Section 10 — Effect of memorandum and articles

(1) 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, and contained covenants on its and his
part to observe all the provisions of the memorandum and of the articles.
(2) All monies payable by any member to the company under the memorandum or articles shall be a
debt due from him to the company.
2[10A. Commencement of business, etc. —(1) A company incorporated after the commencement of
the Companies (Amendment) Act, 2019 and having a share capit al shall not commence any business or
exercise any borrowing powers unless—
(a) a declaration is filed by a director within a period of one hundred and eighty days of the date of
incorporation of the company in such form and verified in such manner as may be prescribed, with the
Registrar that every subscriber to the memorandum has paid the value of the shares agreed to be taken
by him on the date of making of such declaration; and
(b) the company has filed with the Registrar a verification of its registere d office as provided in
sub-section (2) of section 12.
(2) If any default is made in complying with the requirements of this section, the company shall be
liable to a penalty of fifty thousand rupees and every officer who is in default shall be liable to a penalty of
one thousand rupees for each day during which such default continues but not exceeding an amount of one
lakh rupees.
(3) Where no declaration has been filed with the Registrar under clause (a) of sub-section (1) within a