may be sold, re-allotted or otherwise disposed of, either to the original
holder thereof or to any other person, upon such terms and in such manner as the Board shall
think fit.

Members still liable to pay money due notwithstanding the forfeiture

Any member whose shares have been forfeited shall, notwithstanding the forfeiture, be liable
to pay, and shall forthwith pay to the Company on demand all calls, amounts, installments,

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interest and expenses owing upon or in respect of such shares at the time of the forfeiture,
together with interest thereon from the time of the forfeiture until payment, at such rate as the
Board may determine and the Board may enforce the payment thereof if it thinks fit.

Effect of forfeiture
The forfeiture of a share shall involve extinction, at the time of the forfeiture, of all interest in
and of all claims and demands against the Company, in respect of the share, and all other
rights incidental to the share, except only such of those rights as by these Articles are
expressly saved.

Surrender of shares
The Directors may subject to the provisions of the Act, accept a surrender of any shares from
or by any member
Desirous of surrendering them on such terms as they think fit.

Cancellation of share certificate in respect of forfeited shares

Upon any sale, re-allotment or other disposal under the provisions of the preceding Articles,
the certificate or certificates originally issued in respect of the relative shares shall (unless the
same shall on demand by the Company have been previously surrendered to it by the
defaulting Member) stand cancelled and become null and void and of no effect, and the
Directors shall be entitled to issue a new certificate or certificates in respect of the said shares
to the person or persons entitled thereto.

TRANSFER AND TRANSMISSION OF SHARES

Register of Transfers
“The company shall keep a Register of Transfers and shall have recorded therein fairly and
distinctly particulars of every transfer or transmission of any share held in material form”.

Form of transfer
Shares in the Company shall be transferred by an instrument in writing in such form as
prescribed under Section 108 of the Companies Act, 1956, or under rules made there under
from time to time.

To be executed by Transferor and Transferee

The instrument of transfer duly stamped and executed by the transferor and the transferee
shall be delivered to the Company in accordance with the provisions of the Act. The
instrument of transfer shall be accompanied by such evidence as the Board may require
proving the title of the transferor and his right to transfer the shares and every registered
instrument of transfer shall remain in the custody of the Company until destroyed by an order
of the Board. The transferor shall be deemed to be the holder of such shares until the name of
the transferee shall have been entered in the Register of Members in respect thereof. Before
the registration of a transfer, the certificate or certificates of the shares must be delivered to
the Company.

Title to shares of deceased Member

The executors or administrators or holders of a Succession Certificate or the legal
representatives of a deceased member shall be the only person recognized by the Company as
having any title to the shares registered in the name of such Member, and the Company shall
not be bound to recognize such executors or administrators or holders of a Succession

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Certificate or the legal representatives unless such executors or administrators or legal
representatives shall have first obtained Probate or Letter of Administration or Succession
Certificate, as the case may be, from a duly constituted court in the Union of India provided
that in case where the Board in its absolute discretion think fit, the Board may dispense with
production of Probate or Letters of Administration or Succession Certificate, upon such terms
as to indemnity or otherwise as the Board in its absolute discretion may think necessary and
under Article 59 register the name of any person who claims to be absolutely entitled to
shares standing in the name of a deceased Member, as a Member.

BORROWING POWERS

Power to Borrow
Subject to the provisions of Sections 58A, 292 and 293 of the Act and of these Articles, the
Board may, from time to time at its discretion, by a resolution passed at a Meeting of the
Board accept deposits from Members, either in advance of call or otherwise, and generally
raise or borrow or secure the payment of any sum or sums of money for the purposes of the
company provided however, where the moneys to be borrowed together with the moneys
already borrowed exceed the aggregate of the paid up capital of the Company and its free
reserves the Board shall not borrow such moneys without the consent of the Company in
General Meeting.

The payment or repayment of borrowed money

The payment or repayment of moneys borrowed as aforesaid may be secured in such manner
and upon such terms and conditions in all respects as the Board may think fit.

