Advocates can file documents for Incorporation for a company/LLP – High Court

Provision Involved:

Section 7(1)(b) of Companies Act, 2013 read with rule 14 of the Companies (Incorporation) Rules, 2014 states that a declaration in Form No. INC-8 by an advocate, a chartered accountant, cost accountant or company secretary in practice, who is engaged in the formation of the company, and by a person named in the articles as a director, manager or secretary of the company, that all the requirements of this Act and the rules made thereunder in respect of registration and matters precedent or incidental thereto have been complied with.

Facts of the Case:

• A petition was filed before the Delhi High Court challenging the non-providing of a field for Advocates to register companies and LLPs on the current Ministry of Corporate Affairs (‘MCA’) portal.
• The petitioner case was that the MCA portal permitted Chartered Accountants, Company Secretaries and Cost & Work Accountants to register as practicing professionals and undertake incorporation of companies and LLPs for their clients.
• An amendment took place in the Companies Act, 2013 in 2014 by which even advocates were permitted to file documents for incorporation of companies. For the said purpose, an advocate would have to first register himself/herself as a practicing professional.
• However, the said amendment was not implemented in the tool Kit used by MCA
• As a result, advocates could not register Companies/LLPs on behalf of their clients.
• Hence, the petitioner prays that consequential amendment be carried out in the MCA tool kit permitting advocates who are enrolled with the Bar Council to register as professionals in the MCA portal.

Decision:

Delhi High Court held that advocates can file documents for incorporation of a company/ LLPs and ordered MCA tool kit had to be amended, which are enrolled with advocates. The Bar Council will register as professionals in the MCA portal.

Our Comment:

Section 7(1)(b) of the Companies Act, 2013, clearly shows that advocates can file documents for incorporation of a company/LLPs. Though the portal of MCA has stated that no provision has been made for member/advocates of Bar Councils and Bar Councils has not been provided as an option in the list of Councils. If this is the case, the same discriminatory qualification would be advocates will need to reform.

Ashutosh Sharma, Audit Associate, SW India