Chapter XXI - Companies Authorised to Register and Unregistered…

Orientation

What Chapter XXI actually does

Chapter XXI is a bridge between legal forms. Part I permits a partnership firm, LLP, society, cooperative society or another lawfully constituted business entity to enter the Companies Act framework without using an ordinary asset-sale route. Part II gives NCLT a collective winding-up jurisdiction over specified unregistered entities.

Part I: continuity

Eligibility, assent, public notice, URC-1, certificate, statutory vesting and preservation of liabilities.

Part II: collective closure

Tribunal winding up, debt-inability tests, foreign-body cases and special-law savings.

Not a magic reset

Licences, taxes, land records, employee matters, security interests and contractual notices still require specific execution.

Executive map

Chapter architecture

Part	Sections	Question answered	Primary authority
Part I	366-367	Who can register, in what form, and when incorporation occurs	Registrar of Companies
Part I	368-371	What happens to property, liabilities, litigation and constitutional documents	Statutory consequences
Part I	372-374	How winding-up stays and registration safeguards operate	NCLT + ROC
Part II	375	When and how an unregistered company can be wound up	NCLT
Part II	376-378	Foreign dissolved bodies, cumulative powers and special-law savings	NCLT / Official Liquidator

Contents

Professional navigation

Section 366 - Companies capable of being registered Section 367 - Certificate of registration of existing companies Section 368 - Vesting of property on registration Section 369 - Saving of existing liabilities Section 370 - Continuation of pending legal proceedings Section 371 - Effect of registration under this Part Section 372 - Power of Court to stay or restrain proceedings Section 373 - Suits stayed on winding up order Section 374 - Obligations of companies registering under this Part Section 375 - Winding up of unregistered companies Section 376 - Power to wind up foreign companies, although dissolved Section 377 - Provisions of Chapter cumulative Section 378 - Saving and construction of enactments conferring power to wind up entities in certain cases Eligibility decision tree Rules 1-5 and URC-1 Entity-wise filing matrix End-to-end lifecycle Accounting and tax overlay Part II operating guide Practical case studies Professional checklists Finin2min Q&A Source register

Concept foundation

Registration under Part I versus ordinary incorporation

Part I registration

An existing legal enterprise enters the Companies Act framework. Sections 368-370 preserve property, obligations and proceedings through statutory continuity.

Fresh incorporation + transfer

A new company is formed first and the business is then transferred by contract, conveyance, slump sale, succession or another mechanism. Separate transfer formalities are usually central.

Dimension	Part I registration	Fresh company + transfer
Identity / continuity	Statutory continuity subject to Chapter XXI	Distinct new company and transfer mechanics
Property	Passes and vests under Section 368	Transferred under agreements and applicable property law
Liabilities	Preserved under Section 369	Assumption depends on law, contract and creditor position
Litigation	Continues under Section 370	Substitution/novation issues may be more extensive
Prior entity	Dissolution steps under Section 374; LLP deemed dissolved	May continue or be separately dissolved
Tax neutrality	Separate conditions must be tested	Separate conditions must be tested

Eligibility

Who may use Part I?

Expressly included

Partnership firm
Limited liability partnership
Co-operative society
Society
Other business entity formed under another law

Core gateway

Duly constituted according to law
Two or more members
Permitted output form
Required assent
Prescribed filings and safeguards

Express exclusions / limits

Already registered under 1882, 1913 or 1956 Companies Acts
Existing statutory limited liability restricts available output form
Fewer than seven members must register as private company

Professional test: Do not start with the MCA form. Start with the constituting law, membership rights, capital architecture, liability regime and the legal ability to dissolve the prior form.

Three thresholds must not be mixed: Part I registration is available to a lawfully constituted eligible entity with two or more members. If it has fewer than seven members, the resulting company must be private. The separate Part II definition of an unregistered company generally refers to an association or entity with more than seven members when the winding-up petition is presented.

Eligibility mechanics

Output form and assent matrix

Existing position / proposed form	Minimum assent	Additional condition
Any eligible entity - general rule	Majority of members present in person or by proxy where allowed	Meeting summoned specifically for registration
Unlimited liability entity becoming limited	At least three-fourths of members present in person or proxy	Existing law must not already limit liability
Company limited by guarantee	Applicable assent plus guarantee resolution	Each member states maximum contribution on winding up
Company limited by shares	Applicable assent	Permanent fixed capital divided into fixed shares / stock; members are holders
Fewer than 7 members	Applicable assent	Must register as a private company

Example: A six-partner firm can use Part I, but the resulting company must be private. If the firm is moving from unlimited partner liability to a company limited by shares, the three-fourths meeting threshold applies.

Section 366 • Part I - Registration

366. Companies capable of being registered

OPERATIVE

Plain-language decode

Creates a statutory conversion route for lawfully constituted non-company entities. Eligibility is entity-specific, output-specific and voting-specific; registration is not merely a portal filing.

Professional control

Confirm member count, legal constitution, liability architecture, fixed capital (for shares), correct meeting notice, proxy rights, voting computation and the private-company requirement below seven members.

Illustration

A three-partner registered firm with fixed partner capital cannot simply assume it qualifies as a company limited by shares. The constituting documents, proposed share allocation and member-holder principle must align.