Terms of issue of debentures

Any debentures, debenture-stock or other securities may be issued at a discount, premium or
otherwise and maybe issued on condition that they or any part of them shall be convertible
into shares of any denomination, and with any privileges and conditions as to redemption,
surrender, drawing, allotment of shares and attending General Meetings, appointment of
Directors and otherwise. Debentures with a right to conversion or allotment of shares shall be
issued only with the consent of the Company in General Meeting.

SHARE WARRANT

Power to issue share warrants

The Company may issue share warrants subject to, and in accordance with the provisions of
sections 114 and 115, and accordingly the Board may in its discretion, with respect to any
share which is fully paid-up on application in writing signed by the persons registered as
holder of the share, and authenticated, by such evidence (if any) as the Board may, from time
to time, require as to the identity of the person signing the application, and on receiving the
certificate (if any) of the share, and the amount of the stamp duty on the warrant and such fee
as the Board may from time to time require, issue a share warrant.

Deposit of share warrant

The bearer of a share warrant may at any time deposit the warrant at the office of the
Company, and so long as name were inserted in the Register of Members as the holder of the
share included in the deposited the warrant remains so deposited, the depositor shall have the
same right of signing a requisition for calling a meeting of the Company, and of attending,

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and voting and exercising the other privileges of a Member at any meeting held after the
expiry of two clear days from the time of deposit as if his warrant.
The bearer of a share warrant shall be entitled in all other respects to the same privileges and
advantages as if he was named in the Register of Members as the holder of the share included
in the warrant, and shall be a Member of the Company.

Issue of new Share Warrant or Coupon

The Board may, from time to time, make rules as to the terms on which (if it shall think fit) a
new share warrant or coupon may be issued by way of renewal in case of defacement, loss or
destruction.

CONVERSION OF SHARE INTO STOCK AND RECONVERSION

Shares may be converted into stock
The Company in General Meeting may convert any paid-up shares into stock; and when any
shares have been converted into stock, the several holders of such stock may thenceforth
transfer their respective interest therein, or any part of such interest, in the said manner and
subject to the same Regulations as, and subject to which shares from which the stock arose
might have been transferred if no such conversion had taken place, or as near thereto as
circumstance will admit. The Company may at any time reconvert any stock into paid-up
shares of any denomination.

Right of stockholders
The holders of stock shall, according to the amount of stock held by them, have the same
rights, privileges and advantages as regards dividends, voting at meetings of the Company,
and other matters, as if they held the shares from which the stock arose, but no such privilege
advantage (except participation in the dividends and profits of the Company and in the assets
on winding-up) shall be conferred by an amount of stock which would not, if existing in
shares, have conferred that privilege or advantage.

MEMBERS’ MEETINGS
Annual General MeetingAnnual General Meeting of the company may be convened
subject to Section 166 and Section 210 of the Act by giving not less than 21 days notice in
writing. Subject to the provisions of Section 171 (2) a meeting may be convened after giving
a shorter notice.

Extra ordinary General Meeting

The Board may, whenever it thinks fit, call an Extraordinary General Meeting and it shall do
so upon a requisition in writing by any Member or Members holding in the aggregate not less
than one tenth of such of the paid-up capital; as at that date carried the right of voting in
regard to the matter in respect of which the requisition has been made.

Quorum at General Meeting:

Five members present in person shall be a quorum for a General Meeting.
A body corporate being a member shall be deemed to be personally present if it is
represented in accordance with Section 187 of the Act. If, at the expiration of half an hour
from the time appointed for holding a meeting of the Company, a quorum shall not be

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present, the meeting it convened by or upon the requisition of Members, shall stand
dissolved, but in any other case the meeting shall stand adjourned to the same day in the next
week or if that day is a public holiday until the next succeeding day which is not a public
holiday at the same time and place or to such other day at such other time and place within
the city or town in which the Office of the Company is situate as the Board may determine,
and if at such adjourned meeting a quorum is not present at the expiration of half an hour
from the time appointed for holding the meeting, the Members present shall be a quorum, and
may transact, the business for which the meeting was called.
The Chairman (if any) of the Directors shall be entitled to take the chair at every General
Meeting, whether Annual or Extraordinary. If there be no such Chairman of the Directors, or
if at any meeting he shall not be present within fifteen minutes of the time appointed for
holding such meeting then the members present shall elect another Director as Chairman and
if no Director be present or if all Directors present decline to take the Chair, then the
members present shall elect one of their members to be the Chairman.

