Business Registration in Bangalore - Solubilis Corporate Services

2.  Section 26 of the 1956 Act dealt with Article prescribing
regulations and made the article of association compulsory in
cases of unlimited companies, companies limited by
guarantee and a private company limited by shares. As
regards public company limited by shares, there is no
obligation to register articles of association. The Article of
association prescribe the rules and regulations to be applied in
the governance of the company. Section 27 of the 1956 Act
covered regulations especially need to be included in
the article of unlimited company of the Business Registration.
Section 28 of the 1956 Act dealt with company limited by
shares and provided that a company limited by shares may
adopt all or any of the regulations contained in Table A in
Schedule 1 to the 1956 Act.
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3. Business Registration
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 Section 29 of the 1956 Act dealt with article of
association of any company, not being a
company limited by shares and provided that the
article shall be in such one of the forms in Tables
C,D and E in Schedule 1 as may be applicable. The
provision was added to section 29 of the 1956 Act
which is similar to the Companies (Amendment)
Act, 1960. The provision further clarified that a
company other than those in the applicable Tables
in Schedule 1 as long as they were not
inconsistent with the provisions contained in the
Forms in any of the applicable Tables.

5. Companies Act, 2013: Section 5
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 Section 5 of the 2013 Act notified and has been in
effect form 01-04-2014. Section 5 of the 2013 Act is
a combination of sections 26 to 29 of the 1956 Act.
MCA identifies section 30 of the 1956 Act also as
a corresponding provision however there is no
specific provision in section 5 of the 2013 Act
which corresponds to section 30 of the 1956 Act.
Section 5 of the 2013 Act of Business
Registration introduces in addition to the
provisions in sections 26 to 29 of the 1956 Act,
certain new provisions relating to Article.

6. Business Registration
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 Every company has to have article under the 2013 Act. In the
1956 Act there was no obligation to register article in case
of public companies.
 Companies have the choice to adopt with or without
modifications the article in Table F,G,H,I, and J of Schedule 1 of
the 2013 Act. However, the article shall also contain such
matters as may be prescribed in the Rules. Freedom has been
given to the companies to include such other matters in the
article which, a company considers necessary for its
management. Rule 11 of the companies (Incorporation) Rules,
2014 also provides that the model articles as prescribed in Table
F,G,H,I and J of the schedule 1 may be adopted by a company
as may be applicable to the case of the company
registration either in totally or otherwise.
 Entrenchment provisions have been introduced in the 2013 Act
in respect of the article of association, which implies that it may
contain provisions for entrenchment to the effect that specified
provisions of the Article can be altered only if conditions that
are more restrictive than those applicable in case of special
resolutions are met with.

8. Entrenchment of the Articles
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 This is an important provision. This provision is in line with
Section 22 of English Act, 2006. In most of the joint venture
companies, on the basis of joint venture agreements,
provisions are made in the article for affirmative votes in
Board and General Meetings, Compulsory presence for
quorum purposes both in the Board and General meetings
etc., These articles have been contended to the repugnant to
the provisions of the Act in terms of section 9 of the 1956 Act
(now section 6 of the 2013 Act). Unfortunately, the provision
of retrenchment under section 5 of the 2013 Act relates only to
alterations to the article notwithstanding the fact that, judicial
decisions support the view that provisions relating to
affirmative vote and compulsory quorum are valid in law.
Rule 10 of Companies (Incorporation) Rules, 2014contains
provisions relating to notice to the Registrar where
entrenchment provisions are included in the article.

9. Article of Association : Section 5(1) and (2)
of the Companies Act, 2013
 Sub-section (1) of section 5 of
the 2013 provides that
the article of a company shall
include regulations for
management of affairs of the
company. The articles of a
company are required to
contain matters prescribed in
Rule 11
of Companies(Incorporation)
Rules, 2014. The provision,
however, clarifies that
additional matters other than
those prescribed in the rules,
which are considered in
necessary for management,
may also be included in the
article.
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10. Model Article [Section 5(6) to (8)
of the Companies Act, 2013]
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 Section 5(6) of the 2013 Act provides that the article of
the company shall be in forms contained in tables F,G,H,I and J in
schedule 1 to the 2013 Act as may be applicable to the company.
Sub-section 7 of section 5 of the 2013 Act however grants flexibility
to the companies to adopt the any or all of the regulations set out in
the model articles. It is prudent to adopt article given in Schedule 1
of the 2013 Act as it is, except where the Act, itself facilitates the
companies to have their own article. Section 5(7) of the 2013 Act
read with Rule 11 of the Companies (Incorporation) Rules,
2014 facilitates a company to adopt the articles in as given in the
model article as applicable to the company either in full or in part.
However, pursuant to section 5(8) of the 2013 Act in the case of a
company registered after the commencement of the 2013 Act, where
the articles registered by the company to extend have not excluded
or modified the regulations contained in the model article
applicable to them, the regulations of the model article shall be the
regulations of the company as if they were contained in the duly
registered articles of the company.

11. Provisions not applicable to
companies
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 Sub-section (9) of the 2013 Act excludes the
operation of section 5 in respect of article
registered under previous company law unless
the articles are amended under the 2013 Act. The
impact of section 5(9) of the 2013 Act, is that
the companies are at liberty to restrain their
existing article and it need not to be altered to fall
in line with the new model article given under
Schedule 1 to the 2013 Act. However the
companies are at liberty to modify their articles in
accordance with the 2013 Act to fall in line with
the requirements of the 2013 Act.

12. Business Registration
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13. Relevant Rules issued under
Companies Act, 2013
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 The provisions related to section 5 of the 2013 Act in terms of its
implementation are carried in the Companies (Incorporation)
Rules, 2014. Rules 10 and 11 of Companies (Incorporation) Rules,
2014 are reproduced below for reference:
 Rule 10: Where the articles provides the provisions for
entrenchment, the company shall provide notice to the Registrar of
such provisions in Form No. INC.7, as the case may be, along with
the fee as given in the Companies (Registration offices and fees)
Rules, 2014 at the time of incorporation of the company or the time
of business registration or in case of existing companies, the same
shall be filed in Form No. MGT. 14 within one month from the date
of entrenchment of the article, as the case may be, along with the
fees as provided in the Companies(Registration offices and
fees)Rules, 2014 of the Business Registration.
 Rule 11: The model articles as prescribed in Table F,G,H,I, and J of
Schedule 1 may be adopted by a company as may be applicable to
the case of the company, either in totality or otherwise.