Subscribers Of MOA & AOA During Incorporation Of A Company

Before you can commence your business activities, it is crucial to understand the term subscriber in company law. Having this clarity helps in forming a proper team of promoters and first investors of a company. Online company registration in India is now quite common for young entrepreneurs. Hence, it is very important for young entrepreneurs to be aware of the applicable laws and the important terms affecting their new company. Through this article, you can understand the term subscribers meaning in company law and the implications associated with it.

Who is a subscriber of a company?

A subscriber in company law is any person who subscribes to the shares of the company when the company is incorporated. Moreover, the details of all the subscribers of the company are mentioned in the MOA and AOA of the company. These form the charter document for the existence of the company. As a result, the subscribers in company law are also referred to as a subscriber to memorandum of association. 

Number of subscribers to form a company 

The Companies Act and related rules provide the requirement for a minimum number of subscribers to form a company. This changes on a case to case basis as follows. 

Type of Company	Number of Subscribers
Private Limited Company	2
One Person Company	1
Public Limited Company	7

During the company registration process, you need to ensure that you meet this minimum requirement. Besides, there is no limit on the maximum number of subscribers in a company. As per the new incorporation process introduced by the MCA, there can be a maximum of 7 subscribers to a memorandum to file the application in a single form. All the subscribers need to sign the form with a digital signature. In the case of more than 7 subscribers, the application of incorporation of a company should be done in another form wherein digital signatures are not necessary. 

Is a subscriber different from a shareholder? 

The subscribers of the company are its first shareholders, who subscribe shares at the time of incorporation of the company. A Shareholder is any person holding the company’s share. That means, they can also buy shares after the incorporation of the company.  Hence a subscriber is always a shareholder of the company but the shareholder may not be a subscriber in company law. 

Who can become a subscriber in company law? 

Any individual or firm or body corporate can become a subscriber in a company except in a One Person Company.  In an OPC only an individual can become a subscriber. In the case of a firm or company as a subscriber of your private company, you need to appoint a representative.

What is the liability of a subscriber?

Every subscriber to the memorandum of a company needs to pay the subscription amount to the company after incorporation. The company is required to deposit this amount in the current account of the company within 180 days of incorporation, as a part of the post registration compliance requirements. Thereafter, the subscriber is liable for the unpaid share capital of the company. Whenever a company calls for an unpaid amount, subscribers need to pay for such an amount. This is only applicable if they have not sold those shares yet.

Also Read: Liability Clause of MOA

Details of Subscribers 

You need to submit the details of subscribers through the subscribers’ sheet in the subscription clause of MOA. Here is the specimen copy for the details of the subscribers in company law. 

Names, addresses, descriptions and occupations of subscribers	No. of shares taken by each subscriber	Signature of subscriber	Signature, names, addresses, descriptions and occupations of witnesses
A.B. of……..Merchant	…………..		Signed before me: Signature………………….
C.D. of……..Merchant	…………..		Signed before me: Signature………………….
E.F. of……..Merchant	…………..		Signed before me: Signature………………….
G.H. of……..Merchant	…………..		Signed before me: Signature………………….
I.J. of……..Merchant	…………..		Signed before me: Signature………………….
K.L. of……..Merchant	…………..		Signed before me: Signature………………….
M.N. of……..Merchant	…………..		Signed before me: Signature………………….

Total shares taken:       ________________ 

Public details 

The details of subscribers are freely available to the public. It is because the memorandum of association is a public document and such details are included in it. Anyone can get access to such details by paying the requisite fee to the MCA. 

Also Read: What is the capital clause?

Conclusion 

It is very important to have a clear idea about the duties of the subscribers in company law before you proceed with company registration. By now, it is also clear that any natural person or legal person such as a company, body corporate, LLP, etc can be a subscriber in company law.