Bare Act - current text

366. Companies capable of being registered.—(1) For the purposes of this Part, the word “company” includes any partnership firm, limited liability partnership, cooperative society, society or any other business entity formed under any other law for the time being in force which applies for registration under this Part. (2) With the exceptions and subject to the provisions contained in this section, any company formed, whether before or after the commencement of this Act, in pursuance of any Act of Parliament other than this Act or of any other law for the time being in force or being otherwise duly constituted according to law, and consisting of two or more members, may at any time register under this Act as an unlimited company, or as a company limited by shares, or as a company limited by guarantee, in such manner as may be prescribed and the registration shall not be invalid by reason only that it has taken place with a view to the company’s being wound up: Provided that— (i) a company registered under the Indian Companies Act, 1882 (6 of 1882) or under the Indian Companies Act, 1913 (7 of 1913) or the Companies Act, 1956 (1 of 1956), shall not register in pursuance of this section; (ii) a company having the liability of its members limited by any Act of Parliament other than this Act or by any other law for the time being in force, shall not register in pursuance of this section as an unlimited company or as a company limited by guarantee; (iii) a company shall be registered in pursuance of this section as a company limited by shares only if it has a permanent paid-up or nominal share capital of fixed amount divided into shares, also of fixed amount, or held and transferable as stock, or divided and held partly in the one way and partly in the other, and formed on the principle of having for its members the holders of those shares or that stock, and no other persons; (iv) a company shall not register in pursuance of this section without the assent of a majority of such of its members as are present in person, or where proxies are allowed, by proxy, at a general meeting summoned for the purpose; (v) where a company not having the liability of its members limited by any Act of Parliament or any other law for the time being in force is about to register as a limited company, the majority required to assent as aforesaid shall consist of not less than three-fourths of the members present in person, or where proxies are allowed, by proxy, at the meeting; (vi) where a company is about to register as a company limited by guarantee, the assent to its being so registered shall be accompanied by a resolution declaring that each member undertakes to contribute to the assets of the company, in the event of its being wound up while he is a member, or within one year after he ceases to be a member, for payment of the debts and liabilities of the company or of such debts and liabilities as may have been contracted before he ceases to be a member, and of the costs, charges and expenses of winding up, and for the adjustment of the rights of the contributories among themselves, such amount as may be required, not exceeding a specified amount. (vii) a company with less than seven members shall register as a private company.] (3) In computing any majority required for the purposes of sub-section (1), when a poll is demanded, regard shall be had to the number of votes to which each member is entitled according to the regulations of the company.

Section 367 • Part I - Registration

367. Certificate of registration of existing companies

OPERATIVE

Plain-language decode

Once Chapter XXI requirements and fees are satisfied, the Registrar certifies incorporation. The certificate is the legal switch from the legacy form into a company under the 2013 Act.

Professional control

Do not treat SRN approval as completion. Verify certificate particulars, CIN, registered office, capital, first directors, Section 8 licence where relevant and consistency with URC-1 evidence.

Bare Act - current text

367. Certificate of registration of existing companies.—On compliance with the requirements of this Chapter with respect to registration, and on payment of such fees, if any, as are payable under section 403, the Registrar shall certify under his hand that the company applying for registration is incorporated as a company under this Act, and in the case of a limited company that it is limited and thereupon the company shall be so incorporated.

Section 368 • Part I - Registration

368. Vesting of property on registration

OPERATIVE

Plain-language decode

Property passes and vests by force of law, including movable, immovable and actionable claims. Operational perfection - records, licences, registrations and notices - still needs follow-through.

Professional control

Create an asset-migration register for title records, bank mandates, depositories, IP, leases, licences, motor vehicles, receivables and charges. Statutory vesting and practical record mutation are different workstreams.

Illustration

Land and receivables vest by statute, but the company should still update revenue records, lender records, customer instructions and litigation cause titles.

Bare Act - current text

368. Vesting of property on registration.—All property, movable and immovable (including actionable claims), belonging to or vested in a company at the date of its registration in pursuance of this Part, shall, on such registration, pass to and vest in the company as incorporated under this Act for all the estate and interest of the company therein.

Section 369 • Part I - Registration

369. Saving of existing liabilities

OPERATIVE

Plain-language decode

The new corporate form inherits historical rights and liabilities. Registration does not reset debts, guarantees, obligations or contracts.

Professional control

Build a liabilities continuity schedule covering borrowings, guarantees, deposits, litigation, taxes, employee dues, warranties, indemnities and contingent claims.

Illustration

A bank guarantee given before registration does not disappear. The company inherits the obligation, and the bank documentation may require notice or confirmation.

Bare Act - current text

369. Saving of existing liabilities.—The registration of a company in pursuance of this Part shall not affect its rights or liabilities in respect of any debt or obligation incurred, or any contract entered into, by, to, with, or on behalf of, the company before registration.

Section 370 • Part I - Registration

370. Continuation of pending legal proceedings

OPERATIVE

Plain-language decode

Pending proceedings continue without restarting. Personal execution against a member is restricted, while collective winding-up remedies remain available if company property is insufficient.

Professional control

File substitution/intimation applications where procedurally required; preserve limitation, pleadings, evidence and authority documents. Do not withdraw and refile unless legally necessary.

Illustration

A pending recovery suit by the legacy firm continues. The legal team should place the incorporation certificate and Section 370 position on record instead of abandoning the case.

Bare Act - current text

370. Continuation of pending legal proceedings.—All suits and other legal proceedings taken by or against the company, or any public officer or member thereof, which are pending at the time of the registration of a company in pursuance of this Part, may be continued in the same manner as if the registration had not taken place: Provided that execution shall not issue against the property or persons of any individual member of the company on any decree or order obtained in any such suit or proceeding; but, in the event of the property of the company being insufficient to satisfy the decree or order, an order may be obtained for winding up the company in accordance with the provisions of this Act or of the Insolvency and Bankruptcy Code, 2016 (31 of 2016).

