By going through these Maharashtra State Board Secretarial Practice 11th Commerce Notes Chapter 3 Formation of a Company students can recall all the concepts quickly.

Maharashtra State Board Class 11 Secretarial Practice Notes Chapter 3 Formation of a Company

Formation of a Company-

  • it means registering or incorporating a company with the Registrar of Companies (R.O.C.)
  • it must be registered with ROC of the concerned state where a company is situated.
  • ROC is an authority as per the companies Act which can incorporate or register the companies.
  • 3 types of companies can be formed depending on number of promoters.

Promoter-

  • is a person who takes an initiative efforts to form a company.
  • Promoter can be an individual, a partner, a company, an association or a syndicate.

Maharashtra Board Class 11 Secretarial Practice Notes Chapter 3 Formation of a Company

Companies Based On Minimum Number Of Promoter-

  1. Public Company – 9Promoters
  2. Private Company – 2Promoters
  3. One person Company – 1Promoter

Maharashtra Board Class 11 Secretarial Practice Notes Chapter 3 Formation of a Company 1

Companies Based On Capital Structure-

Maharashtra Board Class 11 Secretarial Practice Notes Chapter 3 Formation of a Company 2

MOA – Memorandum of Association is a document stating the aims and objectives of the company.

AOA – Articles of Association is a document stating rules and regulations for internal management.

Promotion – It means taking all necessary steps to incorporate a company as per the rules and regulation of the Companies Act, 2013.

Maharashtra Board Class 11 Secretarial Practice Notes Chapter 3 Formation of a Company

Prospects:

  • a document issued by public company.
  • inviting public to subscribe or buy the shares of prospects issuing company.

Annual Return :

  • yearly statement prepared by the company.
  • giving information about company’s ownership, its activities and financial position of the company.
  • filed with Registrar of Company.

Stages In Formation Of A Company:

1. Promotion Stage
Steps:

  • Idea of starting business
  • Deciding objects of the business, amount of capital, scale of operation, etc.
  • Preparing documents — MOA and AOA
  • Approaching investors for capital
  • Nominating first directors and first subscribers to MOA and AOA
  • Forming contracts (Pre- incorporation Contracts or preliminary contracts)

2. Incorporation state
Steps:

  • Obtain Digital Signature Certificate (DSC)
  • Register DSC in the name of Director with MCA
  • Obtain Director Indentification Number (DIN)
  • Apply for Reservation of Name
  • Finalize Memorandum of Association and Articles of Association
  • Signing, Stamping and Dating of Memorandum and Articles of Association
  • Prepare other necessary documents
  • Decidingaddressfor communication
  • Obtain a statutory declaration
  • Filing of application and documents for Incorporation with ROC
  • Obtaining Certificate of Incorporation

Commencement of Business Stage
Steps:

  • Filing of Declaration. by Director
  • Filing a verification of registered office
  • Obtain licence from Sectoral Regulator
  • Obtain Certification of Commencement of business

Role of Promoters:

  • Decide objects of business, amount of capital, size of business operation
  • Generate idea of starting business
  • Entering Pre-incorporation conträcts Preliminary contracts
  • Prepare documents MOA and AOA
  • Approach investors for raising capital
  • Nominate first directors and first subscribers to MOA and AOA

Maharashtra Board Class 11 Secretarial Practice Notes Chapter 3 Formation of a Company 3

Fiduciary Duty- It is a duty of person to act in good faith and trust which is put upon him by another person.

Maharashtra Board Class 11 Secretarial Practice Notes Chapter 3 Formation of a Company

Steps in Promotion of a Company-

  • Come up with an idea or activity
  • Preparing financial plan
  • Preparing draft of MOA and AOA
  • Entering Preliminary contracts
  • Appointing first Directors

Maharashtra Board Class 11 Secretarial Practice Notes Chapter 3 Formation of a Company 4

DSC- Digital Signature Certificate is a signature of a person in digital or electronic form
It is used to sign on e-documents.

MCA- Ministry of Corporate Affairs administers the Companies Act, 2013.

DIN-

  • Director Identification Number is to be applied in electronic form SPICe – 32 at the time of incorporation.
  • A person to be appointed as a Director must have a DIN.
  • It is a 8 digit identification number.

CRC- Central Registration Centre is an authority which provides speedy incorporation related services.

PAN-

  • Permanent Account Number
  • Issued by Income Tax Department
  • 10 digit Alpha-numerical code
  • Proof of identification of a person paying Tax

Maharashtra Board Class 11 Secretarial Practice Notes Chapter 3 Formation of a Company 5

Maharashtra Board Class 11 Secretarial Practice Notes Chapter 3 Formation of a Company

Contents Of Certificate Of Incorporation-

  • Pan and tan of a Company
  • Name of a Company
  • Date of issue of Certificate of Incorporation
  • Signature of ROC with date and seal
  • CIN

Maharashtra Board Class 11 Secretarial Practice Notes Chapter 3 Formation of a Company 6

TAN-

  • Tax Deduction and Collection Account Number
  • Issued by Income Tax Department
  • 10 digit alpha-numerical code
  • Issued to all persons —responsible for deducting or collecting Tax

Maharashtra Board Class 11 Secretarial Practice Notes Chapter 3 Formation of a Company 7

CIN – 

  • Corporate Identity Number
  • Issued by ROC at time of Incorporation of Company
  • 21 digit alpha – numerical code

Indicates

  • Listed or Unlisted company
  • Industry code
  • State of Company’s location
  • Year of incorporation
  • Type of ownership
  • Registration number

Maharashtra Board Class 11 Secretarial Practice Notes Chapter 3 Formation of a Company 8

Maharashtra Board Class 11 Secretarial Practice Notes Chapter 3 Formation of a Company

Word Meaning:

incorporation – to enroll; commencement – to start; promoters – persons who carry the process of formation of a company; extent – amount/size; guaranteed – confirmed; accustomed – usually; nominated – suggested/ put forward; subscribers – members; fiduciary – financial; compensates – returning back in terms of money; reimbursing – to pay back / repay; preliminary – starting, initial; database – records; pursuant – according to; description – detailed; convicted – declared; preceding – coming before something; stating – to declare; integrated – jointly / combined; distinct – well defined in existence; borrowing – to get or receive something; declaration – a report, statement; sectoral – specific area; regulators – a person or body who supervises (looks after) particular area; prospectus – a printed booklet giving details of company.