• Invest in India
  • Corporate Legal Services

Rules Relating to Subscription of Memorandum and Articles of Association at the Time of Company Incorporation

August 18, 2014     by CS Smriti Sharma

At the time of incorporation of new company Subscriber are required to sign the subscription page to be attached with MOA & AOA. Rule 13 of Companies (Incorporation) Rules, 2014 explains the signing of memorandum and articles..

The Memorandum and Articles of Association of the company shall be signed in the following manner, namely:-.

(1) The memorandum and articles of association of the company shall be signed by each subscriber to the memorandum, who shall add his name, address, description and occupation, if any, in the presence of at least one witness who shall attest the signature and shall likewise sign and add his name, address, description and occupation, if any and the witness shall state that

“I witness to subscriber/subscriber(s), who has/have subscribed and signed in my presence (date and place to be given); further I have verified his or their Identity Details (ID) for their identification and satisfied myself of his/her/their identification particulars as filled in”.

(2) Illiterate: Where a subscriber to the memorandum is illiterate, he shall affix his thumb impression or mark which shall be described as such by the person, writing for him, who shall place the name of the subscriber against or below the mark and authenticate it by his own signature and he shall also write against the name of the subscriber, the number of shares taken by him..

(3) Such person shall also read and explain the contents of the memorandum and articles of association to the subscriber and make an endorsement to that effect on the memorandum and articles of association..

(4) Body Corporate: Where the subscriber to the memorandum is a body corporate, the memorandum and articles of association shall be signed by director, officer or employee of the body corporate duly authorized in this behalf by a resolution of the board of directors of the body corporate and where the subscriber is a Limited Liability Partnership, it shall be signed by a partner of the Limited Liability Partnership, duly authorized by a resolution approved by all the partners of the Limited Liability Partnership:

Provided that in either case, the person so authorized shall not, at the same time, be a subscriber to the memorandum and articles of Association..

(5) Foreign National: Where subscriber to the memorandum is a foreign national residing outside India-

  • in a country in any part of the Commonwealth, his signatures and address on the memorandum and articles of association and proof of identity shall be notarized by a Notary (Public) in that part of the Commonwealth.
  • in a country which is a party to the Hague Apostille Convention, 1961, his signatures and address on the memorandum and articles of association and proof of identity shall be notarized before the Notary (Public) of the country of his origin and be duly apostillised in accordance with the said Hague Convention.
  • in a country outside the Commonwealth and which is not a party to the Hague Apostille Convention, 1961, his signatures and address on the memorandum and articles of association and proof of identity, shall be notarized before the Notary (Public) of such country and the certificate of the Notary (Public) shall be authenticated by a Diplomatic or Consular Officer empowered in this behalf under section 3 of the Diplomatic and Consular Officers (Oaths and Fees) Act, 1948 (40 of 1948) or, where there is no such officer by any of the officials mentioned in section 6 of the Commissioners of Oaths Act, 1889 (52 and 53 Vic.C.10), or in any Act amending the same;
  • visited in India and intended to incorporate a company, in such case the incorporation shall be allowed if, he/she is having a valid Business Visa.

Explanation.- For the purposes of this clause, it is hereby clarified that, in case of Person is of Indian Origin or Overseas Citizen of India, requirement of business Visa shall not be applicable..

For other articles on Post Incorporation compliances under Companies Act, 1956 kindly visit Post Incorporation Compliances under Companies Act, 2013 & for compliances under FEMA where one or more subscriber is Foreign National visit Post Incorporation Compliances under FEMA

***


.

27 thoughts on “Rules Relating to Subscription of Memorandum and Articles of Association at the Time of Company Incorporation

  1. Hi,
    In the case, Mr. A is nominee shareholder on behalf of Company (holding company) and now Company (holding company) proposes to change its nominee shareholder. Here the company is Private Company. What is the procedure regarding the same?

    Thanks and Regards

  2. Sir, please guide, what will be the way out, if subscriber at the time of incorporate subscriber 5 lakhs shares, but eventually cost of project was reduced
    thereby after incorporation paid application money only for 2.5 lakh. And Company has no issue with the same. Can Company wave off such liability

    1. The money payable by subscribers is a debt due to the company as per section 10(2) of the Act. They have to pay it.
      There are means to reduce share capital subsequently u/s 66 but that is a long drawn process.

  3. Sir i just want to ask ,2 Foreign companies are applying for subscription of MOA and AOA ,so do they have to subscribe separately or not as both the companies are from 2 different Countries and how many Athuorised Representatives are required for the same and Sir Please Assist me with the formatting of Board Resolution for the same.

    1. “Apologies for the delay in reverting with the solution to your query. Please find the answer to your query as follows:
      Pursuant to Rule 13(4) of Companies (Incorporation) Rule 2014 “Where the subscriber to the memorandum is a body corporate then for subscribing to the MOA and AOA, the company can authorize any of its director, officer or employee of the body corporate in this behalf by a resolution of the board of directors of the body corporate.
      A Company is a separate legal entity. It has its own separate existence. In your case there are two Foreign company which are subscribing to the MOA and AOA. Both of these companies can subscribe to MOA and AOA by showing separately their respective subscription on the subscription sheet of MOA and AOA. And the same can signed by the authorized representative on behalf of the company.”

