Legal Analysis of ‘X’ Claiming Costs from the Company

Introduction
In this case, ‘X’ prepared the memorandum and articles of association for a proposed company upon the instructions of the promoters and got the company registered. However, the company refused to pay the costs claimed by ‘X’. This raises the question of whether ‘X’ will succeed in claiming costs from the company or not.

Provisions of the Companies Act, 2013
The Companies Act, 2013 provides for the following provisions related to the payment of costs to the company’s promoters:

Section 4(6) – Memorandum of Association: The memorandum of association is a legal document that sets out the company’s objectives and powers. It must be signed by at least seven persons in the case of a public company, and two persons in the case of a private company. The cost of preparing the memorandum of association can be claimed by the promoters from the company.

Section 5(6) – Articles of Association: The articles of association are a set of rules that govern the internal affairs of the company. The cost of preparing the articles of association can be claimed by the promoters from the company.

Section 34 – Payment of Commission: The company may pay a commission to any person in consideration of his services in promoting or forming the company or in connection with the company’s business, subject to certain conditions.

Analysis
In the given case, ‘X’ was instructed by the promoters to prepare the memorandum and articles of association and got the company registered. Therefore, ‘X’ can claim the costs of preparing the memorandum and articles of association from the company under Section 4(6) and Section 5(6) of the Companies Act, 2013.

However, it is not clear from the given facts whether ‘X’ was entitled to receive a commission from the company under Section 34 of the Companies Act, 2013. To claim a commission, ‘X’ must have rendered services in promoting or forming the company or in connection with the company’s business, and the payment of commission must comply with the conditions mentioned in the section.

Conclusion
In conclusion, ‘X’ can succeed in claiming the costs of preparing the memorandum and articles of association from the company under the Companies Act, 2013. However, the claim for commission depends on whether ‘X’ rendered services in promoting or forming the company or in connection with the company’s business, and whether the payment of commission complies with the conditions mentioned in Section 34 of the Act.