Site navigation

Under the Companies Act, 2013, what term does the Act use for the persons who form a company by putting their names to its memorandum at incorporation?

Question and options

Under the Companies Act, 2013, what term does the Act use for the persons who form a company by putting their names to its memorandum at incorporation?

  1. Promoters

  2. First directors

  3. Incorporators

  4. Subscribers

Answer and explanation

Correct answer: D - Subscribers

Section 3(1) of the Companies Act, 2013 speaks of a company being formed by persons 'subscribing' to the memorandum, and section 2(55) treats these subscribers as having agreed to become members. Promoters, defined in section 2(69), need not sign the memorandum at all. Subscribers who are individuals may become the first directors under section 152(1) if the articles name none, but that is a later consequence, not the term for those who sign.

Practice for these exams

Related exam syllabi

More solved explanations in Incorporation; memorandum & articles; ultra vires, constructive notice & indoor management