Question at General Meeting how decided

At any General Meeting a resolution put to the vote of the meeting shall be decided on a
show of hands unless a poll is (before or on the declaration of the result of the show of hands)
demanded by a member or members present in person or by proxy and holding shares in the
Company

Number of votes to which member entitled

Subject to the provisions of these Articles and without prejudice to any special privileges or
restrictions as to voting for the time being attached to any class of shares for the time being
forming part of the capital of the Company, every member, not disqualified by the last
preceding Article shall be entitled to be present and to speak and vote at such meeting, and on
a show of hands every member present in person shall have one vote and upon a poll the
voting rights of every member whether present in person or by proxy, shall be in proportion
to his share of the paid-up equity capital of the Company.

DIRECTORS
Number of Directors
Until otherwise determined by the company in a General Meeting and subject to the
provisions of Section 252 of the Act, the number of directors (excluding Debenture Directors
and Directors appointed under Article 111 hereof and Alternate Directors) shall not be less
than three nor more than Eighteen. The Board may appoint, from time to time, one or more of
their members to be the Managing Director or Joint Managing Director or Whole time
Director or Deputy Managing Director or Manager of the Company on such terms and on
such remuneration whether by way of salary or commission, or partly in one and partly in
another as they may think fit

Appointment of special Directors

On behalf of the Company, whenever Directors enter into a contract with any Government,
Central, State or Local, any Bank or Financial institution or any person or persons
(hereinafter referred to as “the appointer”) for borrowing any money or for providing any
guarantee or security or for technical collaboration or assistance or for underwriting or
entering into any other arrangement whatsoever the Directors shall have, subject to the
provisions of Section 255 of the Act, the power to agree that such appointer shall have right
to appoint or nominate by notice in writing addressed to the Company one or more Directors

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on the Board for such period and upon such conditions as may be mentioned in the agreement
and that such Director or Directors may not be liable to retire by rotation nor be required to
hold any qualification shares. The Directors may also agree that any such Director or
Directors may be removed from time to time by the appointer entitled to appoint or nominate
them and the appointer may appoint another or others in his or their place and also fill in any
vacancy which may occur as a result of any such Director or Directors ceasing to hold that
office for any reason whatsoever. The Directors appointed or nominated under this Article
shall be entitled to exercise and enjoy all or any of the rights and privileges exercised and
enjoyed by the Directors of the Company including payment of remuneration and travelling
expenses to such Director or Directors as may be agreed by the Company with the appointer.

Removal of Directors:
The Company may (subject to the provisions of Section 284 of the Act) remove any Director
before the expiration of his period of office and appoint another person in his stead.

PROCEEDINGS OF THE BOARD OF DIRECTORS

Meeting of Directors
The Directors may meet together as a Board for the dispatch of business from time to time
and shall so meet at least once in every three calendar months and at least four such meetings
shall be held in every year. The Directors may adjourn and otherwise regulate their meetings
as they may think fit.

Notice of Board Meetings

Notice of every meeting of the Board shall be given in writing to every Director for the time
being in India and at his address in India to every other Director.

Quorum
Subject to Section 287 of the Act, the quorum for a meeting of the Board shall be one-third of
its total strength (excluding Directors, if any, whose places may be vacant at the time. and
any fraction contained in that one-third being rounded off as one), or two Directors
whichever is higher. Provided that where at any time the number of interested Directors
exceeds or is equal to two- thirds of the total strength, the number of the remaining Directors,
that is to say, the number of the Directors who are not interested present at the meeting being
not less than two, shall be the quorum during such meeting.

Division of profits
The profits of the Company, subject to any special rights relating thereto created or
authorized to be created by these Articles, shall be divisible among the Members in
proportion to the amount of capital paid-up or credited as paid-up and to the period during the
year for which the capital is paid-up on the shares held by them respectively.

