Companies Act Section 4

Companies Act Section 4. 

1. The Memorandum of a Company Must Include:

(a) The name of the company, ending with “Limited” if it is a public limited company or “Private Limited” if it is a private limited company. 

This clause does not apply to companies registered under Section 8.

(b) The State where the registered office of the company will be located.

(c) The objectives for which the company is being formed, and any additional matters deemed necessary for achieving those objectives.

(d) The liability of the company’s members, specifying whether it is limited or unlimited, and include:

(i) For a company limited by shares: 

The liability of members is limited to any unpaid amount on shares held by them.

(ii) For a company limited by guarantee:

The amount each member agrees to contribute:

(A) To the company’s assets if it is wound up while they are a member or within one year after they cease to be a member, for settling the company’s debts and liabilities contracted before they ceased to be a member.

(B) To the costs, charges, and expenses of winding up and the adjustment of rights among contributories.

(e) For companies with share capital:

(i) The total amount of share capital and its division into fixed amounts of shares, including the number of shares each subscriber to the memorandum agrees to take, which must be at least one share.

(ii) The number of shares each subscriber intends to take, noted next to their name.

(f) For a One Person Company, the name of the person who will become the member if the subscriber dies.

2. Naming Restrictions:

(a) The company name must not be identical to or closely resemble the name of an existing company registered under this Act or any previous company law.

(b) The company name must not:

(i) Violate any law currently in force.

(ii) Be deemed undesirable by the Central Government.

3. Prohibited Names:

(a) The company name must not include any word or expression that might imply a connection with or endorsement by the Central Government, any State Government, or any local authority, corporation, or body established by the Central or State Government.

(b) The company name must not include any word or expression specified by regulations unless prior approval from the Central Government has been obtained.

4. Reservation of Name:

(a) A person may apply to the Registrar, in the prescribed form and manner, and pay the prescribed fee, to reserve a name:

(i) For a proposed company.

(ii) For a change of name for an existing company.

5. Reservation Process:

(i) Upon receiving an application, the Registrar may reserve the name for twenty days from the date of approval, or for a longer period if prescribed.

For name changes or existing companies, the reservation may be for sixty days from the approval date.

(ii) If the name was reserved based on incorrect information:

(a) If the company is not incorporated, the reservation is canceled and the applicant may face a penalty of up to one lakh rupees.

(b) If the company is incorporated, the Registrar may:

(i) Direct the company to change its name within three months through an ordinary resolution.

(ii) Take action to strike off the company’s name from the register.

(iii) File a petition for the company’s winding up.

6. Memorandum Forms:

The memorandum must be in the forms specified in Tables A, B, C, D, and E in Schedule I, as applicable.

7. Provisions in the Memorandum or Articles:

Any provision in the memorandum or articles of a company limited by guarantee and without share capital, which grants any person the right to share in the company’s divisible profits other than as a member, is void.