Sometimes contracts thus made on behalf of a company even before duly incorporated. After registration completed under the Companies Act, a company becomes vested with corporate personality, which is independent and distinct from its members. 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Section 15 of the Act provides that where the promoters of a company have made a contract before its incorporation for the purposes of the company, and if the contract is warranted by the terms of incorporation, the company may adopt and enforce it. But this is subject to the provisions of the Specific Relief Act, 1963. incorporation definition: 1. the act of including something as part of something larger: 2. the act of including something…. As soon as a company incorporated, whether public or private limited, it becomes a juristic person. student of New Law College. Incorporation is a very expensive affair. Section 19 of the Specific Relief Act provides that the other party can also enforce the contract if the company has adopted it after incorporation and the contract is within the terms of incorporation. Sebastian M. Hongray vs Union Of India & Ors (23 April 1984), I.R. A company is a separate legal entity from its owners, with its own rights and obligations. The lessor thus held bound to the company under the lease. Sec 82 gives expression to this principle by providing that “the shares or other interest of any member shall be movable property, transferable in the manner provided by the articles of the company.” When joint stock companies were established the great object was that the shares should be capable of being easily transferred. The company came into being but, before paying the price went into liquidation. On the one hand they run the company as its owner (Policy maker) and on the other hand they are merely a servant of the company and take remuneration. The names of managerial members need not pleaded. Hence they were held personally liable to the plaintiff. The separate existence of a company may disregard when the only purpose for which it appears to have formed concluded as the evasion of taxes. To cause to form into a legal corporation: incorporate a business. The laws applicable for incorporating a company in India include the India Companies Act 2013, read with Companies (Central Governments) General Rules and Forms, the Indian Income Tax Act, and other laws & regulations. They are as follows:-. The property of an incorporated company thus vested in the corporate body. However called as pre-incorporation contracts. All content on this website, including dictionary, thesaurus, literature, geography, and other reference data is for informational purposes only. In English and Colonial Produce Co, Re, a solicitor on the request of promoters prepared a company’s documents and spent time and money in getting it registered but the company was not bound to pay for those services and expenses. The directors also called the ears, eyes and hands of the company. Any action done by the directors in the ordinary course of business thus treated as complete work done by the Company. platform of ALL MR ONLINE. The company, being a separate entity, leading its own business life, the members are not liable for its debts. In this article the meaning of incorporation has explained in a broader sense. A company is a legal person. It has its own name and property. Incorporation however the legal process used to form a company or corporate entity. Members may come and go, but the company will go on forever. To give substance or material form to; embody. Legal Definition of 'Incorporated' In its most technical, formal sense, the word "incorporated" means that a business has formed a corporation in one of the 50 states and is therefore a legal entity separate from its owners. Incorporation offers certain advantages to a company as compared with all other kinds of business organizations. Corporations can only deduct net operating losses going back two years and forward 20 years. The company is capable of holding and enjoying property in its own name. INCORPORATION, civil law. Incorporation definition is - the act or an instance of incorporating : something or the state of being incorporated. Directors thus entitled to do any work on behalf of the company, what a company can do in ordinary course of business. In Natal Land and Colonization Co v. Pauline Colliery Syndicate, the promoters of a proposed company obtained an agreement from a landlord that he would grant lease of coal mining rights to the company. 3 years course Results declared on 29th June 2018 – Official Link Provided, Highlights of Budget For Financial Year 2018-19, Section 149 : Dispute concerning right of use of land or water, Shares and Debentures Rules, 2014: Sweat Equity Shares, Negotiable Instrument Act overview with supreme court landmark cases. Limitation of liability is another major advantage of incorporation. The process involves various stages, such as creating the articles of incorporation… It requires a number of formalities to complie with both as to the formation and administration of affairs. Company can create in nearly all countries in the world and usually identified by the use of terms such as “Inc.” or “Limited” in their names. No members, not even all the members, can claim ownership of any asset of company’s assets. Incorporation means that the owner(s) of a business have separated their business and personal finances from each other to reduce personal liability. This term is frequently confounded, particularly in the old Such items thus done by the company in general meeting. A company has no physical existence, it must act through its agents and all such contracts entered into by such agents must be under the seal of the company. The Act sometimes imposes personal liability on persons behind the veil in some instances like, where business is carried on beyond six months after the knowledge that the membership of company has gone below statutory minimum(sec 45), when contract is made by prescribing the name of the company(sec 147), when business is carried on only to defraud creditors(sec 542). This is done by drawing up articles of incorporation and submitting them to the state in which the new business entity is to be headquartered. The previous law was India Companies Act of 1956. Incorporate in business law refers to the legal process or forming a corporation. corporation is meant the body thus created. In business, to incorporate means to form a legal business entity. This information should not be considered complete, up to date, and is not intended to be used in place of a visit, consultation, or advice of a legal, medical, or any other professional. books, with corporation. Classical use of language and adeptness with the written word make her treasure useful legal information. An incorporated company never dies. (See: corporation, incorporate). Coelho (Dead) By Lrs vs State Of Tamil Nadu & Ors on 11 January, 2007, Federation of Mining Associations v. State of Rajasthan. The Foreign Exchange Management Act of 1999 is applicable for foreign investments and transactions. However company is a separate legal entity distinct from its members who incorporate it.