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    Formation - of - Company by Rajat Jhingan

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    The document discusses the key steps involved in forming a company in India. A company must go through promotion, registration/incorporation, capital subscription and commencement of business. For a private company, registration allows it to begin operations, while a public company must also hold a statutory meeting, submit a report and obtain a certificate of commencement from the Registrar of Companies to officially open for business. The memorandum of association outlines the company's name, type and objectives while the articles of association define rules for shareholder and board meetings.

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    Formation - of - Company by Rajat Jhingan

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    rajat_mars
    40 views14 pages
    The document discusses the key steps involved in forming a company in India. A company must go through promotion, registration/incorporation, capital subscription and commencement of business. For a private company, registration allows it to begin operations, while a public company must also hold a statutory meeting, submit a report and obtain a certificate of commencement from the Registrar of Companies to officially open for business. The memorandum of association outlines the company's name, type and objectives while the articles of association define rules for shareholder and board meetings.

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    Formation_of_company by Rajat Jhingan

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    The document discusses the key steps involved in forming a company in India. A company must go through promotion, registration/incorporation, capital subscription and commencement of business. For a private company, registration allows it to begin operations, while a public company must also hold a statutory meeting, submit a report and obtain a certificate of commencement from the Registrar of Companies to officially open for business. The memorandum of association outlines the company's name, type and objectives while the articles of association define rules for shareholder and board meetings.

    Copyright:

    Attribution Non-Commercial (BY-NC)
    Download as PPT, PDF, TXT or read online from Scribd
    Download as ppt, pdf, or txt
    40 views14 pages

    Formation - of - Company by Rajat Jhingan

    Uploaded by

    rajat_mars
    The document discusses the key steps involved in forming a company in India. A company must go through promotion, registration/incorporation, capital subscription and commencement of business. For a private company, registration allows it to begin operations, while a public company must also hold a statutory meeting, submit a report and obtain a certificate of commencement from the Registrar of Companies to officially open for business. The memorandum of association outlines the company's name, type and objectives while the articles of association define rules for shareholder and board meetings.

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    Attribution Non-Commercial (BY-NC)
    Download as PPT, PDF, TXT or read online from Scribd
    Download as ppt, pdf, or txt
    of 14

    FORMATION OF A COMPANY

    Rajat Jhingan

    By Rajat Jhingan

    Introduction
    Before a company is formed, certain preliminary steps are to be taken. E.g. whether it should be a private company or a public company; what should be its capital etc.

    As regards a private company, it needs to go through the first two stages only. As soon it receives the certificate of incorporation, it can commence business. This is so because it cannot invite the public to subscribe to its shares and must arrange to raise the capital privately. Promotion
    Registration or incorporation But Public Company has to go through all of the four stages. Commencement of Business
    By Rajat Jhingan 2

    Capital Subscription

    Promotion
    This is the first stage in the formation of a company. It refers to the entire process by which a company is brought into existence. It starts with the conceptualization of the birth a company and determination of the purpose for which it is to be formed. What we mean by promoters?
    The persons who conceive the company and invest the initial funds are known as the promoters of the company.

    By Rajat Jhingan

    Pre-Incorporation or Preliminary Contracts


    The promoters of a company usually enter into contract to acquire some property or right for the company, which is yet to be incorporated. Such contracts are called Pre-Incorporation or Preliminary Contracts.

    By Rajat Jhingan

    Pre-Incorporation or Preliminary Contracts

    Position of promoters

    Company not bound by pre-incorporation contract Company can not enforce pre-incorporation contract Promoters are personally liable

    By Rajat Jhingan

    Incorporation by Registration
    The promoters must make a decision regarding the type of company i.e. a public company or a private company or an unlimited company, etc and accordingly prepare the documents for incorporation of the company. In this connection the Memorandum and Articles of Association (MA & AA) are crucial documents to be prepared.

    What is Memorandum of Association ? What is Article of Association ?

    By Rajat Jhingan

    MEMORANDUM OF ASSOCIATION
    Is the document that governs the relationship between the company and the outside world. A memorandum of association is required to state the name of the company, the type of company (such as public limited company or private company limited by shares), the objectives of the company, its authorized share capital, and the subscribers (the original shareholders of the company)..

    ARTICLE OF ASSOCIATON
    Are the regulations governing the relationships between the shareholders and directors of the company, and are a requirement for the establishment of a company. Together with the memorandum of association, they form the constitution of a company. Articles of association typically cover the issuing of shares (also called stock), the different voting and dividend rights attached to different classes of share, restrictions on the transfer of shares, the rules of board meetings and shareholder meetings, and other similar By Rajat Jhingan 7 issues.

    Mode of forming incorporated company (Sec. 12)


    Any 7 or more persons (2 or more in case of a private company) associated for any lawful purpose may form an incorporated company, with or without limited liability. They shall subscribe their names to a Memorandum of Association and also comply other formalities in respect of registration. A company so formed may be :

    a) A company limited by shares, or


    b) A company limited by guarantee, or c) Unlimited company.

    By Rajat Jhingan

    Registration of the Company


    Once the documents have been prepared, vetted, stamped and signed, they must be filed with the Registrar of Companies for incorporating the Company. The following documents must be filed in this connection: 1.The Memorandum of Association duly signed by subscribers and the Articles of Association, if any signed by subscribers to the Memorandum of Association 2. An agreement, if any, which the company proposes to enter into with any individual for appointment as its managing director or whole-time director or manager. 3. A statutory declaration in Form 1 by an advocate, attorney or pleader entitled to appear before the High Court or a company secretary or Chartered Accountant in whole time practice in India who is engaged in the formation of the company or by a person who is named as a director or manager or secretary of the company that the requirements of the Companies Act have been complied with in respect of the registration of the company and matters precedent and incidental thereto.
    By Rajat Jhingan 9

    Public Company
    In addition, in case of a public company, the following documents must also be filed: 1.Written consent of directors in Form 29 to agree to act as directors and their written consent to act as directors and take up qualification shares. 2. The complete address of the registered office of the company in Form 18. 3. Details of the directors, managing director and manager of the company in Form 32.

    By Rajat Jhingan

    10

    Certificate of Incorporation
    Once all the above documents have been filed and they are found to be in order, the Registrar of Companies will issue Certificate of Incorporation of the Company. This document is the birth certificate of the company and is proof of the existence of the company. Once, this certificate is issued, the company cannot cease its existence unless it is dissolved by order of the Court. What are other formalities before or after incorporation? Obtaining Permanent Account Number (PAN) from Income Tax Department Obeying Shop and Establishments Act Registration for Import Export code from Director General of Foreign Trade
    By Rajat Jhingan 11

    Software Technologies Parks of India registration (STPI) if required RBI approval for foreign companies investing in India and FIPB approval, if required. The directors of an Indian company, both Indian and foreigner directors, are required to obtain Director Identification Number - DIN and Digital Signature Certificate - DSC

    By Rajat Jhingan

    12

    Commencement of Business
    A private company or a company having no share capital can commence its business immediately after it has been incorporated. However, other companies can commence their activities only after they have obtained Certificate of Commencement of Business. For this purpose, the following additional formalities have to be complied with: -

    -A statutory meeting within 6 months with ROC -A statutory report to ROC

    Once the above provisions have been complied with, the Registrar of Companies grants Certificate of Commencement of Business after which the company can commence its activities
    By Rajat Jhingan 13

    Thank you

    By Rajat Jhingan

    14

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