Section 371 • Part I - Registration

371. Effect of registration under this Part

OPERATIVE

Plain-language decode

Legacy constituting instruments are mapped into memorandum-and-articles conditions, the Companies Act applies, and pre-registration contribution liabilities are preserved for winding up.

Professional control

Map every legacy clause to memorandum, articles or shareholder/contractual rights; identify clauses that become unalterable memorandum conditions and clauses capable of later amendment.

Bare Act - current text

371. Effect of registration under this Part.—(1) When a company is registered in pursuance of this Part, sub-sections (2) to (7) shall apply. (2) All provisions contained in any Act of Parliament or any other law for the time being in force, or other instrument constituting or regulating the company, including, in the case of a company registered as a company limited by guarantee, the resolution declaring the amount of the guarantee, shall be deemed to be conditions and regulations of the company, in the same manner and with the same incidents as if so much thereof as would, if the company had been formed under this Act, have been required to be inserted in the memorandum, were contained in a registered memorandum, and the residue thereof were contained in registered articles. (3) All the provisions of this Act shall apply to the company and the members, contributories and creditors thereof, in the same manner in all respects as if it had been formed under this Act, subject as follows:— (a) Table F in Schedule I shall not apply unless and except in so far as it is adopted by special resolution; (b) the provisions of this Act relating to the numbering of shares shall not apply to any company whose shares are not numbered; 2. Ins. by Act 31 of 2016, s. 255 and the Eleventh Schedule (w.e.f. 15-11-2016). (c) in the event of the company being wound up, every person shall be a contributory, in respect of the debts and liabilities of the company contracted before registration, who is liable to pay or contribute to the payment of any debt or liability of the company contracted before registration, or to pay or contribute to the payment of any sum for the adjustment of the rights of the members among themselves in respect of any such debt or liability, or to pay or contribute to the payment of the costs, charges and expenses of winding up the company, so far as relates to such debts or liabilities as aforesaid; (d) in the event of the company being wound up, every contributory shall be liable to contribute to the assets of the company, in the course of the winding up, all sums due from him in respect of any such liability as aforesaid; and in the event of the death or insolvency of any contributory, the provisions of this Act with respect to the legal representatives of deceased contributories, or with respect to the assignees of insolvent contributories, as the case may be, shall apply. (4) The provisions of this Act with respect to— (a) the registration of an unlimited company as a limited company; (b) the powers of an unlimited company on registration as a limited company, to increase the nominal amount of its share capital and to provide that a portion of its share capital shall not be capable of being called-up except in the event of winding up; (c) the power of a limited company to determine that a portion of its share capital shall not be capable of being called-up except in the event of winding up, shall apply, notwithstanding anything in any Act of Parliament or any other law for the time being in force, or other instrument constituting or regulating the company. (5) Nothing in this section shall authorise the company to alter any such provisions contained in any instrument constituting or regulating the company as would, if the company had originally been formed under this Act, have been required to be contained in the memorandum and are not authorised to be altered by this Act. (6) None of the provisions of this Act (apart from those of section 242) shall derogate from any power of altering its constitution or regulations which may be vested in the company, by virtue of any Act of Parliament or any other law for the time being in force, or other instrument constituting or regulating the company. (7) In this section, the expression “instrument” includes deed of settlement, deed of partnership, or limited liability partnership.

Section 372 • Part I - Registration

372. Power of Court to stay or restrain proceedings

OPERATIVE

Plain-language decode

The stay/restraint machinery can extend to proceedings against contributories where a creditor seeks protection after a winding-up petition.

Professional control

Coordinate Chapter XXI with Section 279, IBC moratorium concepts and forum-specific stay rules. The provision is not a blanket automatic moratorium.

Bare Act - current text

372. Power of Court to stay or restrain proceedings.—The provisions of this Act or of the Insolvency and Bankruptcy Code, 2016 (31 of 2016), as the case may be, with respect to staying and restraining suits and other legal proceedings against a company at any time after the presentation of a petition for winding up and before the making of a winding up order, shall, in the case of a company registered in pursuance of this Part, where the application to stay or restrain is by a creditor, extend to suits and other legal proceedings against any contributory of the company.

Section 373 • Part I - Registration

373. Suits stayed on winding up order

OPERATIVE

Plain-language decode

After winding-up order or provisional-liquidator appointment, proceedings against the company or contributories for company debt require Tribunal leave.

Professional control

Maintain a leave matrix for all proceedings and identify whether each claim is a company debt. Tribunal leave conditions may affect continuation, security and costs.

Bare Act - current text

373. Suits stayed on winding up order.—Where an order has been made for winding up, or a provisional liquidator has been appointed for, a company registered in pursuance of this Part, no suit or other legal proceeding shall be proceeded with or commenced against the company or any contributory of the company in respect of any debt of the company, except by leave of the Tribunal and except on such terms as the Tribunal may impose.

Section 374 • Part I - Registration

374. Obligations of companies registering under this Part

OPERATIVE

Plain-language decode

Registration requires secured-creditor clearance, dual-language public notice, dissolution undertakings and prescribed compliance. An LLP is deemed dissolved on Part I registration.

Professional control

Keep proof of NOCs, advertisements, service on prior registrar, objection responses and notarised undertakings. LLP applicants should separately verify that all LLP filings are current.

Illustration

An LLP applicant does not need a separate dissolution deed after incorporation, but must ensure all LLP filings and liabilities are correctly disclosed before URC-1.

