Section 371: Effect of registration under this Part
This section sets out the effects of registering a company under this Part, including the application of this Act's provisions and the treatment of the company's existing rules and laws.
The section, clause by clause
What the section says
In plain terms
(1)When a company is registered in pursuance of this Part, sub-sections (2) to (7) shall apply.
When a company is registered under this Part, the following provisions apply to it.
(2)All provisions contained in any Act of Parliament or any other law for the time being in force, or other instrument constituting or regulating the company, including, in the case of a company registered as a company limited by guarantee, the resolution declaring the amount of the guarantee, shall be deemed to be conditions and regulations of the company, in the same manner and with the same incidents as if so much thereof as would, if the company had been formed under this Act, have been required to be inserted in the memorandum, were contained in a registered memorandum, and the residue thereof were contained in registered articles.
The company's existing rules and laws are treated as its conditions and regulations, just like they would be if the company was formed under this Act.
(3)All the provisions of this Act shall apply to the company and the members, contributories and creditors thereof, in the same manner in all respects as if it had been formed under this Act, subject as follows:—
The company and its members, contributories, and creditors are subject to all provisions of this Act, with some exceptions, including the application of Table F and the numbering of shares.
(3)(a)Table F in Schedule I shall not apply unless and except in so far as it is adopted by special resolution;
(3)(b)the provisions of this Act relating to the numbering of shares shall not apply to any company whose shares are not numbered;
(3)(c)in the event of the company being wound up, every person shall be a contributory, in respect of the debts and liabilities of the company contracted before registration, who is liable to pay or contribute to the payment of any debt or liability of the company contracted before registration, or to pay or contribute to the payment of any sum for the adjustment of the rights of the members among themselves in respect of any such debt or liability, or to pay or contribute to the payment of the costs, charges and expenses of winding up the company, so far as relates to such debts or liabilities as aforesaid;
(3)(d)in the event of the company being wound up, every contributory shall be liable to contribute to the assets of the company, in the course of the winding up, all sums due from him in respect of any such liability as aforesaid; and in the event of the death or insolvency of any contributory, the provisions of this Act with respect to the legal representatives of deceased contributories, or with respect to the assignees of insolvent contributories, as the case may be, shall apply.
(4)The provisions of this Act with respect to—
Certain provisions of this Act, such as registration of an unlimited company as a limited company and powers to increase share capital, apply to the company.
(4)(a)the registration of an unlimited company as a limited company;
(4)(b)the powers of an unlimited company on registration as a limited company, to increase the nominal amount of its share capital and to provide that a portion of its share capital shall not be capable of being called-up except in the event of winding up;
(4)(c)the power of a limited company to determine that a portion of its share capital shall not be capable of being called-up except in the event of winding up, shall apply, notwithstanding anything in any Act of Parliament or any other law for the time being in force, or other instrument constituting or regulating the company.
(5)Nothing in this section shall authorise the company to alter any such provisions contained in any instrument constituting or regulating the company as would, if the company had originally been formed under this Act, have been required to be contained in the memorandum and are not authorised to be altered by this Act.
The company is not allowed to alter certain provisions that would have been required to be in its memorandum if it had been formed under this Act.
(6)None of the provisions of this Act (apart from those of section 242) shall derogate from any power of altering its constitution or regulations which may be vested in the company, by virtue of any Act of Parliament or any other law for the time being in force, or other instrument constituting or regulating the company.
The company's existing powers to alter its constitution or regulations are not affected by this Act, except as provided in section 242.
(7)In this section, the expression “instrument” includes deed of settlement, deed of partnership, or limited liability partnership.
The term "instrument" in this section includes a deed of settlement, deed of partnership, or limited liability partnership.
The right-hand column is written from the section text, not quoted from it, and it has no legal force. Where the two differ, the left-hand column is the law.
Amendment notes
- 1. Ins. by Act 1 of 2018, s. 75 (w.e.f. 15-8-2018).
- 2. Ins. by Act 31 of 2016, s. 255 and the Eleventh Schedule (w.e.f. 15-11-2016).
- 1. The proviso ins. by Act 31 of 2016, s. 255 and the Eleventh Schedule (w.e.f. 15-11-2016).
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Reproduced from the official India Code print for reference. Check the current text on India Code before you rely on it, and read the section alongside its Rules. Nothing here is legal advice.