Compliance Management, Audit and Due Diligence · Compliance Framework

Existing Companies and Registration under Section 367

Updated 11 October 2026 · Fact-checked

Section 367 says that once an existing entity meets the requirements of the Chapter on registration and pays the fees under section 403, the Registrar certifies that it is incorporated as a company under the Act, and as a limited company if it is one. From that moment the company stands incorporated. Section 366 decides who may apply.

Understand Existing Companies and Registration under Section 367

Some businesses already exist under other laws. They may be partnership firms, LLPs, cooperative societies, societies or other entities formed under a different law. The Act lets them register as a company under the Companies Act, 2013. This is called registration of an existing company, or conversion into a company.

Two sections work together. Section 366 answers who can register and on what conditions. Section 367 answers what happens at the end: the Registrar issues a certificate and the company is incorporated.

Under section 367 the Registrar acts only after two things happen: the entity complies with the requirements of the Chapter on registration, and it pays the fees, if any, payable under section 403. Then the Registrar certifies under his hand that the applicant is incorporated as a company under the Act. For a limited company, the certificate also says that it is limited. The words "thereupon the company shall be so incorporated" mean incorporation takes effect on the certificate.

Do not confuse this with section 18. Section 18(1) covers a company of any class registered under this Act that changes its class, for example private to public. Sections 366 and 367 cover entities formed under some other law that now come under the Act. A company registered under the 1882 Act, the 1913 Act or the Companies Act, 1956 is barred from section 366 by proviso (i).

Key rules to remember

Section 367 trigger: Compliance with the Chapter + fees under section 403 paid → Registrar certifies → company is incorporated; The Registrar certifies under his hand. For a limited company, the certificate also states that it is limited.
Meaning of company in this Part (s. 366(1)): Company includes a partnership firm, LLP, cooperative society, society or any other business entity formed under any other law that applies for registration; The word company is widened only for this Part.
Minimum members (s. 366(2)): Two or more members; fewer than seven members → must register as a private company; The old seven-member requirement was replaced in 2018. Clause (vii) of the proviso fixes the private company rule.
Member assent (s. 366(2) provisos): General meeting: majority of members present in person or by proxy where allowed; not less than three-fourths if the company without limited liability is registering as a limited company; On a poll, votes are counted according to the company's regulations (s. 366(3)).
Companies that cannot register under s. 366: Companies registered under the 1882 Act, 1913 Act or Companies Act, 1956 cannot register under this section; They are already companies, so this route is closed to them. Section 18 is a separate provision: it applies to a company of any class registered under this Act.
Limited by shares (s. 366(2)(iii)): Only if the entity has a permanent paid-up or nominal share capital of fixed amount divided into shares of fixed amount, or held as stock, and its members are the holders of those shares or stock and no other persons; A limited-liability entity under another law cannot register as unlimited or as guarantee company.
Guarantee company (s. 366(2)(vi)): Assent must be accompanied by a resolution that each member undertakes to contribute up to a specified amount on winding up; The liability covers the period while a member and within one year after he ceases to be a member.

How to solve Existing Companies and Registration under Section 367 questions

Use this order for any question on registration of an existing entity. Provision first, then facts, then conclusion.

1Identify the entity and the law under which it was formed. Check whether it is a firm, LLP, society, cooperative or an entity under an Act of Parliament.
2Check whether it is barred. A company registered under the 1882 Act, the 1913 Act or the Companies Act, 1956 cannot register under section 366.
3Count the members. Two or more are needed. If fewer than seven, the company must be a private company.
4Decide the type of company sought: unlimited, limited by shares or limited by guarantee. Test the entity against the condition for that type, such as fixed share capital or the guarantee resolution.
5Check the general meeting assent: simple majority of those present, or three-fourths where an entity without limited liability becomes a limited company.
6State what section 367 requires: compliance with the Chapter, payment of fees under section 403, then the Registrar's certificate.
7Conclude clearly: the company is incorporated from the certificate, and say what the facts allow or do not allow. Add that section 18 would apply for a later change of class.

Quickest way: Four-gate check

When to use it: Use when the question is short and asks whether an entity can be registered or what the effect of the certificate is.

Gate 1: Is it an existing entity formed under another law and not already registered under the 1882, 1913 or 1956 Acts?
Gate 2: Does it have two or more members, with a private company if under seven?
Gate 3: Does it meet the condition for the chosen type and the required assent?
Gate 4: Are compliance and section 403 fees done? If yes, the Registrar certifies and the company is incorporated.