  4. Dear Samrish
    In case of 100 % subsidiary of foreign company. One subscriber is foreign company represented by NR authorised signatory.

    Can Same authorised signatory would also be nominee shareholder.

    If yes it means subscriber sheet would be signed by same person.

    Further since the person is outside India, do we need to fill witness column and if yes who will do the witness

    1. Apologies in late revert to your query. Please find below the reply to your query:
      As per the provisions of rule 13 (4) of the Companies (Incorporation) Rules, 2014:
      Where the subscriber to the memorandum is a body corporate, the memorandum and articles of association shall be signed by the person duly authorized in this behalf by a resolution of the board of directors.

      Provided that in either case, the person so authorized shall not, at the same time, be a subscriber to the memorandum and articles of Association.
      Therefore, Same authorised signatory cannot be a nominee shareholder as well.

      if the subscriber sheet is notarised and appostiled outside India then the same need not be witnessed in India by a Practising Professional.

  5. Sir/Mam
    I want to know the reason behind that why subscription clause can’t be altered and in case if it can be altered then what is the process for the same?

    1. Subscription clause is the clause in Memorandum of Association of the company which states the name of originator of the company at the time of incorporation of the company, by whom memorandum sheet has been subscribed and Memorandum Sheet is subscribed only once in the life time of the Company. This is the only reason that subscription clause cannot be altered.

  6. Dear All,
    I need to alter our company MOA & AOA due to name change. While altering the same whether i need to change the subsciber sheet or can i continue the same subsciber sheet which is filed during Incorporation of company.(Note : One subsciber changed as they not hold any shares now ).
    Earlier company is Incorporated with Companies Act 1956, Is there any odification needs to be made to subscriber sheet as per Companies act 2013 ? Please clariffy the same. Thanks & Regards,
    BHARATH

    Read more at: http://www.caclubindia.com/forum/alteration-of-moa-amp-aoa-395081.asp

    1. While changing name of the Co., there is no need to change the first subscribers sheet attached with MOA & AOA at the time of incorporation. No modification in the subscribers sheet is needed as per new rules of Companies Act 2013, the reason being company got incorporated under Companies Act, 1956, and subscribers sheet be prepared as per rules prevailing at the time of incorporation.

  7. Dear Sir,
    As i have to incorporate Pvt. Ltd. Co. in which one is Resident director and another is Foreign Director, So what are the compliances that have to follow by Foreign Proposed Director in case of INC-9, INC-10, Affidavit-11, if Foreign Director is Russian??

  8. Dear Sir,
    If the subscriber is NRI, Is there any requirement to comply with respect to RBI? Is there any limit on value of the shares applied by him?
    Thanks in advance

    1. Compliance requirements are not different in case of Non Resident or Non Resident Indian. Reporting requirements are same in both cases.
      • Advanced Reporting Form and KYC report shall be filed by the company within 30 days of receipt of money. The KYC Report shall be acknowledged by the concerned regional office of RBI which will allot a Unique Identification Number for the amount reported.
      • Form FC-GPR shall be filed by the company within 30 days of the date of issue of shares.
      • Annual Return on Foreign Liabilities and Assets shall be filed by the company every year by 15th July.

  9. What are the liabilities of director/authorised person signing moa & aoa on behalf of corporate co. for registration of new entity under society

  10. Which provision of Company Law mandates the witness part and share-holding details part shall be handwritten? I know it is mandatory. I need the provisions.

  11. Which provision of Company law says that witness part and share holding details in subscribers page shall be handwritten? I need the provision only. I know it is mandatory

  12. If a foreign company is one of the subscriber in private company but only on MOA not actually then what is the procedure to change that subscriber and subscribe shares to a resident in place of that foreigner?
    Thanks in advance.

    1. As per Incorporation Rules subscriber sheet can’t be altered. You may consider completing the procedure of issue of shares followed by compliances of Foreign Exchange laws (FEMA) for FDI. Thereafter, transfer the shares by again following the procedure prescribed for transfer of shares from Non resident to resident (FCTRS).

  13. If a foreign holding company was one of the subscriber of its subsidiary company in India and the holding company doesnot have any bank account due to which we cannot receive the subscription amount can the subscriber be changed????If not, then any solution so that the subscription amount can be received??

    Thanks in advance

      1. Hi Mr. Samrish, if subscribers to MOA after incorporation are not agreed to subscribe the shares but they are ready to give NOC to other persons to become subscribers and subscribe the shares whether they can do so. if not then please let me know the provision/rule where this restriction is mentioned in the Companies Act, 2013.
        Thanks in advance!

Leave a Reply

Your email address will not be published. Required fields are marked *


Please Fill All Field

" "