The Company in general meeting may declare dividends

Subject to the provisions of Section 205 of the Companies Act, 1956 the Company in General
Meeting may declare dividends, to be paid to its Members according to their respective rights
but no dividends shall exceed the amount recommended by the Board, but the Company in
General Meeting may declare a smaller dividend.

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Interim Dividend
The Board may, from time to time, pay to the members such interim dividend as in their
judgment the position of the Company justifies.

Capital paid-up in advance carrying interest not to earn dividend

Where capital is paid in advance of calls, such capital may carry interest but shall not be in
respect thereof confer a right to dividend or participate in profits.

Dividend to be paid pro-rata

Subject to the rights of persons, if any, entitled to shares with special rights as to dividends,
all dividends shall be declared and paid according to the amounts paid or credited as paid on
the shares in respect whereof dividend is paid.

Retention of Dividends until completion of transfer under Article 62

The Board may retain the dividends payable upon shares in respect of which any person is,
under Article 62 entitled to become a Member, which any person under that Article is entitled
to transfer, until such person shall become a member in respect of such shares or shall duly
transfer the same.

Board Report
There shall be attached to every such balance sheet a report of the Board as to the state of the
Company’s affairs and as to the amounts, if any, which it proposes to carry to any reserves in
such balance sheet and the amount, if any, which it recommends should be paid by way of
dividend; and material changes and commitments, if any, affecting the financial position of
the Company which have occurred between the end of the financial year of the company to
which the balance sheet relates and the date of the report. The Board’s report shall so far as is
material for the appreciation of the state of the Company’s affairs by its members and will not
in the Board’s opinion be harmful to the business of the company or any of its subsidiaries,
deal with any changes which have occurred during the financial year in the nature of the
Company’s business, in the Company’s subsidiaries or in the nature of the business carried
on by them and generally in the classes of business in which the company has an interest and
any other information as may be required by Section 217 of the Act. The Board shall also
give the fullest information and explanations in its report aforesaid or in an addendum to that
report, on every reservation, qualification or adverse remark contained in the auditor’s report.
The Board’s report and any addendum thereto shall be signed by its Chairman if he is
authorized in that behalf by the Board; and when he is not so authorized, shall be signed by
not less than two Directors.

WINDING UP

Distribution of Assets
The Liquidator on any winding up (whether voluntary and supervision or compulsory) may
with the sanction of a Special Resolution, but subject to the rights attached to any preference
share capital, divide among the contributories in specie any part of the assets of the Company
and may, with the like sanction, vest any part of the assets of the Company in trustees upon
such trusts for the benefit of the contributors, as the liquidator, with the like sanction shall
think fit.

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Registration with the Registrar of Companies to get the TEXTILE MILL incorporated

1. SELECTION OF A NAME:
We have to select, in order of preference, at least one suitable name up to a
maximum of six names, indicative of the main objects of the company. The following
are the names which we want to name our Textile Mill:
i. JRD Textile Mills Limited.
ii. National Textile Mills Limited.
iii. Punjab Textile Mills Limited.
iv. Jalandhar Textile Mills Limited.
v. Ludhiyana Textile Mills Limited.
vi. Alliance Textile Mills Limited.

We have ensured that the name does not resemble the name of any other already registered
textile mill and also does not violate the provisions of emblems and names (Prevention of
Improper Use Act, 1950) by availing the services of checking name availability on the portal.

2. APPLICATION OF THE NAME:

We have to apply to the concerned RoC to ascertain the availability of name in eForm1
A [Pursuant to sections 20 and 21 of the Companies Act, 1956] by logging in to the portal. A
fee of Rs. 500/- has to be paid alongside and the digital signature of the applicant proposing
the company has to be attached in the form. If proposed name is not available, the user has to
apply for a fresh name on the same application. Form 1A is attached and filled

3. GRANTING OF THE NAME BY THE R.O.C.:

The first name, i.e. JRD TEXTILE MILLS Limited is assumed to have been
selected and the letter of incorporation has been received.