Bare Act - current text

374. Obligations of companies registering under this Part.—Every company which is seeking registration under this Part shall,— (a) ensure that secured creditors of the company, prior to its registration under this Part, have either consented to or have given their no objection to company's registration under this Part; (b) publish in a newspaper, advertisement one in English and one in vernacular language in such form as may be prescribed giving notice about registration under this Part, seeking objections and address them suitably; 1. The proviso ins. by Act 31 of 2016, s. 255 and the Eleventh Schedule (w.e.f. 15-11-2016). (c) file an affidavit, duly not arised, from all the members or partners to provide that in the event of registration under this Part, necessary documents or papers shall be submitted to the registering or other authority with which the company was earlier registered, for its dissolution as partnership firm, limited liability partnership, cooperative society, society or any other business entity, as the case may be. (d) comply with such other conditions as may be prescribed. 1 [Provided that upon registration as a company under this Part a limited liability partnership incorporated under the Limited Liability Partnership Act, 2008 (6 of 2009) shall be deemed to have been dissolved under that Act without any further act or deed.] PART II.—Winding up of unregistered companies

Section 375 • Part II - Unregistered companies

375. Winding up of unregistered companies

OPERATIVE

Plain-language decode

Part II permits only Tribunal winding up of an unregistered company. It specifies three grounds, four debt-inability tests, and the entities included or excluded from the definition.

Professional control

Validate entity definition, member count at petition date, debt quantum, service, three-week/ten-day clocks and the correct ground. This is not a substitute for ordinary debt recovery.

Illustration

An association of 12 persons owes ₹3 lakh. A valid demand is served at its principal place and remains unpaid and unsecured for three weeks. This is one statutory inability route, not automatic liquidation.

Bare Act - current text

375. Winding up of unregistered companies.—(1) Subject to the provisions of this Part, any unregistered company may be wound up under this Act, in such manner as may be prescribed, and all the provisions of this Act, with respect to winding up shall apply to an unregistered company, with the exceptions and additions mentioned in sub-sections (2) to (4). (2) No unregistered company shall be wound up under this Act voluntarily. (3) An unregistered company may be wound up under the following circumstances, namely:— (a) if the company is dissolved, or has ceased to carry on business, or is carrying on business only for the purpose of winding up its affairs; (b) if the company is unable to pay its debts; (c) if the Tribunal is of opinion that it is just and equitable that the company should be wound up. (4) An unregistered company shall, for the purposes of this Act, be deemed to be unable to pay its debts— (a) if a creditor, by assignment or otherwise, to whom the company is indebted in a sum exceeding one lakh rupees then due, has served on the company, by leaving at its principal place of business, or by delivering to the secretary, or some director, manager or principal officer of the company, or by otherwise serving in such manner as the Tribunal may approve or direct, a demand under his hand requiring the company to pay the sum so due, and the company has, for three weeks after the service of the demand, neglected to pay the sum or to secure or compound for it to the satisfaction of the creditor; (b) if any suit or other legal proceeding has been instituted against any member for any debt or demand due, or claimed to be due, from the company, or from him in his character as a member, and notice in writing of the institution of the suit or other legal proceeding having been served on the company by leaving the same at its principal place of business or by delivering it to the secretary, or some director, manager or principal officer of the company or by otherwise serving the same in such manner as the Tribunal may approve or direct, the company has not, within ten days after service of the notice,— (i) paid, secured or compounded for the debt or demand; (ii) procured the suit or other legal proceeding to be stayed; or (iii) indemnified the defendant to his satisfaction against the suit or other legal proceeding, and against all costs, damages and expenses to be incurred by him by reason of the same; (c) if execution or other process issued on a decree or order of any Court or Tribunal in favour of a creditor against the company, or any member thereof as such, or any person authorised to be sued as nominal defendant on behalf of the company, is returned unsatisfied in whole or in part; (d) if it is otherwise proved to the satisfaction of the Tribunal that the company is unable to pay its debts. Explanation.—For the purposes of this Part, the expression “unregistered company”— 1. The proviso ins. by Act 1 of 2018, s. 76 (w.e.f. 15-8-2018). (a) shall not include— (i) a railway company incorporated under any Act of Parliament or other Indian law or any Act of Parliament of the United Kingdom; (ii) a company registered under this Act; or (iii) a company registered under any previous companies law and not being a company the registered office whereof was in Burma, Aden, Pakistan immediately before the separation of that country from India; and (b) save as aforesaid, shall include any partnership firm, limited liability partnership or society or co-operative society, association or company consisting of more than seven members at the time when the petition for winding up the partnership firm, limited liability partnership or society or co-operative society, association or company, as the case may be, is presented before the Tribunal.

Section 376 • Part II - Unregistered companies

376. Power to wind up foreign companies, although dissolved

OPERATIVE

Plain-language decode

A foreign body corporate that carried on business in India can be wound up here even if it has already been dissolved abroad.

Professional control

Prove prior Indian business activity and preserve evidence despite foreign dissolution. Coordinate recognition, assets, creditors and cross-border enforcement.

Bare Act - current text

376. Power to wind up foreign companies, although dissolved.— Where a body corporate incorporated outside India which has been carrying on business in India, ceases to carry on business in India, it may be wound up as an unregistered company under this Part, notwithstanding that the body corporate has been dissolved or otherwise ceased to exist as such under or by virtue of the laws of the country under which it was incorporated.