Common mistakes in Existing Companies and Registration under Section 367

Saying section 367 lists who can register.
Students merge sections 366 and 367 because they appear together.
Fix: Remember: 366 is eligibility and conditions, 367 is the certificate and the incorporation that follows.
Allowing a company registered under the Companies Act, 1956 to register under section 366.
Students forget that it is already a company.
Fix: Quote proviso (i). Such a company is outside the section, so do not route it through sections 366 and 367. Section 18(1) speaks of a company registered under this Act, so keep that distinction clear in your answer.
Writing that seven members are needed.
The old law required seven or more members, and older notes still show this.
Fix: Write two or more members, with fewer than seven registering only as a private company.
Mixing up section 367 with section 18.
Both end with a certificate of incorporation.
Fix: Section 18 is for a company already registered under this Act. Section 367 is for entities formed under other laws.
Applying the three-fourths majority to every case.
Students memorise the higher majority and ignore its condition.
Fix: The three-fourths rule applies where an entity without limited liability under any law is registering as a limited company. Otherwise a majority of members present is enough.
Omitting the fees and compliance conditions from the answer.
Students focus on the certificate only.
Fix: State both conditions: compliance with the Chapter and payment of fees under section 403, where payable.

Worked examples

Example 1

Sundaram Traders, a partnership firm of nine partners in Chennai, wants to register under the Companies Act, 2013 as a company limited by shares. Advise on the legal position, including the effect of the Registrar's certificate.

Show the solution

Provision: under section 366(1), a partnership firm is included in the word company for this Part, so it may apply for registration. Section 366(2) allows registration as an unlimited company, a company limited by shares or a company limited by guarantee.
Facts: the firm has nine members, which is above the minimum of two. To be limited by shares it must have a permanent paid-up or nominal share capital of fixed amount divided into shares of fixed amount, or held as stock. Under proviso (iii), its members must be the holders of those shares or stock and no other persons.
Assent: the firm is not limited by any law, so the higher majority in proviso (v) applies. Not less than three-fourths of the members present in person, or by proxy where allowed, at the general meeting summoned for the purpose must agree.
Section 367: once the Chapter is complied with and the section 403 fees are paid, the Registrar certifies under his hand that the firm is incorporated as a company under the Act and that it is limited.
Effect: on the certificate, the firm is incorporated as a limited company.

Answer: Sundaram Traders can register as a company limited by shares if it has fixed share capital divided into shares, its members are the holders of those shares and no other persons, and at least three-fourths of the members present at the meeting assent. After compliance and payment of fees, the Registrar's certificate under section 367 incorporates it as a limited company.

Example 2

Kaveri Software Pvt Ltd was registered under the Companies Act, 1956. Its directors say they will register it again under sections 366 and 367 as a company limited by guarantee. Is this possible?

Show the solution

Provision: proviso (i) to section 366(2) says that a company registered under the Indian Companies Act, 1882, the Indian Companies Act, 1913 or the Companies Act, 1956 shall not register in pursuance of this section.
Facts: Kaveri was registered under the 1956 Act, so it is already a company and falls within the bar.
Analysis: sections 366 and 367 apply to entities formed under other laws, not to companies already registered. Section 367 never becomes relevant because the Registrar cannot proceed on such an application.
Contrast with section 18: section 18(1) lets a company of any class registered under this Act convert itself into a company of another class by altering its memorandum and articles. That is a separate provision for companies registered under this Act. It does not turn the proposed re-registration of Kaveri under section 366 into a valid route.
Conclusion: the directors cannot use sections 366 and 367 for Kaveri. Do not suggest re-registration under this section.

Answer: The proposal is not possible under sections 366 and 367 because of proviso (i). Section 18 is a different provision: it applies to a company of any class registered under this Act, by altering its memorandum and articles, and it cannot be used to rescue a re-registration under section 366.

Exam tips

Write sections 366 and 367 together. Use 366 for eligibility and conditions and 367 for the Registrar's certificate and incorporation.
In a case question, check the bar for companies under the 1882, 1913 and 1956 Acts first. It is the quickest way to spot a trap.
Mention the member count: two or more, and private company if fewer than seven. State the majority required with its condition.
Contrast section 367 with section 18 in one line. Examiners like this distinction.
Do not quote the amount of fees or the form numbers unless you are sure. Say fees under section 403 and the prescribed manner.

Practice questions from Compliance Framework

Existing Companies and Registration under Section 367: frequently asked questions

What does section 367 of the Companies Act, 2013 say?

It says that when an existing entity has complied with the requirements of the Chapter and paid the fees under section 403, the Registrar certifies under his hand that it is incorporated as a company under the Act. For a limited company, the certificate also says it is limited. The company is then incorporated.

What is the difference between section 366 and section 367?

Section 366 deals with which entities may register and under what conditions, such as the number of members, share capital and assent. Section 367 deals with the final step, the Registrar's certificate and the incorporation that results.

Which entities can register under section 366?

The word company includes a partnership firm, LLP, cooperative society, society or any other business entity formed under another law that applies for registration. Companies already registered under the 1882 Act, the 1913 Act or the Companies Act, 1956 cannot use this route.

How many members are needed for registration under section 366?

Two or more members are needed. A company with fewer than seven members must register as a private company. This replaced the earlier requirement of seven or more members.