Section 9: Effect of registration.

Chapter II

Provisions of the Companies Act, 2013:
Section 9 Effect of Registration
[Section 9 is not yet brought to force]

Corresponding provisions of the Companies Act, 1956:
Section 34

Corresponding provisions of the English Companies Act, 2006
Section 16

This provision is applicable to all companies.

The registration of a company has following effects from the date of its incorporation:
1) the subscribers to the memorandum are body of persons, called ‘body corporate’ by the name of a company. And it is treated as an artificial, distinct and an independent person under law. It is not a group of persons like under Hindu Undivided Family or partnership firms. It is treated in law as a separate person from its members.
2) all persons, as may from time to time become members of the company, are also treated as ‘body corporate’ by the name of the company.
3) Body corporate becomes capable of exercising all the functions of an incorporated company. In law company has rights, privileges and duties.
4) Body corporate to have perpetual succession, i.e. directors and members may come and go but the company continues. A company does not get affected by lunacy or bankruptcy or death of its members. A company is also independent of its assets or business, meaning that even if all of its assets or entire business is takeover by others, it does not mean that the company does not exist.
5) Body corporate may have a common seal.
6) Body corporate can in its name,
(a) acquire, hold or dispose off property, both movable and immovable, as well as tangible and intangible;
(b) enter into contract; and
(c) sue others and itself can be sued by others.
For example, a company can file a suit for recovery upon cheque bouncing or even file a suit for defamation. Even criminal complaints can be filed by a company but it must be represented by a natural person.
Though, a company is not ‘citizen’ but it’s members, if citizen of India, can file suit himself and on behalf of company to claim benefits of freedom guaranteed under Article 19 of the Constitution of India. [State Trading Corporation of India Ltd. v. CTO (1963) 33 Comp Cas 1057 (SC)].

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