Section 377 • Part II - Unregistered companies

377. Provisions of Chapter cumulative

OPERATIVE

Plain-language decode

Part II supplements the general winding-up framework. NCLT and the Official Liquidator receive the same machinery, but the entity is deemed a company only for winding-up purposes.

Professional control

Use the Companies Act winding-up machinery mutatis mutandis and identify any entity-specific inconsistency. Do not assume the entity becomes a company for tax, licensing or general governance.

Bare Act - current text

377. Provisions of Chapter cumulative.—(1) The provisions of this Part, with respect to unregistered companies shall be in addition to and not in derogation of, any provisions hereinbefore in this Act contained with respect to the winding up of companies by the Tribunal. (2) The Tribunal or Official Liquidator may exercise any powers or do any act in the case of unregistered companies which might be exercised or done by the Tribunal or Official Liquidator in winding up of companies formed and registered under this Act: Provided that an unregistered company shall not, except in the event of its being wound up, be deemed to be a company under this Act, and then only to the extent provided by this Part.

Section 378 • Part II - Unregistered companies

378. Saving and construction of enactments conferring power to wind up entities in certain cases

OPERATIVE

Plain-language decode

Special enactments that independently provide for winding up remain effective, with old Companies Act references read as corresponding 2013 Act provisions.

Professional control

Check the entity’s own governing statute first. Chapter XXI preserves, rather than displaces, valid special-law winding-up provisions.

Bare Act - current text

378. Saving and construction of enactments conferring power to wind up partnership firm, association or company, etc., in certain cases.—Nothing in this Part, shall affect the operation of any enactment which provides for any partnership firm, limited liability partnership or society or co-operative society, association or company being wound up, or being wound up as a company or as an unregistered company, under the Companies Act, 1956 (1 of 1956), or any Act repealed by that Act: Provided that references in any such enactment to any provision contained in the Companies Act, 1956 (1 of 1956) or in any Act repealed by that Act shall be read as references to the corresponding provision, if any, contained in this Act.

Rules and forms

Companies (Authorised to Register) Rules, 2014 - current operating map

The Rules apply the incorporation framework with modifications and prescribe the evidence needed for URC-1. The base rules have been amended in 2016, twice in 2018 and in January 2023.

Rule	Current operating function	Key controls
Rule 1	Title and commencement	Rules effective from 1 April 2014
Rule 2	Definitions	Covers fees, forms, Registrar, firm, society and trust concepts
Rule 3	Registration mechanics and URC-1 attachments	Entity-specific evidence, directors, instruments, creditor/charge-holder NOC, accounts and tax-return evidence
Rule 4	Advertisement, prior-registry notice and objections	URC-2 in English and vernacular; 21 clear days for public objections; ROC considers timely objections
Rule 5	Post-registration and additional safeguards	15-day prior-registry intimation, account freshness, revaluation restriction, regulator notice and entity-specific restrictions

Rule 3

URC-1 attachment architecture

Applicant / proposed output	Core attachment set	Special points
LLP or firm → limited by shares	Recent partner/member list; proposed first directors; constituting instruments; firm registration certificate if any; NOC; latest ITR; financial statements	List should be recent; all partnership deeds including revisions; fixed capital/share logic must reconcile
LLP or firm → guarantee / unlimited	Membership proof; directors; constituting instrument; guarantee resolution if relevant; NOC; latest ITR; statements	Do not confuse guarantee company with Section 8 company
Society → Section 8 guarantee company	Member list; directors; governing-body list; registration certificate; NOC; latest ITR; Section 8 materials	Registrar may issue Section 8 licence in INC-16; defaulting society may be ineligible
Trust → Section 8 guarantee company	Trustee list; directors; registration certificate and trust deed; NOC; objects and Section 8 compliance declaration	Pending CPC Section 92 proceedings can block application; tax-authority notice may apply
All non-LLP applicants	Undertaking to file prior-registry dissolution papers	LLP deemed dissolution under Section 374 proviso

2023 control: The amended rule language requires NOC from the secured creditor along with the charge holder, if applicable. The statutory Section 366 assent remains mandatory even though certain duplicate attachment requirements were removed from the Rules.

Rule 4

Publication, service and objection handling

URC-2

Publish in one English and one vernacular newspaper circulating in the district where the entity is situated.

21 clear days

The advertisement seeks objections within the prescribed clear-day period.

Prior registrar

Serve the entity’s existing registration authority and attach proof to URC-1.

ROC review

ROC considers objections received within the rule window and whether the applicant has suitably addressed them.

Evidence pack: Complete newspaper pages, publication invoices, e-paper screenshots, affidavits of publication, service proof, objection register, response letters and board/partner approvals.

Rule 5

Additional conditions and post-certificate obligations

Control	Requirement / practical consequence
Prior-registry intimation	Firm, society or trust gives intimation and dissolution papers within 15 days after Section 367 certificate
Fresh accounts	Statement of accounts should meet the prescribed freshness requirement and be certified; prior-year audited statements attach where applicable
Revaluation reserve	Recent revaluation surplus cannot be diverted into partner capital/current accounts merely to inflate conversion economics
Regulator notice	Serve the relevant regulator; the rules provide an objection window and a no-objection consequence for silence
LLP compliance	Attach declaration that LLP filings are current
Pending proceedings	Disclose pending proceedings rather than treating registration as a way to hide or extinguish them
Society / trust lock-in	Restrictions apply to changing the resulting Section 8 company’s kind for the prescribed period
Tax authority	Where the rule text invokes the former Income-tax Act framework, apply the 2025 Act transition and savings regime from 1 April 2026 rather than silently deleting the compliance step

Entity matrix

Which entities fit which path?

