Section 017

Effect of memorandum and articles.—(1) The memorandum and articles shall, when registered, bind the company and the members thereof to the same extent as if they respectively had been signed by each member and contained a covenant on the part of each member, his heirs and legal representatives, to observe and be bound by all the provisions of the memorandum and of the articles, subject to the provisions of this Act.

[1][(2) All moneys payable by a subscriber in pursuance of his undertaking in the memorandum of association against the shares subscribed shall be a debt due from him and be payable in such time, manner and condition as may be notified by the Commission:]

(3)   [2][Omitted;] FORM-01

(4) Any violation of this section [3][direction given by the registrar] shall be an offence liable to a penalty of level 1 on the standard scale.

[1] Substituted through Companies Amendment Act, 2021 dated 03-12-2021. Before substitution it was:

(2) All moneys payable by a subscriber in pursuance of his undertaking in the memorandum of association against the shares subscribed shall be a debt due from him and be payable in cash within thirty days from the date of incorporation of the company:

Provided that in case the share money is not deposited within the prescribed time, the shares shall be deemed to be cancelled and the name of that subscriber shall be removed from the register and the registrar shall give such direction to the company in each case as deemed appropriate for compliance with the provisions of the company law.

[2] Omitted through Companies Amendment Act, 2021 dated 03-12-2021. Before omitted it was:

(3) The receipt of subscription money from the subscribers shall be reported by the company to the registrar on a specified form within forty-five days from the date of incorporation of the company, accompanied by a certificate by a practicing-chartered accountant or a cost and management accountant verifying receipt of the money so subscribed.

[3] Inserted through Companies Amendment Act, 2021 dated 03-12-2021

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