4. FILLING OF THE FORM TO GET THE COMPANY REGISTERED:

The form is filled giving the following information:

A. The application is for incorporating of a new Textile Mill Limited,

JRD Textile Mill Ltd.
B. The proposed company is a Public company.
C. The Category of the Proposed Company is a company limited by
shares.
D. The company is having Share Capital.
E. The state will be registered in the state of Punjab.
F. The numbers of promoters are 7.
G. The main object of the company is manufacturing clothes
H. Proposed authorized capital is Rs 120000,000 (Twelve Crore Only)

13
Along with the form we have to arrange for the drafting of the memorandum and articles of
association by the solicitors, vetting of the same by RoC and printing of the same. The
memorandum and article must be arranged for stamping of the memorandum and articles
with the appropriate stamp duty.

We have to get the Memorandum and the Articles signed by at least two subscribers in own
hand, father's name, occupation, address and the number of shares subscribed for and
witnessed by at least one person.

We have to ensure that the Memorandum and Article is dated on a date after the date of
stamping.

Login to the portal and fill the following forms and attach the mandatory documents listed in
the eForm

Declaration of compliance - Form-1

Notice of situation of registered office of the company - Form-18.
Particulars of the Director's, Manager or Secretary - Form-32.

We have to submit the following eForms after attaching the digital signature pay the requisite
filing and registration fees and send the physical copy of Memorandum and Article of
Association to the RoC

After processing of the Form is complete and Corporate Identity is generated obtain
Certificate of Incorporation from RoC.

ADDITIONAL STEPS TO BE TAKEN FOR

FORMATION OF A PUBLIC LIMITED COMPANY:

 To obtain Commencement of Business Certificate after incorporation of the company

the public company has to make following compliance
 File a declaration in eForm 20 and attach the statement in lieu of the
prospectus(schedule III) OR
 File a declaration in eForm 19 and attach the prospectus (Schedule II) to it.
 Obtain the Certificate of Commencement of Business.

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 REGISTRAR OF COMPANIES
CERTIFICATE OF COMMENCEMENT OF
BUSINESS

This is to certify that The JRD Textile Mill Limited filed for
incorporation was granted on the 30th November 2009. This proved that
the company has performed all the requirements and fulfilled the legal
procedures of the incorporation of the company and all the documents
were found legal and satisfactory. From this day it is forwarded that the
company is capable of undertaking its normal business operation .

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 PROSPECTUS

In order to finance its activities , a company needs capital which is raised by a public
company by issue of a prospectus. To raise the capital “GSP TRANSPORTATION”
company issue the prospectus and invite general public to buy the shares of the
company.

They also send a copy of prospectus to registrar for the registration of the
prospectus because without this a company cannot issue the prospectus.

The important contents of prospectus are as follow:-

1 General information about the company
2 Capital structure of the company
3 Terms of the present issue
4 Company, management and project
5 Management perceptions to risk factors
6 Financial information
7 Statutory and other information

16
 CONTRACT
This is to certify that JRD Textile Ltd. has undergone contract with SDP Pvt. Ltd. as an
distributors to retail their product at Jalandhar and Phagwara. The sum of Rs 2000000
(Rupees Twenty lacs) has been paid for the purpose of retailing the products.

Jinu Jose Dhananjay Kumar

Managing Director Managing Director

JRD Textile Mills Ltd. SDP Pvt. Ltd

17
 FORM NO. 1

Registration No. of Company .......... Nominal Capital : Rs. ................

THE COMPANIES ACT, 1956

Declaration of compliance with the requirements of the Companies Act, 1956 on

application for registration of a company

[Pursuant to section 33(2)]

Name of Company JRD Textile Mills Limited/Private Limited

Presented by ..Jinu, Jose, Dhananjay Kumar and Rajiv Gupta

we promoters ., of JRD Textile Mills do solemnly

and sincerely

Declare that I am [1] Rajiv Gupat who is engaged in the formation of the company,
or a person

Named in the articles as a director/manager/secretary of the

Limited/Private

Limited.

