Certificate of Incorporation — Company Law Notes

Certificate of Incorporation

Once the Registrar signs the Certificate of Incorporation, the law slams the door on any argument that the company was defectively formed. Even if a subscriber was a forger or a minor, the certificate is conclusive — the company is validly born.

What the certificate does

The Certificate of Incorporation is the company’s birth certificate, issued by the Registrar under s.7(2). It certifies that the company is incorporated and (with the CIN) identifies it forever.

Its great legal effect is conclusiveness: the certificate is conclusive evidence that all requirements of the Act for registration have been complied with, and the company came into existence on the date stated. Once issued, the certificate cannot be challenged on the ground of any mere procedural irregularity in formation — courts will not go behind it. (The one modern exception: where a company was got incorporated by fraud or false information, s.7(7) lets the NCLT pass orders — even for regulation of management or removal from the register — so conclusiveness protects against technical defects, not fraud.) This gives certainty to everyone who deals with the company.

From the date on the certificate the company:

becomes a body corporate with a separate legal personality (Unit 1);
acquires perpetual succession and the capacity to contract, sue and hold property;
has the powers set out in its Memorandum.

Section 9: “From the date of incorporation… the subscribers… shall be a body corporate… capable of exercising all the functions of an incorporated company… and having perpetual succession and power to acquire, hold and dispose of property.”

In Simple Terms: The certificate is the company’s birth certificate, and it is final. After it is issued, nobody can say “the company was never properly formed.”

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Case Laws

Moosa Goolam Ariff v Ebrahim Goolam Ariff (1913) — Privy Council; certificate conclusive even though the memorandum was signed by a guardian for minors.
Jubilee Cotton Mills v Lewis (1924) — the date on the certificate is conclusive.

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