11th NCERT Business Studies Chapter 7
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– Stages in the formation of a company
– Documents required for the incorporation of a company
– Prospectus and its necessity for every company
– Return of Allotment
– Interaction with SEBI during company formation
– Promotion of a company: Understanding what it entails and the legal position of promoters
– Memorandum of Association: Definition and explanation of its clauses
– Difference between Memorandum of Association and Articles of Association
– Meaning of Certificate of Incorporation
– Steps of formation of a company
– Name approval process during company incorporation
– Identification of business opportunity by promoters
– Feasibility studies (technical, financial, economic) conducted by promoters
– Functions and responsibilities of promoters
– Incorporation of a company: Application process and necessary documents to be submitted
– Position of promoters in relation to the company
Name the stages in the formation of a company.
The stages in the formation of a company are Promotion, Incorporation, and Capital Subscription.
List the documents required for the incorporation of a company.
The documents required for the incorporation of a company include Memorandum of Association, Articles of Association, Consent of proposed directors, Agreement with proposed managing or whole-time director, and Statutory declaration.
What is a prospectus? Is it necessary for every company to file a prospectus?
A prospectus is an invitation to the public to subscribe to the capital of the company. It is necessary for companies raising funds from the public but not for companies raising funds from friends or relatives (not public).
Briefly explain the term 'Return of Allotment'.
The 'Return of Allotment' refers to the filing of a statement in lieu of a prospectus with the Registrar of Companies at least three days before allotment of shares, and returns of allotment after completing the allotment for companies raising funds from friends or relatives (not public).
At which stage in the formation of a company does it interact with SEBI?
A company interacts with SEBI during the Capital Subscription stage when it is seeking approval and compliance for raising funds from the public.
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