And that all the requirements of the Companies Act, 1956, and the rules thereunder in respect of
matters precedent to the registration of the said company and incidental thereto have been
complied with.

And make this solemn declaration conscientiously believing the same to be true.

Date 04/12/09

Place Jalandhar Signature

Witness

Designation

18
 FORM NO. 18

Registration No. of the Company Nominal Capital: Rs

THE COMPANIES ACT, 1956

Notice of the situation/change of situation of registered office

[pursuant to section 146]

Name of the company: JRD Textile Mills Ltd.

Notice is hereby given that ----

1. (a) the registered office of the company is situated Phagwara, Jalandhar

.with effect from 04/12/09
[date]
(b) the situation of the registered office of the company of was changed from to
with effect form .
[date]

2. Situation of registered office falls under the jurisdiction of

(name of the police station).*
Dated this Day of 19

Signature

Name

(In Block Capitals)

Designation
*State address of nearest police station with district and tehsil.

1. An advocate of the Supreme Court of the ...................... High Court, an attorney or a pleader
entitled to appear before the ........................... High Court or a chartered accountant practising
in India.

2. State whether director, manager / secretary /advocate/ chartered account.

FORM NO 29

19
Registration No. of Company ........................ Nominal Capital Rs. ...................................

THE COMPANIES ACT, 1956

Consent to act as director of a company and/or undertaking to take and pay for
qualification shares

[pursuant to section 264(2)/266(I)(a) and 266(1)(b)(iii)]

Name of company .............................................. Limited ..........................................

Presented by ..................................................................................................................

To the Registrar of Companies .......................................................................

I, the undersigned, hereby testify my consent to act as director of the ..........................

limited, ................................ pursuant to section 264(2)/266(1)(a) of the Companies Act, 1956 and
certify that I have not been disqualified to act as a director under sections 267 and/or 274 of the
Companies Act, 1956.

I, the undersigned having consented to act as director of the .............................. Limited, also
hereby undertake to take from the said company and pay for .................... shares of Rs. .................
each, being the number/value of the shares prescribed as the qualification shares for the office
of director of the said company.

Name and Address Occupation Date of birth Nationality Signature

surname in full
and father’s
names

1 2 3 4 5 6

Signature ..............................

Designation ...........................

Dated the ........................... day of .................... 19

Notes: (1) Delete the portion not applicable.

(2) If a director signs through his agent authorised in writing, the authority must be
produced
before the Registrar.

(3) In case of undertaking to take and pay for qualification shares, the from should be
accompanied by the necessary stamp duty.

FORM NO. 32

20
Registration No. of Company .......................... Nominal Capital Rs. ...................................

THE COMPANIES ACT, 1956

Particulars of appointment of directors and manager and changes among them

[Pursuant to section 303(2)]

Name of Company ......................................... Presented by ...............................................

Note : --- If a company has no particulars to be included in one or two of the headings ‘A’
‘B’ and ‘C’ the parts containing those headings (in respect of which the company has no
particulars to be included) need not be filed.

A. Appointment of and changes among directors.

Name or Father’s/ Usual Nationality Date of Brief

names and husband’s residential appointment particulars of
surname in name address or change changes
full

1 2 3 4 5 6

Notes: (1) A note of changes should be made in column 6 e.g. by inserting against the name of
new
director, etc. the words “in place of ........................ and by indicating against the name of
the
former director, the cause for the change, e.g. by death, resignation, retirement by
rotation,
disqualification etc.
(2) In case of managing director, his designation should be stated with his name in
columan1.

B. [***]

C. Appointment of and changes in managership and secretaryship.

Name or Father’s/ Usual Nationality Date of Brief

names and husband’s residential appointment particulars of
surname in name address or change changes
full

1 2 3 4 5 6

21
Dated the .......................................... day of ..............19

Signature ............................................

Designation............................................

Notes: (1) For the purposes of this form, particulars of a person appointed as manager within
the
meaning of section 2(24) of the Companies Act, 1956 need be given.

(2) A note of change as also the cause of change e,g, by death, resignation, removal,
disqualification, etc. should be stated in column 6.

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