company enjoy a fiduciary position with the company, which they must not misuse. They can make a profit only if it is disclosed but must not make any secret profits. In the event of a non-disclosure, the company can rescind the contract and recover the purchase price paid to the promoters. It can also claim damages Qualification Shares To ensure that the directors have some stake in the proposed company, the Articles usually have a provision requiring them to buy a certain number of shares.
They have to pay for these shares before the company obtains Certificate of Commencement of Business. These are called Qualification Shares. for the loss suffered due to the non-disclosure of material information. Promoters are not legally entitled to claim the expenses incurred in the promotion of the company.
However, the company may choose to reimburse them for the pre-incorporation expenses. The company may also remunerate the promoters for their efforts by paying a lump sum amount or a commission on the purchase price of property purchased through them or on the shares sold. The company may also allot them shares or debentures or give them an option to purchase the securities at a future date. .
. Incorporation After completing the aforesaid formalities, promoters make an Performa for Statutory Declaration “FORM NO. ” The Companies Act. Declaration of Compliance with requirements of the Companies Act, on Application for Registration of a Company.
PURSUANT TO SECTION ( ) NAME OF THE COMPANY : M/S. PRESENTED BY : SUSHIL KR. CHARTERED ACCOUNTANT. I, ........(NAME OF CA).......Partner of...
(NAME OF CA FIRM & ITS ADDRESS)..., do solemnly and sincerely declare that I am a Chartered Accountant in whole time practice in India, who is engaged in the formation of the company “M/s.———————————————— PRIVATE LIMITED”. And that all the requirements of the Companies Act, and the rules thereunder in respect of matters precedent to the registration of the said company and incidental thereto have been complied with and I make this solemn declaration conscientiously believing the same to be true. PLACE : NEW DELHI (NAME OF CA)