Legacy entity	Common destination	Critical diligence	Typical blocker
Partnership firm	Private/public company limited by shares	Partner rights, deeds, capital/current accounts, secured debt, tax conditions	Disputed partner admission/retirement or unreconciled capital
LLP	Private/public company	All LLP filings, partner list, contribution, charges, pending proceedings	Overdue filings or security documentation
Society	Section 8 company limited by guarantee	Objects, member/governing-body lists, returns, registrations, donor/grant conditions	Statutory-return default or objects inconsistent with Section 8
Trust	Section 8 company limited by guarantee	Trust deed, trustees, beneficiaries/objects, Section 92 CPC risk, tax status	Pending Section 92 proceeding or irrevocable restrictions
Co-operative society / other entity	Fact-specific	Enabling law, member rights, regulator consent, dissolution mechanism	Governing law prohibits or conditions conversion

Lifecycle

End-to-end registration lifecycle

Stage	Principal work	Failure risk
1. Structuring	Choose destination form, capital, members, first directors, objects and governance	Ineligible structure or wrong assent threshold
2. Due diligence	Constitution, ownership, assets, liabilities, litigation, tax, employees, licences, security	Hidden liability or non-transferable right
3. Assent	Proper meeting, notice, quorum, proxies, poll and guarantee resolution	Invalid member approval
4. Creditor/regulator	NOCs and notices; identify charge holder separately	Objection or lender default
5. Public notice	URC-2 in two newspapers and objection management	Defective publication or unaddressed objection
6. Filing	URC-1 plus incorporation / Section 8 material and fee	Resubmission, rejection or inconsistent data
7. Certificate	INC-11 and Section 367 incorporation	Incorrect certificate particulars
8. Migration	Assets, contracts, litigation, employees, registrations and charges	Operational discontinuity despite legal vesting
9. Prior dissolution	File papers with old registrar; LLP deemed dissolved	Dual records or compliance leakage
10. Stabilisation	First Board, bank/KYC, statutory registers, tax and accounting cut-over	Post-conversion defaults

Vesting

What passes under Section 368 - and what still needs action

Statutory vesting

Land and buildings
Plant, equipment and inventory
Receivables and actionable claims
Investments and bank balances
Intellectual-property interests
Contractual property rights, subject to law and terms

Operational perfection

Revenue and municipal mutation
Bank and depository KYC
IP registry recordal
RTO and permit updates
Contract and customer notices
Charge and security record updates
Sectoral licence endorsements

Do not overstate Section 368: vesting does not convert a non-transferable licence into a transferable one, cure defective title, waive stamp/registration requirements under every State law, or override a valid regulatory consent condition.

Liability continuity

Debts, guarantees, contracts and employees

Section 369 is deliberately broad. The corporate wrapper changes; the historical economic burdens do not vanish.

Area	Continuity question	Control evidence
Borrowings	Does the facility permit conversion / change in legal form?	Lender NOC, amendment, security confirmation
Guarantees	Do guarantees continue and does the guarantor require notice?	Guarantee review and acknowledgement
Contracts	Is consent, notice or anti-assignment analysis required?	Contract matrix and communications
Employees	Continuity of service, gratuity, PF/ESI, leave, ESOP and policies	Transfer communication and benefit reconciliation
Taxes	Past demands, refunds, losses, registrations and assessments	Tax transition memo and authority filings
Litigation	Correct party name, authorisation and evidence continuity	Substitution/intimation application and certificate

Constitution

Section 371: legacy instruments become corporate conditions

Memorandum layer

Clauses that would have been required in a memorandum are treated as memorandum conditions and cannot be altered beyond statutory authority.

Articles layer

The residue operates as articles. Table F does not automatically apply unless adopted by special resolution.

Legacy powers

Section 242 does not derogate from valid constitutional alteration powers preserved by subsection (6).

Drafting task: prepare a clause-by-clause crosswalk from the deed, LLP agreement, bye-laws or trust instrument to the proposed memorandum, articles, shareholder arrangements and reserved matters.

Accounting and tax

Cut-over, balances and tax neutrality

Company-law vesting is only the first layer. Accounting recognition, tax neutrality and future claw-back conditions require an independent memorandum.

Workstream	Questions
Cut-off date	When do books close in the old form and open in the company?
Capital mapping	How do partner contribution, current accounts, reserves and accumulated results map into shares, securities premium, debt or other balances?
Asset values	Are book values carried forward or remeasured under the applicable accounting framework?
Deferred tax	What temporary differences or tax-base changes arise?
Losses / incentives	Do conditions permit carry-forward or continuation?
Capital gains	Does the transaction meet every tax-neutrality condition?
Claw-back	Could later share transfers, benefit changes or consideration breach continuing conditions?

2026 tax transition: The Income-tax Act, 2025 applies from 1 April 2026. Transactions and proceedings must be mapped to the new Act and its savings provisions; old Section 47 labels should not be copied into a current memo without a correspondence check.

Part II

Operating guide to winding up of unregistered companies

Question	Section 375 answer
Can it wind up voluntarily under Chapter XXI?	No
Grounds	Dissolved/ceased/only winding affairs; unable to pay debts; just and equitable
Demand route	Debt exceeding ₹1 lakh; valid service; three weeks of neglect to pay, secure or compound
Member-suit route	Notice to entity; ten days to pay, secure, obtain stay or indemnify member
Execution route	Execution or process returned unsatisfied wholly or partly
General proof	Inability otherwise proved to NCLT
Included entities	Subject to exclusions: partnership firm, LLP, society, cooperative, association/company with more than seven members at petition date
Effect	General winding-up machinery applies with Part II exceptions and additions

Section 375 debt-demand route: the amount due must exceed Rs. 1 lakh, demand must be served at the principal place of business, and the entity must neglect payment, security or satisfactory arrangement for three weeks. This is one inability route, not automatic liquidation.

