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Formation Of A Company Er. S Sood
 

Formation Of A Company Er. S Sood

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FOR MBA MGMT TRAINEES

FOR MBA MGMT TRAINEES

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    Formation Of A Company Er. S Sood Formation Of A Company Er. S Sood Presentation Transcript

    • FORMATION OF A COMPANY 
      • A company passes through 3 stages:-
      • Promotional stage
      • Incorporation stage
      • Commencement of business
      POWER GROUP : For the Friends By The Friends**
    • 1.Promotional stage
      • Few important decisions are to be taken before starting a company. Some of them are important and some are less important
      • Important matters:-
      • Whether to start a new company alltogether or
      • To acquire already running business .
      • Other matters:-
      • Size of the company
      • Capital involved in the project
      • Sources of capital
      • Whether public/ private co.
    • 2.Incorporation stage
      • It is to ascertain from the registrar whether the proposed name shall be approved if registration is sought for such name or not. If the registrar approve the name then he will issue them a certificate o incorporation under his hand.
      • Public co. has to write a word “ltd..” at the end of the name and
      • Private co.has to write “pvt. ltd.” at the end.
      • A private co. can start its business after getting the certificate of incorporation.
    • Effects of registration & incorporation 
      • The co. will become a separate legal entity on the date of getting this certificate.
      • It acquires perpetual succession
      • The co. can sue and be sued in its own name
      • It can acquire property in its own name
    • Conclusiveness of certificate of incorporation 
      • The certificate issued by the registrar is the conclusive evidence that all the requirements of the company’s act have been complied with. COI is the proof that all the formalities are fulfilled and nothing can be inquired into the proceedings.
    • 3.Commencement of business
      • A public co. has to obtain this certificate before starting its business. This certificate will be issued by the registrar under following circumstances:-
      • Co. having share capital and had issued prospectus:-Where a public co. having share capital and had issued prospectus inviting a general public to apply for shares and debentures, it cannot be issued a certificate of COB & it cannot starts a business until:-
      • Shares have been allotted to the extent of minimum subscription
      • Director have paid the application and the allotment money for the shares taken by them
      • Shares have been dealt with registered stock exchange.
      • A statutory declaration duly verified by one of the Director of the secretary of the co. that the above conditions have been complied with and have been filed with the registrar.
      • 2.Co. having share capital and not issued prospectus:- Certificate Of COB cannot be issued until:-
      • A statement in lieu of prospectus have been filed with the registrar .
      • Director have paid the application and the allotment money for the shares taken by them
      • A statutory declaration duly verified by one of the Director of the secretary of the co. that the above conditions have been complied with and have been filed with the registrar
      • Where the company has fulfilled the above noted requirements , the registrar will issue a certificate of COB and the co. becomes eligible to commence its business.
      • If the company contravenes the above provision then every person responsible for it will be fined Rs.5000 per day till the default continues.