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Section 3

Formation of company

(1)
A Company may be formed for any lawful purpose by—
(a)
seven or more persons, where the company to be formed is to be a public company;
(b)
two or more persons, where the company to be formed is to be a private company; or
(c)
One Person, where the company to be formed is to be One Person Company that is to say, a private company, by subscribing their names or his name to a memorandum and complying with the requirements of this Act in respect of registration:
Proviso

Provided that the memorandum of One Person Company shall indicate the name of the other person, with his prior written consent in the prescribed form , who shall, in the event of the subscriber’s death or his incapacity to contract become the member of the company and the written consent of such person shall also be filed with the Registrar at the time of incorporation of the One Person Company along with its memorandum and articles:

Proviso

Provided further that such other person may withdraw his consent in such manner as may be prescribed :

Proviso

Provided also that the member of One Person Company may at any time change the name of such other person by giving notice in such manner as may be prescribed :

Proviso

Provided also that it shall be the duty of the member of One Person Company to intimate the company the change, if any, in the name of the other person nominated by him by indicating in the memorandum or otherwise within such time and in such manner as may be prescribed, and the company shall intimate the Registrar any such change within such time and in such manner as may be prescribed :

Proviso

Provided also that any such change in the name of the person shall not be deemed to be an alteration of the memorandum.

(2)
A company formed under sub-section ( 1 ) may be either—
(a)
a company limited by shares; or
(b)
a company limited by guarantee; or
(c)
an unlimited company.
Proviso

Provided that a Specified IFSC public company shall be formed only as a company limited by shares.

Proviso

Provided that a Specified IFSC private company shall be formed only as a company limited by shares

Sec. 3A Members severally liable in certain cases

If at any time the number of members of a company is reduced, in the case of a public company, below seven, in the case of a private company, below two, and the company carries on business for more than six months while the number of members is so reduced, every person who is a member of the company during the time that it so carries on business after those six months and is cognisant of the fact that it is carrying on business with less than seven members or two members, as the case may be, shall be severally liable for the payment of the whole debts of the company contracted during that time, and may be severally sued therefor.

(3)
,
(4)
& Form Nos. INC-4 of The Companies(Incorporation) Rules, 2014. Form INC 4 has been revised vide MCA Notification dated 19.01.2023.
(5)
& Form Nos. INC-3 and INC-4 of The Companies(Incorporation) Rules, 2014.
Notes, amendments & references (10)

Refer Rule 3 of The Companies(Incorporation)Rules,2014. To view the rule, Click Here

Provided Refer Rule 4 of The Companies(Incorporation)Rules,2014. To view the rule, Click Here

Refer Form No.INC 3. To view the returns, Click Here

Refer Form No.INC-2. To view the return, Click Here

Refer Rule 4

Refer Rule 4 of The Companies(Incorporation)Rules,2014.To view the rule, Click Here

Refer Form No.INC-4 . To view the return, Click Here

Provided Inserted vide Exemption Notification to specified IFSC Public Companies, GSR 08 (E) dated 04.01.2017. To view the notification Click Here

Provided Inserted vide Exemption Notification to specified IFSC Private Companies GSR 9(E) dated 04.01.2017. To view the notification Click Here

Members severally liable in certain cases Inserted vide Companies (Amendment) Act, 2017 dated 03.01.2018. To view the notification, Click Here