Question

Which of the following statements are correct in relation to the effect of registration of a company under the Companies Act, 2013?
(i) The members of the company becomes a body corporate.
(ii) The body corporate shall have perpetual succession.
(iii) The body corporate shall not use the name contained in the memorandum.
(iv) The body corporate can acquire and hold property in its name.

• A. Only (i), (ii), and (iii)
• B. Only (i), (ii), and (iv)
• C. Only (i), (iii), and (iv)
• D. Only (ii), (iii), and (iv)

Hint:

The landmark case of Salomon v. Salomon & Co. Ltd. established the foundation for Section 9.
Registration creates a corporate veil that separates the rights and liabilities of the company from those of its members.

Answer 1

The Correct Option is B

Step 1: Understanding the Question:
The question asks about the legal consequences and effects of incorporating and registering a company under Section 9 of the Companies Act, 2013.

Step 2: Key Principles and Statutory Provisions:
Section 9 of the Companies Act, 2013, defines the "Effect of Registration".
It establishes the legal status of the company as an independent legal entity from the date of its incorporation.

Step 3: Detailed Explanation and Analysis:

• Upon registration, the subscribers to the memorandum and all subsequent members become a collective body corporate.
This creates the "separate legal entity" status, separate from its individual members.
Therefore, statement (i) is correct.

• A registered company enjoys perpetual succession, meaning its existence is unaffected by the death, insolvency, or exit of its members.
"Members may come and members may go, but the company goes on forever."
Therefore, statement (ii) is correct.

• The company must use the name approved by the Registrar and set forth in its Memorandum of Association.
Therefore, statement (iii), which claims the company shall *not* use the name in the memorandum, is entirely false.

• As an independent legal person, the body corporate can purchase, own, lease, and transfer both movable and immovable property in its own corporate name.
Therefore, statement (iv) is correct.

Step 4: Final Answer:
Statements (i), (ii), and (iv) are correct, which corresponds to Option B.