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1. Formation & Promotion
of a
Company

2. Formation

3. • Promotion
• Incorporation
• Raising of Capital
• Commencement of Business

4. Promotion

5. Activities required to establish a
New Business Unit for
Manufacturing/ Distribution of
any Products/ Services

6. Role & Importance of Promoter
“A promoter can be defined as a person or
group of persons who conceive the idea of
setting up a new business, assess its feasibility
and take necessary steps to arrange the basic
requirements and establish a business unit say,
a Company and put into operation.”

7. Types of Promoters
• Professional Promoters
• Financial Promoters
• Technical Promoters
• Entrepreneurial Promoters
• Specialised Institutions
• Government

8. Process of Promotion
• Discovery of a Business Idea
• Investigation & verification
• Assembling
• Financing the Proposition

9. Incorporation

10. A Company comes into existence only
when it is Registered with the ROC
(Registrar of Companies)

11. Fill in the “Name Availability Form”
with Name ending with ‘Limited’ or
‘Private Limited’
Approval of Name

12. Filing of Documents
• MoA (Memorandum of Association)
• AoA (Articles of Association)
• List of Proposed Directors with Addresses
• Written Consent of Directors
• Notice about the Registered Office of the Company
• Copy of Name Approval Letter
• Statutory Declaration of compliance with the Companies Act

13. Registration Fees
Necessary ‘Filing Fees’ and
‘Registration Fees’ at the
prescribed rates are also to be paid

14. Certificate
of
Incorporation
(or Birth Certificate)

15. Raising of
Capital

16. Funds from
Members,
Banks & Other
Sources
Funds from
Public,
Banks & Other
Sources
(Private Company) (Public Company)

17. Raising of Capital
• Preparation of Draft Prospectus (inspected by SEBI)
• Filing of Copy of Prospectus with the ROC
• Issue of Prospectus to the Public
• If Minimum Subscription received, Allot Shares under
SEBI Guidelines
• Listingof Sharesin recognised Stock Exchange

18. Underwriting
Popularly known as a “Safety Valve” to the “Minimum
Subscription” requirement

19. Commencement
of Business

20. File a Statement with the following
Declarations to the ROC

21. • Thata Prospectus has been filed with the ROC
• That the Shares have been allotted up to the amount
of the Minimum Subscription
• That the Directors have taken up or purchased
the Minimum Number of shares required to
qualify themselves to be Director

22. • Thatno Money is liable to become refundable to
the Applicants by reason of failure to obtain
permission for Shares to be traded in a recognised
Stock Exchange
• A Statutory Declaration by a Director or the
Secretary of the Company stating that the
requirements relating to the Commencement
of Business have been duly complied with

23. Certificate
of
Commencement
of Business

24. Some Important
Documents

25. Memorandum of Association
• Principle Document
• Charter of the Company
• Defines the Limitations of Powers of Company
• Defines relationship of Company with Outside
World (External Document)

26. Clauses of MoA
• Name Clause
• Registered Office Clause
• Object Clause
• Liability Clause
• Capital Clause
• Association Clause

27. Articles of Association
• Bye-Laws of the Company
• Contain Rights, Duties & Powers of the Management
• Defines relationship of Company with its Members
• Choice to Register own AoA or Adopt the Table A (Schedule I
of Companies Act)

28. Prospectus
“Any document described or issued as a prospectus
and includes any notice, circular, advertisement
or other document, inviting deposits from the public
or inviting offers from the public for the subscription or
purchase of shares or debentures of a company or
body corporate”
- Companies Act

29. Objectives of Prospectus
• To informthe public about the company
• To induce people to invest in the shares or
debentures of the company
• To provide an authentic information about the
company and the terms and conditions of issue of
shares and debentures

30. Contents of Prospectus
• General Information (name, office of the company, stock exchange where shares
are to be listed)
• Capital Structure of the Company
• Terms of Payment & Application Procedure
• Company Management & Project Report
• Other Listed Companies under the Same Management
• Outstanding Litigations & Defaults
• Management Perceptionof Risk factors

31. Thank You