CA Intermediate · Corporate and Other Laws · Incorporation of Company and Matters Incidental Thereto

Himalaya Traders Ltd, a public company, was incorporated by registering a Memorandum that was later found to contain a material misrepresentation made by one subscriber, Gaurav, about his identity documents. Three years after incorporation, a creditor, Nisha, argues that the company's incorporation is invalid and that she may ignore its separate existence. Which statement correctly reflects the legal position under the Companies Act, 2013?

The certificate of incorporation is conclusive evidence that all registration requirements were complied with, so the company's existence cannot be disregarded by a creditor. Fraud in incorporation is dealt with by the Tribunal and by fixing liability on the persons responsible, not by treating the company as non-existent.

1. AThe certificate of incorporation is conclusive evidence that all requirements of registration have been complied with, so the company's existence cannot be challenged on this ground, although the Tribunal may act on fraudulent incorporation under the ActCorrect
2. BNisha may disregard the company because any misrepresentation voids incorporation automatically
3. CThe certificate is only prima facie evidence and can be rebutted by any creditor
4. DThe company is treated as a partnership of the subscribers