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BUSINESS
formation of a company
Question | Answer |
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what are the three important steps in formation of a company | A. Promotion B. Incorporation C. Subscription of capital |
what is a promoter | taking the initiative to start a company so that the available business opportunity can be put into practice. has has control over the affairs of the company, directly or indirectly whether as a shareholder, director or otherwise; or |
what are the functions of a promoter explain each | 1. Identification of business opportunity 2. Feasibility studies 3 Name approval 4. Fixing up Signatories to the Memorandum of Association 5. Appointment of professionals: 6. Preparation of necessary documents |
what are the Documents required to be submitted | 1. Memorandum of Association 2. Articles of Association 3. Consent of Proposed Directors 4. Agreement 5. Statutory Declaration 6. Receipt of Payment of Fee |
what clauses are included in the MoA: | Name Clause Registered office clause: Object’s clause Liability clause: Capital clause Subscription Clause |
Position of Promoter | They can only make a profit if it is publicly revealed; they cannot make any hidden gains In the event of non-disclosure, the company has the right to cancel the contract |
. Incorporation | ● The application must be filed with the Registrar of Companies in the state where the company's registered office will be located. ● A registration application must be accompanied by specified papers |
Effect of the Certificate of Incorporation | ● The date inscribed on the Certificate of Incorporation marks the beginning of a company's legal existence. ● On that date, it becomes a legal entity It gains the ability to enter legally binding contracts. |
Capital Subscription | ● SEBI clearance is required to raise funds from the public. The Registrar of Companies will receive a copy of the prospectus or a statement in lieu of the prospectus . Bankers, brokers, underwriters, and other professionals are hired |
Process of Capital Subscription: | 1. SEBI Approval 2. Filing of Prospectus 3. Appointment of Bankers, Brokers, Underwriters 4. Minimum Subscription 5. Application to Stock Exchange 6. Allotment of Shares |
what is a prospectus |