how a company gets its certificate of incorporation.

1. FORMATION OF A COMPANY
Promotion or formation :- the promotion of every
business requires a process to be followed. A
number of formalities have to be completed
before a unit can come into existence. The length
of the process and the number of formalities very
with the type of organisation.
“promotion may be defined as the process of
organizing and planning the finance of a business
enterprise under the corporate form.

2. Stages of promotion
• Discovery of an idea :- the first stage in company promotion is
the discovery of a new idea. A person visualises that there are
opportunities for a particular type of business and it can be
profitably run. He develops this idea with the help of technical
experts in this field. Then the idea is taken forward for more
executive analysis.
• Detailed investigation :- the promoters will estimate total
demand for the product. After determining the perspective
demand for goods he will think of arranging finances. The
availability of power, labour, raw material and machinery is
also considered.

3. • Assembling the requirements :- he persuades some more
persons to join hands with him by becoming directors or
founder members. If he has invented something new, he
should get it registered in his name.
• Financing the propositions :- the requirements of finances are
estimated first. Then the sources from which this money will
come are determined.

4. LEGAL ASPECTS OF PROMOTION
(FORMATION OF COMPANY)
• REGISTRATION OR INCORPORATION :-
• A company comes into existence only after its registration
with the registrar of the companies. A legal process have to be
completed before a company get registered. After ensuring
that all necessary documents are filed, the registrar of the
companies issues a certificate of incorporation. With this
certificate, the company becomes a separate legal entity.

5. Steps for incorporating a company or
registration of a company
• Application for approval of name :- the first step in getting a
company incorporated is of obtaining the approval of the
name from the registrar of companies. The name, which is not
identically with or does not closely resemble the name of the
company already registered. The applicant should give a panel
of three names in order to avoid delay. The application for the
approval of the name should be sent the registrar of
companies of the state in which the company is to be
situated. The registrar is expected to approve the name within
14 days of the receipt of the application. The proposed name
must be registered within 3 months from the date of
intimation by the registrar.

6. • Preparation of memorandum of association :- it is the
constitution of the company which describes its objects and
scope and the relation with the outside world. The
memorandum is to be signed by at least seven persons if it is
a public limited company and at least two persons in case of
private limited company.
• Preparation of articles of association :- it is a document which
contains rules and regulations relating to the internal
management of the company. A public limited company may
not file its own articles of association, it may adopt model
clauses prescribed in Govt. act. A private limited company is
also required to submit its articles duly signed by the
signatories.

7. • Preparation of other documents :-
• 1. execute power of attorney.
• 2. memorandum of association and articles of association
• 3. company is required to have a registered office and its
information is filed with the registrar within 30 days of its
registration.
• 4. the declaration must be signed by an advocate of supreme
court or high court.
• Payment of fees :- prescribed registration fees and filing fee
for each document filed for registration are to be paid at the
registrar’s office. The fee to be paid varies with the amount of
nominal capital in case of companies with share capital or
according to the number of members in case of companies
without share capital.

8. • Incorporation certificate :- when all documents are found in
order, the registrar will enter the name of the company in the
register of companies and issues a certificate of incorporation.