Debt route

Why Section 375 is not ordinary debt collection

Threshold is only one element

Debt must be due, exceed the statutory amount, and the demand must be properly served.

Response alternatives matter

Payment is not the only response. Security or a genuine composition can defeat the statutory inference.

Dispute and purpose matter

Winding up is a collective remedy. It should not be used to pressure payment of a genuinely disputed claim.

Petition file: constituting documents, member count, debt proof, demand, service evidence, response, financial material, asset information, creditor context, governing special statute and forum analysis.

Foreign body

Section 376 cross-border winding up

Section 376 allows an overseas body that carried on business in India to be wound up as an unregistered company even after foreign-law dissolution. The petitioner should map Indian assets, creditors, establishments, contracts, representatives and prior foreign proceedings.

Issue	Professional response
Foreign dissolution	Obtain certified and, where needed, apostilled/legalised evidence
Indian business	Prove actual carrying on of business, not a merely theoretical connection
Assets	Identify bank accounts, receivables, inventory, property and claims in India
Parallel estate	Coordinate with foreign liquidator and recognition principles
Creditors	Avoid double proof or inconsistent distributions
Records	Preserve Indian books, tax filings, employee and regulatory records

IBC and special law

Do not assume displacement

Chapter XXI continues

Sections 375-378 remain operative and expressly preserve the general winding-up machinery and special enactments.

IBC analysis is entity-specific

Availability and priority of IBC processes depend on entity type, debt, statutory commencement and the relief sought. A route memo should be prepared rather than assuming universal displacement.

Forum control: A petition under Section 375, an IBC application, a partnership dissolution action and a special-statute process are not interchangeable. Jurisdiction and remedy must be established at the outset.

Practical application

Case studies

1. Six-member firm

A six-partner firm proposes to register as a public company.

Answer: Not permitted under Section 366(vii); with fewer than seven members it must register as a private company.

2. Simple majority used for liability conversion

An unlimited firm obtains 55% approval to become limited by shares.

Answer: Insufficient. The special three-fourths threshold applies to an entity whose member liability was not already limited and which is becoming limited.

3. Fixed capital missing

An association wants a company limited by shares but its members have no fixed share/stock interests.

Answer: Restructure the capital architecture first or select a legally suitable output form; Section 366(2)(iii) is substantive.

4. Secured lender consents but charge holder differs

The facility lender has assigned the charge to a trustee; only the lender signs.

Answer: The amended rules require NOC from the secured creditor along with the charge holder, if applicable. Resolve both roles.

5. Pending suit

A firm has a ₹2 crore recovery action pending when INC-11 is issued.

Answer: The action continues under Section 370. File the certificate and authority material; do not treat the cause of action as extinguished.

6. Land title

A firm owns factory land. Management assumes no record update is needed because Section 368 vests it.

Answer: Legal vesting may occur, but revenue, municipal, lender and registration/stamp analysis should be completed to perfect and evidence title.

7. Old guarantee

A director guaranteed pre-registration debt.

Answer: Section 369 preserves the debt and obligation. Review guarantee terms and obtain any required confirmations; registration is not a release.

8. LLP dissolution

An LLP plans a separate dissolution deed immediately after registration.

Answer: Section 374 proviso deems the LLP dissolved on Part I registration. Focus on final filings, records and authority updates rather than an inconsistent duplicate process.

9. Society with filing defaults

A society seeks Section 8 registration while statutory returns remain overdue.

Answer: Rule-based eligibility and filing compliance must be cured; do not file on the assumption that company registration will wash away society-law defaults.

10. Unregistered association debt

A 12-member association ignores a ₹2 lakh demand for three weeks.

Answer: One Section 375 inability test may be met, subject to due debt, service, dispute and the collective-remedy analysis.

11. Seven-member boundary

An association has exactly seven members at petition date.

Answer: The inclusive definition in Section 375 refers to more than seven members for the specified residual category; other entity labels and governing law must be analysed.

12. Foreign dissolved company

A foreign body dissolved at home still has receivables and creditors in India.

Answer: Section 376 can support Indian unregistered-company winding up if it carried on business in India.

Controls

Common failure points

Eligibility mistakes

Treating every association as eligible
Ignoring existing statutory limited liability
Wrong private/public destination
No fixed share capital for share company

Evidence failures

Outdated member list
Missing historical deeds
Unreconciled accounts
Incomplete creditor/charge-holder NOC
Weak publication proof

Post-certificate gaps

No prior-registry dissolution filing
Bank and licence records not migrated
Pending cases not updated
Employee balances unreconciled
Tax neutrality assumed

Professional checklists

Pre-filing, filing and post-registration controls

Pre-filing

Confirm the enabling law and constitutional power to register
Freeze member/partner/trustee list and resolve disputes
Select private/public/Section 8 and liability form
Prepare capital and consideration bridge
Complete asset, liability, litigation, employee, licence and tax due diligence
Obtain correct assent, secured-creditor and charge-holder NOCs
Prepare current accounts and all historical constituting instruments
Plan URC-2 and prior-registry notice

