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.
- 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.
Companies Based On Minimum Number Of Promoter-
- Public Company – 9Promoters
- Private Company – 2Promoters
- One person Company – 1Promoter
Companies Based On Capital Structure-
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.
- 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
- 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
- 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
- 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
Fiduciary Duty- It is a duty of person to act in good faith and trust which is put upon him by another person.
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
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.
- 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.
- Permanent Account Number
- Issued by Income Tax Department
- 10 digit Alpha-numerical code
- Proof of identification of a person paying Tax
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
- 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
- Corporate Identity Number
- Issued by ROC at time of Incorporation of Company
- 21 digit alpha – numerical code
- Listed or Unlisted company
- Industry code
- State of Company’s location
- Year of incorporation
- Type of ownership
- Registration number
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.