company formation method
(Procedure of Formation of Company) The method of formation of a company includes all those actions which have to be done from the commencement of the company to making it capable of starting business. These proceedings are divided into the following parts
1. Promotion of Company
This is the first stage of the formation or establishment of the company, because it is through this that a company takes its life. Enforcement means to search for business related facilities and opportunities and to collect capital, material, property and management capacity for the purpose of getting profit from the business organization. In this way, the initial work done in relation to the formation of the company is called enforcement. The persons who promote the company are called ‘promoters’. The procedure for enforcement can be explained as follows
(1) Discovery of the idea and preliminary research – Under this, the originator in his mind
Makes a thorough investigation of the ideas regarding the formation of the company and to give it a reality.
For this he starts preliminary research and explores the possibility of setting up the company.
(2) Conducting detailed investigation- A detailed investigation is done to give effect to the idea. While conducting a detailed investigation, the promoter tries to find out the hidden weaknesses in his idea or research. He finds out how much capital would be required, what the expenditure could be and what would be the expected profit etc. (3) Collecting the necessary items – doing preliminary research and detailed investigation
After taking it, the promoter starts collecting the necessary materials for the formation of the company.
Is. For this work, he establishes contact with various experts and institutions and makes necessary contracts etc. (4) To make financial management, he tries to collect capital through prospectus and capital
In collecting, he takes the help of the receivers and takes other necessary actions.
(5) Preliminary contract – Preliminary contract means those agreements which the promoter enters into before the amalgamation of the company with various parties on behalf of the company and for its benefit, such as the purchase of property between the sellers and the promoters of the company. contract of Since these agreements are made before the formation of the company, the promoters of the company are personally responsible for them.
2. Incorporation of Company
It is mandatory for every company to be amalgamated. The company cannot do any work without amalgamation. The amalgamation is done in the office of the Registrar of Companies of the same state in which the head office of the company is situated.
(A) Preliminary Steps
The actions are performed they are the following
prior to the amalgamation of the company
1. Determining the type of company – The promoter has to first determine the type of his company. There is a provision for the registration of a public company and a private company under the Companies Act. Now any citizen and resident of India can also register for One Person Company (OPC). But such a company can be registered as a private company only. All these companies may be limited by shares or liability limited by guarantee.
2. Determination of the place of the registered office – First of all decide that place.
The place where the registered office of the company will be established. Memory
If it is not decided, then the name of that state must be decided in which state is registered.
Have an office. 3. Obtaining Identification Number by Proposed Operators – Any person who intends to become a Director of the Company or who consents to accept appointment as Director in any proposed Company shall be provided with an ‘Operator Identification Number’ (Director Identification Number or DIN). ) is to be obtained. For this such person has to apply to the Central Government. Central Government ‘Operator Identification Number’ within 30 days of receipt of application
allocates. 4. Obtaining ‘Digital Signature’ Now there is a system of ‘on-line’ application for registration of companies. A ‘digital signature’ is required to file such applications. Therefore, the promoters/proposed operators or company secretary of the proposing company have to obtain the ‘digital signature’ from any authorized person and obtain his certificate.
5. Selection and reservation of the name of the company – For the amalgamation of the company, the name of the proposed company has to be selected and fixed and the registrar has to make a reservation for that name of the company. To get the name fixed and reserved, the promoter has to make an application to the registrar. This application form form no. INC-1 and the prescribed fee should also be deposited along with the application.
6. Draft Memorandum and Articles of Association – Prepares draft of the Memorandum and Articles of Association of the company by the promoter. For this work, the promoters should take the help of their lawyer, company secretary etc.
7. To get the drafts scrutinized by the registrar-registration of drafts of memorandums and articles
Should be checked. By doing this their errors can be corrected even before they are printed.
and delay in amalgamation can be avoided.
8. Printing of the Memorandum and Articles of Association After examining the drafts of the Memorandum and Articles by the Registrar, they are printed. Nowadays, laser print has also been recognized by the computer. So printing can be done in this way also.
9. Stamping and marking of date – After printing, necessary stamps are put on the councilor’s memorandum and councilor’s articles, after which the date is also marked on these documents. This date must be after the date of stamping.
10. Getting the signatures of the subscribers There is a clause of the subscribers in the memorandum of the company where the signatures of the subscribers have to be done. Signatures of at least 2 subscribers are required in case of public company and at least 2 in case of private company. In the case of a one person company, it is to be signed by only one subscriber. If the subscriber is not available for self-signing, the signature can be done by any of his authorized person. The name, address, occupation, etc. of the subscriber are also mentioned in this section.
11. Declaration regarding the fulfillment of legal requirements – The promoter has to also make a declaration regarding the fulfillment of legal requirements for the amalgamation of the company. In other words, the promoter has to make a declaration to the effect that all the requirements of the provisions of the Companies Act and the rules made thereunder in relation to the registration of the company and matters incidental thereto have been complied with.
12. Obtaining the details of the subscribers – The promoter has to obtain the details of the subscribers also. Their details include their family name, residence address, nationality etc. 13. Preparing the details of the directors, managing directors, if the promoters want to appoint the directors, whole-time directors, managing directors or managers etc., then they should get the details of their names, addresses etc. and also the copy of the transactions to be done with them. .
14. Obtaining concurrence of directors – Promoters have to obtain written consent also from those persons who have agreed to be the first directors of the company and whose name is mentioned in the Articles of Association of the company. Such consent has to be obtained in the prescribed format and manner.
(B) The registrar should send the following documents to the concerned Registrar of Companies after the delivery-preliminary actions of the forms
1. Information of Address for Correspondence Every company shall at the time of amalgamation, submit to the Registrar a document indicating the address of the place at which correspondence may take place at the time of establishment of the registered office of the company.
2. Memorandum of Understanding – Every company has to file its memorandum with the Registrar. The memorandum must be signed by all the subscribers of the company in the manner prescribed. 3. Articles of Association Every proposed company is also required to file its Articles of Association with the Registrar for its amalgamation. The Articles should also be signed by all the Subscribers. Tables F to J of Schedule I to this Act give the drafts of Articles of Association for different types of companies. Every company should prepare its Articles of Association in any one of them suitable for its nature.
4. Declaration of fulfillment of legal requirements Every company is also required to file a declaration regarding fulfillment of legal formalities/requirements at the time of its amalgamation. In other words, the company has to file a document of declaration to the effect that the company has made provisions under and under the Companies Act in relation to the registration of the company and matters incidental thereto. The formalities under the said rules have been completed.
5. Affidavit of Subscribers and First Directors – Every company has to obtain an affidavit from every subscriber of its memorandum and every such first director whose name is mentioned in the Articles of Association and submit it along with the application for amalgamation.
6. Written consent of directors- At the time of amalgamation of the company, the registrar should also submit the written consent (in Form No. DIR-12) of those who have agreed to act as directors of the company. This consent has to be given in the prescribed manner and format. 7. A copy of the letter confirming the reservation of the name is also attached to the company.
by which the registrar confirms the reservation of the name of the company.
8. Receipt of prescribed fee- Some charges are also levied for amalgamation of the company. This fee is deposited in the account of Government of India. The rates of duty are given in the Tenth Schedule of the Indian Companies Act. The amount of fee corresponding to these rates can be deposited by electronic transfer or through cash or bank draft. Challan for payment of fee is also received electronically. All these forms should be submitted by the Registrar within 60 days from the date of application for reservation of company name.
(C) Obtaining Certificate of Incorporation – When the Registrar has received the necessary forms along with the fixed fee, then he makes a thorough examination of these forms. If the Registrar is satisfied that