Filing

Cross-check URC-1 against incorporation forms
Verify names, addresses, DINs, interests and consents of first directors
Attach entity-specific evidence and regulator proof
Maintain objection and response log
Track resubmission points and document versions

Post-certificate

Verify INC-11 and master data
Hold first Board meeting and establish statutory registers
Update banks, charges, IP, licences, contracts and litigation
Migrate payroll, PF/ESI, gratuity, GST, PAN/TAN and tax records
File prior-registry dissolution papers within applicable timeline
Reconcile opening balance sheet and audit trail

Timeline

High-use deadlines and clocks

Event	Timeline / test	Source
Members required	Two or more	Section 366(2)
Private company requirement	Fewer than seven members	Section 366 proviso
URC-2 objections	21 clear days from publication	Rule 4
ROC objection consideration	Objections within rule window; current rules refer to publication-based period	Rule 4
Prior-registry intimation after certificate	15 days for specified entities	Rule 5
Debt-demand neglect	Three weeks	Section 375(4)(a)
Member-suit response	Ten days	Section 375(4)(b)
Debt amount	Exceeding ₹1 lakh	Section 375(4)(a)

Forms

Core forms and records

Form / record	Purpose	Control
URC-1	Application by existing entity for registration	Entity-specific attachments and consistent incorporation data
URC-2	Newspaper advertisement	Correct district, English + vernacular, objection address and clear-day computation
INC-11	Certificate of incorporation	Legal switch under Section 367
INC-12 / Section 8 materials	Licence workflow where applicable	Objects, income application and restrictions
INC-16	Section 8 licence in relevant rule route	Verify conditions and certificate
Assent resolution	Section 366 approval	Threshold, proxies and poll calculation
Guarantee resolution	Maximum member contribution	Required for guarantee form
NOC pack	Secured creditor + charge holder	Match MCA charge and facility data
Dissolution undertaking	Prior-registry close-out	Not required in same way for LLP due to deemed dissolution proviso

Finin2min Q&A

Twenty rapid answers

Q1. Is Part I the same as incorporating a new company?

No. It registers an existing lawful entity and applies statutory continuity rules.

Q2. Can a two-member firm register?

Yes, subject to all conditions; fewer than seven members means the resulting company must be private.

Q3. Can every firm become a company limited by shares?

Only if the fixed-capital and holder-membership condition is satisfied.

Q4. Is unanimous approval required?

Not generally. Section 366 prescribes majority rules, including a three-fourths test for specified liability conversion.

Q5. Does INC-11 transfer land automatically?

Section 368 provides statutory vesting, but title evidence, stamp/registration, revenue and lender updates must still be analysed.

Q6. Are old debts cancelled?

No. Section 369 preserves rights and liabilities.

Q7. Must pending suits be refiled?

No. Section 370 permits continuation, though procedural intimation/substitution may be appropriate.

Q8. Does Table F automatically apply?

No. Under Section 371 it applies only to the extent adopted by special resolution.

Q9. Can legacy constitutional clauses be freely changed?

No. Clauses treated as memorandum conditions remain subject to statutory alteration limits.

Q10. What happens to an LLP after registration?

It is deemed dissolved under the LLP Act without further act or deed.

Q11. Is a lender NOC enough when a security trustee holds the charge?

Not necessarily. Current rule language also addresses the charge holder, if applicable.

Q12. Can a society become an ordinary commercial company?

The prescribed society route is structured around a Section 8 guarantee company; governing-law and rule conditions must be checked.

Q13. Does company-law registration guarantee tax neutrality?

No. Every tax condition and continuing claw-back rule must be independently tested.

Q14. Can an unregistered company wind up voluntarily under Section 375?

No.

Q15. Is a three-week unpaid demand automatically enough?

It creates a statutory inability route only when all conditions are met; genuine disputes and collective-remedy principles still matter.

Q16. Does Section 375 apply to a registered company?

No; the definition expressly excludes companies registered under the Act and specified previous company laws.

Q17. Can a dissolved foreign company be wound up in India?

Yes, under Section 376 if it carried on business in India.

Q18. Does Part II override special statutes?

No. Section 378 preserves applicable special-law winding-up enactments.

Q19. Does the unregistered entity become a company for all purposes during winding up?

No. Section 377 deems it a company only to the extent provided by Part II.

Q20. What is the biggest implementation risk?

Assuming legal vesting completes operational migration. A detailed post-certificate register is essential.

Final revision

One-page memory framework

Part I - REGISTER

366 eligibility + assent
367 INC-11 incorporation
368 property vests
369 liabilities survive
370 cases continue
371 Act + constitution
372-373 stay / leave
374 NOC + notice + dissolution

Part II - WIND UP

375 grounds + debt tests
376 dissolved foreign body
377 cumulative machinery
378 special-law savings

Sources and legal-update register

Primary materials used

Companies Act, 2013: India Code consolidated Act, Chapter XXI, Sections 366-378.

Rules: Companies (Authorised to Register) Rules, 2014; Amendment Rules, 2016; Amendment Rules, 2018; Second Amendment Rules, 2018; Amendment Rules, 2023 (G.S.R. 39(E), 19 January 2023).

Tax transition: Income-tax Act, 2025 as amended by Finance Act, 2026, effective 1 April 2026; CBDT transition materials.

Update control: Section text, rules, MCA filing utilities, fees, portal requirements, tax correspondence and State stamp/registration law should be rechecked on the actual transaction date.

Educational and professional-reference use: This chapter is not a substitute for a transaction-specific legal, tax, accounting, stamp-duty, sectoral or litigation opinion.