Section 9 and Section 10 of Companies Act, 2013: Effect of Registration, Memorandum and Articles
Sections 9 and 10 of the Companies Act, 2013 explain two important legal consequences of incorporation. Section 9 deals with the legal effect of registration of a company, while Section 10 explains the binding effect of the registered memorandum and articles on the company and its members.
Section 9: Incorporation creates a body corporate having perpetual succession and the legal capacity to own property, enter into contracts, and sue or be sued in its corporate name.
Section 10: Once registered, the memorandum and articles bind the company and its members in the manner prescribed by the Act. Money payable by a member under those documents is treated as a debt due to the company.
Section 9 - Effect of Registration under Companies Act, 2013
Section 9 of the Companies Act, 2013 specifies the legal effect that follows when a company is incorporated. The relevant date is the date of incorporation stated in the certificate of incorporation.
Meaning of "Effect of Registration"
The effect of registration is that the subscribers to the memorandum, together with persons who subsequently become members, constitute a body corporate under the name stated in the memorandum. The company consequently acquires a legal identity under the Companies Act, 2013.
What Section 9 provides
From the date of incorporation mentioned in the certificate of incorporation, the subscribers to the memorandum and all other persons who become members of the company constitute a body corporate by the name contained in the memorandum.
The incorporated company is capable of exercising the functions of an incorporated company under the Companies Act, 2013. It has perpetual succession and may acquire, hold and dispose of movable and immovable, tangible and intangible property, enter into contracts, and sue or be sued in its corporate name.
The Ministry of Corporate Affairs publishes the Companies Act, 2013 and amendments to the Act. The current statutory text should always be checked where the precise wording of the provision is material.
Read the Companies Act, 2013 on the Ministry of Corporate Affairs website.
Legal consequences of incorporation under Section 9
- Body corporate: The registered company becomes a corporate body under its registered name.
- Perpetual succession: Changes in shareholders or members do not by themselves terminate the existence of the company.
- Property: The company has statutory capacity to acquire, hold and dispose of movable, immovable, tangible and intangible property.
- Contracts: The incorporated company has capacity to enter into contracts in its corporate capacity, subject to applicable law.
- Legal proceedings: The company can sue and can be sued in its registered name.
- Corporate functions: It can exercise the functions of an incorporated company subject to the Companies Act, 2013 and other applicable laws.
Section 10 - Effect of Memorandum and Articles
Section 10 of the Companies Act, 2013 deals with the legal effect of a company's registered memorandum and articles. The provision operates subject to the other provisions of the Companies Act.
What are the Memorandum and Articles?
The memorandum of association is the constitutional document containing matters required by Section 4 of the Companies Act, 2013, including matters relating to the company's name, registered office State, objects, liability and capital, as applicable.
The articles of association contain regulations for the management of the company in accordance with Section 5 of the Companies Act, 2013.
For detailed information, see Section 4 - Memorandum of Company and Section 5 - Articles of Association.
Section 10(1) - Binding effect
Subject to the provisions of the Companies Act, the memorandum and articles, when registered, bind the company and its members to the same extent as if they had respectively been signed by the company and by each member and contained covenants to observe the provisions of the memorandum and articles.
The important qualification is that Section 10 operates subject to the Companies Act, 2013. The memorandum and articles cannot override a mandatory provision of the Act.
This should also be read with Section 6 - Act to override memorandum and articles. Section 6 gives the provisions of the Companies Act overriding effect where the memorandum, articles, an agreement or a company resolution is inconsistent with the Act.
Section 10(2) - Money payable by a member
Section 10(2) provides that money payable by a member to the company under the memorandum or articles is a debt due from that member to the company.
Section 9 and Section 10 - Key Difference
| Provision | Subject | Principal Effect |
|---|---|---|
| Section 9 | Effect of registration | Establishes the corporate consequences of incorporation, including perpetual succession and capacity to own property, contract, and sue or be sued. |
| Section 10(1) | Memorandum and articles | Makes the registered memorandum and articles binding on the company and its members, subject to the Act. |
| Section 10(2) | Money payable by members | Treats money payable by a member under the memorandum or articles as a debt due to the company. |
Relationship with Other Incorporation Provisions
Sections 9 and 10 form part of the statutory framework governing incorporation and the constitutional documents of a company. They should therefore be read with other relevant provisions of the Companies Act, 2013.
- Section 3 - Formation of Company
- Section 4 - Memorandum of Company
- Section 5 - Articles of Association
- Section 6 - Act to Override Memorandum and Articles
- Section 7 - Incorporation of Company
- Section 8 - Companies with Charitable Objects
- Section 12 - Registered Office of Company
- Section 13 - Alteration of Memorandum
- Section 14 - Alteration of Articles
Official Companies Act Resources
For the current statutory text, amendments, rules, notifications, forms and MCA21 filing services, refer to the Ministry of Corporate Affairs. Since company law may be amended through legislation, notifications and rules, the latest official material should be checked before taking action based on a statutory provision.