CONCLUSIVENESS OF

CERTIFICATE OF
INCORPORATION UNDER
COMPANIES ACT 1956 AND
CHANGES IN LIGHT OF
COMPANIES ACT 2013.
 INTRODUCTION

Certificate of Incorporation is like a birth certificate for the Company, without which in the legal
world it cant come into existence and Section 34 and 35 of the companies Act, 1956 deals with
the requirement of the Certificate of Incorporation.

Certificate of Incorporation is conclusive evidence that all the formalities and requirements of
Companies Act have been complied off, related to formation and matters precedent and
incidental thereto, and that the association is a company authorized to be registered and duly
registered under this Act. Certificate of Incorporation is issued by the Registrar of
companies and each state is having their own registrar of Companies, so it registers the
Company once all the documentary requirement are fulfilled for registration and it issue the
Certificate of Incorporation. In India all the documents are filed through online portal of Ministry
of Corporate Affairs generally know as MCA.

Certificate of Incorporation states that the company has came into existence from the earliest
moment of the day of incorporation stated in the Certificate of Incorporation. Once the certificate
of incorporation is issued, the validity of registration of company cannot be impeached or
challenged.
 Is Certificate of Incorporation of a Company Conclusive Evidence?
(Indian Companies Act, 1956)

According to Sec. 35, certificate of incorporation is conclusive evidence with regard to the
proper and regular registration and formation of a company. It cannot be challenged even if
irregularities prior to registration are subsequently discovered.
It is considered as conclusive even if it was legally impossible that the company could have been
properly registered, e.g., signatures of all the members were forged or where instead of seven
only six members had really signed or the persons signing were incompetent to enter into
contracts etc.

The date appearing on the certificate of incorporation is conclusive even if it is wrong. The
validity of the certificate of incorporation cannot be disputed on any grounds whatsoever.
However, grant of the certificate of incorporation to the company will not make the objects of
the company legal if they are otherwise illegal.

The memorandum of association of a company, after signature of the subscribers, was materially
altered without their consent. However, the Registrar issued the certificate of incorporation.

The subscribers objection was that they never signed the memorandum with which the company
was registered since the original memorandum was altered in a way so as to neutralize and
annihilate the original execution and signature of the document.

But the learned judge observed, when once the certificate of incorporation is given, nothing is
to be inquired into as to regularity of the prior proceedings. It was, therefore, held that company
was properly incorporated.
SOME LANDMARK CASES RELATED TO
CERTIFICATE OF INCORPORATION

Moosa Goolam Arif v. Ebrahim Goolam Ariff (1913):

Out of the seven subscribers to the memorandum of association of a company five were minors.
The guardians of the minors made separate signatures for each minor on the memorandum of
association.

The Registrar, however, issued the certificate of incorporation. The validity of certificate of
incorporation was challenged. It was held that though the Registrar should not have issued the
certificate but the certificate was conclusive for all purposes.

Jubilee Cotton Mills Ltd. v Lewis (1924):

On 6th January, 1920 the necessary documents were delivered to the Registrar for registration.
Two days later he issued the certificate of incorporation but dated it 6thJanuary instead of 8th.
On 6th January, company allotted shares to Lewis. It was contended to be void since the company
was not in existence on that date. It was held that the certificate of incorporation is conclusive
evidence of all that it contains. Therefore, in law the company was formed on 6th January and
allotment of shares was valid.
In brief, the certificate of incorporation is conclusive with regard to the following matters:

(a) That the association has been duly registered under the Act.

(b) That it was properly authorized to be registered as a company under the Act.

(c) That the date borne by the certificate of incorporation is the date of the birth of the company.
The company shall be deemed to have come into existence on that very date.
(d) That all the requirements of the Act in respect of the registration and of matters precedent and
incidental thereto have been complied with.

Thus, in case certificate of incorporation is improperly procured, the legal personality of the
company cannot be extinguished by cancellation of the certificate of incorporation.

CONCLUSIVENESS OF CERTIFICATE OF INCORPORATION UNDER

COMPANIES ACT 2013

As per the companies act, 2013, certificate of incorporation is not conclusive proof of everything
prior to incorporation being in order

Sub section (5) (6) and (7) of section 7 make furnishing of any false or incorrect particulars of
any information or suppression of any material information or suppression of any material
information punishable with a minimum of six month imprisonment which may extend up to 10
years and also fine which shall not be less than amount involved in the fraud but which may
extend to three times the amount involved in the fraud.

Besides the aforesaid penalty, the tribunal may, on a application made to it, and on being
satisfied that the situation so warrants,-

(a) Pass such orders, as it may think fit, for regulation of the management of the company
including changes, if any, in its memorandum and articles, in public interest or in the
interest or in the interest of the company and its members and creditors; or

(b) Direct that liability of the members shall be unlimited; or

(c) Direct removal of the name of the company from the register of companies; or

(d) Pass an order for the winding up of the company; or

(e) Pass such other orders as it may deem fit

 However, before making any order, as aforesaid,-

1. The company shall be given a reasonable opportunity of being heard in the matter; and

2. The tribunal shall take into consideration the transaction entered into by the company,
including the obligations, if any, contracted or payment of any liability

You should also note that the certificate of incorporation is not the conclusive proof with
respect to the legality of the object of the company mentioned in the objects clause of the
memorandum of association. As such, if a company has been registered whose objects are
illegal, the incorporation does not validate the illegal objects.

In such case the remedy available is to wind up the company

CONCLUSION

Sections 34 and 35 of the Companies, Act, 1956 provided for the conclusiveness of the
Certificate of Incorporation. But this concept seems to have lost its efficacy because Section 7
(7) of the new Companies Act, 2013 empowers the Tribunal to pass an order for the winding up
of the company or remove the name of the company from the Register of Companies. The
Tribunal can take such an action when it is proved that the company had been incorporated by
furnishing any false or incorrect information or representation or by suppressing any material
fact or information in any of the documents or declaration filed or made for incorporation or by
any fraudulent action. However, before making any order, the Tribunal shall give the company a
reasonable opportunity of being heard. Thus, as per section 7 (7) of the Companies Act, 2013,
the Certificate of Incorporation is no more conclusive.