The document outlines the key stages in the formation and incorporation of a company in India. It discusses 4 main stages: 1) Promotion stage where the idea is developed and important decisions are made. 2) Incorporation/registration stage which gives the company legal existence when registered under the Companies Act by filing various documents. 3) Capital subscription stage where funds are raised through shares (public companies) or from members/banks (private companies). 4) Business commencement stage where private companies can start operations after registration while public companies need an additional certificate to commence business.

1. BUSINESS ORGANIZATION
ASSIGNMENT
Submitted by:- ROHAN TALREJA
BBA LLB 1st Year (2nd Semester)
Roll No. :- C-56
Topic:- STAGES IN FORMATION & INCORPORATION
OF COMPANY

2. INTRODUCTION
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.
 It may be noted that before a company is actually formed, certain persons,
who wish to form a company, come together with a view to carry on some
business. Such persons have to decide various questions.
a) Which business they should start?
b) They should form a company?
c) Which type of company they required?
d) What should be the capital of company?
 There are various stages in formation of company.

3. Stages/Steps Involved
Promotion Stage
Incorporation/Registration
Stage
Capital Subscription Stage
Business Commencement
Stage

4. Promotion Stage
A business enterprise does not come on its own. The process of business promotions comes when someone
comes up with an idea and ends when that idea is converted into the process of action. i.e. the formation
of business enterprise and commencement of its business. It is an overall effort that the members of the
company put to make the company.
Few important decisions are to be taken before starting a company. Some of them are important and
some are less important.
IMPORTANTMATTERS:-
Whether to start a new company altogether
To acquire already running business.
OTHERMATTERS:-
Size of the company
Capital involved in the project
Sources of capital
Whether Public/Private company

5. Incorporation/RegistrationStage
It is the registration that gives the company a birth or existence. A company is properly formed when it is
properly registered under the Company Act. There is a procedure for the registration process that every
organization must follow. It involves the following documents and procedures.
Memorandum of Association: It is to be signed by the minimum member that is 7 persons for the
public company and 2 in case of private company.
Articles of Association: The document is signed by all those persons who all have signed the
memorandum of association.
List of directors: A list of directors with their names, address, and occupation is prepared and filed
with the registrar of the companies.
Notice of the Head Office: It is also customary to file the notice of the address of the company’s
registered office at the time of incorporation.
 Statutory declaration: A statutory declaration mentioning that the requisites of the act and the rules
there under have been compiled.
Written Consent : A written consent of the directors that they have agreed to act as directors has to be
filed with the registrar of the company.

6. Capital Subscription Stage
 Incase of a private limited co. the capital is raise from members or banks and other sources .
In Public co. the capital is raised from public through shares.
 To issue shares company should draft a prospectus and get it inspected by SEBI (STOCK EXCHANGE
BOARD OF INDIA) and follow all guidelines laid down by SEBI.

7. Business Commencement Stage
Private ltd. Company can start its business after registration (stage 3).
Public co. needs a certificate called certificate of commencement of business .
Certificate of commencement is obtained from registrar of co.
A certificate of incorporation is one which certifies that the company is
incorporated. It is issued by the registrar of companies.
It contains :-
1. Name of company.
2. Date of its issue.
3. Signature of registrar with seal.
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