Section 9 - Effect of Registration / Section 10 - Effect of Memorandum and Articles
# Sections 9 & 10 - Effects of Registration and Constitutive Documents
## Section 9 - Effect of Registration
From the date of incorporation mentioned in the Certificate of Incorporation (CoI), the subscribers to the MoA and all subsequent members become a body corporate with the following characteristics:
### Key Attributes of the Body Corporate:
1. Name: Becomes a body corporate by the name contained in the memorandum
2. Functions: Capable of exercising all functions of an incorporated company under the Act
3. Perpetual succession: Continues to exist regardless of changes in membership
4. Property rights: Power to acquire, hold and dispose of property:
Movable and immovable
Tangible and intangible
5. Contractual capacity: Power to contract
6. Litigation capacity: Can sue and be sued in its own name
## Section 10 - Effect of Memorandum and Articles
### (1) Binding Nature of MoA & AoA
When registered, the MoA and AoA bind:
The company to the members, and
The members to the company
The binding effect is as if each member had personally signed and entered into covenants to observe all provisions of MoA/AoA.
### (2) Member's Monies are Debt Due
All monies payable by any member to the company under MoA/AoA shall be treated as a debt due from him to the company.
Practical implication: The company can recover calls in arrears from members as if it were a loan recovery - using debt recovery procedures.
### Critical Concept Note:
Who is liable to whom?
From
To
Liable?
Company
Members
✓ Yes
Members
Company
✓ Yes
Members
Each other
✗ NO
Members are NOT liable to each other under MoA/AoA. The contract is only between the company and members, not among members inter-se.
Worked example
### Example 1
Example - Perpetual Succession: ABC Ltd. was incorporated on 1st April 2026. Mr. X (a subscriber) dies on 5th April 2026. The company continues to exist because perpetual succession ensures the company's existence is independent of any individual member. The shares of Mr. X pass to his legal heirs without affecting the company's status.
### Example 2
Example - Calls in Arrears as Debt: XYZ Ltd. made a call of Rs. 5 per share on Mr. A who holds 1,000 shares. Mr. A defaults. The company can recover Rs. 5,000 from Mr. A treating it as a debt due, similar to loan recovery procedures - filing a suit, obtaining decree, executing it through attachment of assets.
### Example 3
Example - Members Not Liable Inter-se: In PQR Ltd., Mr. P (member) and Mr. Q (member) had a dispute about voting rights at the AGM. Mr. P cannot sue Mr. Q based on MoA/AoA provisions because Section 10 only creates binding obligations between company and members, NOT between members themselves.
⚠️ Common exam mistakes
Confusing the binding nature of MoA/AoA - members are bound to company and company to members, but NOT members to each other.
Forgetting that calls in arrears are recoverable as a debt - they cannot be written off easily.
Thinking the company's powers under Section 9 are limited - it has all powers of a natural person regarding property, contracts, and litigation.
Believing the company comes into existence on subscription to MoA - it actually comes into existence from the date mentioned in the CoI.
Bare-Act text Sections 9 and 10 · Companies Act, 2013 · click to expand
Section 9: From the date of incorporation mentioned in the certificate of incorporation, such subscribers to the memorandum and all other persons, as may, from time to time, become members of the company, shall be a body corporate by the name contained in the memorandum, capable of exercising all the functions of an incorporated company under this Act and having perpetual succession with power to acquire, hold and dispose of property, both movable and immovable, tangible and intangible, to contract and to sue and be sued, by the said name. Section 10: Subject to the provisions of this Act, 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 the company and by each member.