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Formation of a company

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Formation of a company

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Formation of a company

  1. 1. FORMATION OF COMPANY Presented by:  Abhishek Shandilya (14MBA1358)  Vikas chandel (14MBA1376)  Nancy (14MBA1366)
  2. 2.  A Company comes into existence when a group of people come together with a view of forming an association to exploit the business opportunities by bringing together; men, material, money and management What do you mean by Formation of a Company?
  3. 3. BEFORE STARTING COMPANY  Which business to start  Whether a new company should be formed or take over the business of some existing company.  Private company or public company  What should be the capital of the company etc.
  4. 4. 1. Obtain Digital Signature Certificate (DSC) Obtain a Digital Signature Certificate from authorized DSC issuing authority 2. Obtain Director Identification No. (DIN) [S.153] Make Application in Form DIR-3 [Rule 9 of Chapter XI Rules] 3. Register DSC in the name of Director on MCA portal 4. Apply for Reservation of Name [S.4(4)] Apply in Form No. INC.1 [Rule 9].The same shall be reserved for a period of 60 Days 5. Adoption of Memorandum of Association [S.4(6)] MoA shall be in respective form as prescribed inTable A, B, C, D and E of Schedule I as may be applicable STEPS FOR SORMATION OF COMPANY
  5. 5. 6. Adoption of Articles of Association [S.5(6)] AoA shall be in respective form as prescribed inTable F, G, H, I and J of Schedule I as may be applicable 7. Incorporation Promotion Incorporation or Registration Capital structure/ Flotation Commencement of business [S.11] 8. Registered Office [S.12] A company shall have a registered office within 15 days of Incorporation and it shall file Form No.INC.22 [Rule 25] to verify the same.
  6. 6. Incorporation of Companies  Promotion  Incorporation or Registration  Capital Subscription/Floatation  Commencement of Business
  7. 7. 1. PROMOTION  Promoters are persons engaged in, one or the other way in the formation of the company  Promoters make detailed study to assess the feasibility of the business idea and the amount of financial and other resources required
  8. 8. LEGAL POSITION OF PROMOTER  Fiduciary relation PROMOTER’S LIABILITY  Civil liability (Sec 35)  Criminal liability (Sec 34)
  9. 9. DUTIES OF PROMOTER  Not to make any secret profit  To disclose to the company any interest which he has in a transaction entered into by it
  10. 10. REMUNERATION  Lump sum amount  Fully paid shares of company  Commission on shares sold
  11. 11. 2. INCORPORATION I. Type of company: private or public II. Application for availability of Name III. Preparation of MoA and AoA IV. Preparation of other documents V. Filing of documents for registration
  12. 12. IV. Preparation of other documents: i. Consent of directors, ii. particulars of directors, iii. affidavit by the subscriber to memorandum and first directors, iv. address for communication, v. statutory declaration
  13. 13. V. Filing of documents for registration Certificate of Incorporation And CIN (Corporate Identity Number) Certificate of incorporation a conclusive evidence that all the requirements of companies act have been complied with
  14. 14. 3. CAPITAL SUBSCRIPTION  If the capital is said through public offers of shares, the director of the public company will first file a copy of prospectus with the registrar of companies. Then investors forward their application money to the company’s bankers mentioned in the prospectus.
  15. 15. 4. COMMENCEMENT OF BUSINESS  After obtaining certificate of incorporation, a company not having share capital may commence its business  But a company having share capital, whether public or private, has to obtain the certificate to commence the business
  16. 16. FOR OBTAINING CERTIFICATE TO COMMENCE BUSINESS  Declaration by a director: that every subscriber to the memorandum has paid the value of the shares agreed to be taken by him and paid-up share capital of the company is not less than 5 lakh rupees in case of public company and not less than 1 lakh rupees in case of private company on the date of making of this declaration.  Sectoral approvals: e.g. RBI, SEBI
  17. 17. THANKYOU

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