Formation of Joint Stock Company: Promotion and Promotes of a Company: Steps in Promoting

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Steps Involved in Promotion of a Company

Steps involved in promotion of a company

Steps Involved in Promotion of a Company

Steps involved in promotion of a company

Discovery of a Business Idea

  • Process of business promotion begins with conception of an idea of business opportunity.

  • Idea may come from non-availability of any product to satisfy the existing need of people.

For example:

During early 1940’s there was no “Walkman”.

  • This idea gave birth to the new product “Walkman”.

Investigation and Verification

  • Once the idea has been conceived, then investigation is made to establish the soundness of the proposition.

For example:

If technology is available but the cost involved in making a “Walkman” would be so high that no customer could be able to purchase it.

  • Investigation on technical feasibility, commercial viability and profitability are presented in a report called “project report” or “feasibility report”.

  • Report helps in procuring licenses and arrange the necessary finance from financial institutions and other investors

Assembling

  • The next step is assembling or making arrangements for all the necessary requirements.

  • It includes land, building, machinery, tools, capital, etc.

  • Decision is also to be made regarding size, location and layout etc.

  • Also make agreement with bankers to finance and take initial steps for the setting up of a Company.

Financing the Proposition

  • Proportion of capital to be raised from owner’s fund, that borrowing from banks and others.

  • How and when to raise the share capital from the general public.

  • Agreements are made with merchant bankers, underwriters and stockbrokers.

  • These are to assist the capital issue and so on.

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