Stages in the Formation of a Joint Stock Company

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Commencement of Business

In case of:

  • Private limited company: It can immediately start its business as soon as it is registered.

  • Public limited company: A certificate, known as ‘certificate of commencement of businesses, must be obtained from the Registrar of Companies before starting its operation.

File a statement with the following declarations to the registrar of companies.

  • Prospectus filed with the Registrar of Companies.

  • Share has been allotted up to the amount of the minimum subscription.

  • Directors have taken up or purchased the minimum number of shares required to qualify themselves to be Director.

  • No money is liable to become refundable to the applicants by reason of failure to obtain permission for shares to be traded in a recognized stock exchange.

  • Statutory declaration by a Director or the Secretary of the company.

Important Documents Prepared While Forming a Company

These are:

(1) Memorandum of Association (MOA)

(2) Articles of Association (AOA)

(3) Prospectus

Important documents prepared while forming a company

Important Documents Prepared While Forming a Company

Important documents prepared while forming a company

Difference Between MOA and AOA

Difference Between MOA and AOA
Difference between MOA and AOA

Memorandum of Association (MOA)

Articles of Association (AOA)

Subject matter

Contain aim and objective of company.

Contain rules for implementation of aims and objectives contained in MOA

Relationship

Company and outsiders

Company and its members

Amendment

Difficult to amend aims and other provisions of MOA.

Easily amended by special resolution.

Limitation

Provision given in MOA cannot be outside the scope of Companies Act.

Rules given in AOA can neither be outside the scope of Companies Act nor of the MOA

Obligation

Obligatory for a company

Not obligatory to submit this document to register of companies.