Forms of Business Organisation-2 — OCM STD 11 Commerce — Question
Gujarat BoardEnglish MediumSTD 11 CommerceOCMForms of Business Organisation-23 Marks
Question
Give brief information about clauses included in the memorandum.
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Answer
Procedure to obtain Certificate of incorporation :
The following documents are presented before registrar of companies and if he finds them proper, he issues the certificate of incorporation of company.
Which is a compulsory to bring a company in existence.
Memorandum of Association :
Memorandum of Association is the basic document of the company.
It is considered the constitution of the company.
Formation of company is based on it.
The provision of the following clause is compulsory in it.
Name Clause :
No company can keep the name that identifies other company registered in India or the name which harms the interest of the nation.
Every public company should add the word Limited (Ltd.) after its name.
Every private company limited by share capital should add the word Private Limited (Pvt. Ltd.) after its name.
Registered Office Clause :
Every company has to mention the address of its registered office so that its area of jurisdiction is determined and general public and the registrar of the company and can correspond with the company at the registered office.
Object Clause :
The objective of the company for establishment, type of business etc. are mentioned in this clause.
Company cannot perform the activity which is not mentioned in the clause.
This clause is the most important clause of memorandum.
Liability Clause :
In this clause limited, unlimited, liability limited by guarantee are mentioned.
In the circumstances of one person company, if the person dies, or is not capable to make any agreement then whose name will be entered, is mentioned in this clause.
Capital Clause :
This clause includes the details of authorized capital of the company and its distribution in different types of shares and in fixed amount is mentioned.
Clause of Association or Establishment :
In this clause the members of the company have to show their own hand writings, if the company is a public company then minimum 7 persons and if it is a private company minimum 2 persons are desired to establish the company.
Articles of Association :
The rules regarding internal administration of the company are mentioned within the limit of memorandum.
It includes the rights of the members, shares, installments, shares forfeit, powers of management, meetings of the company etc.
After company's registration before the registrar, Articles of Association become a public document means any person can see it.
List of Directors :
The names of the directors of the company, their address, age, profession, nationality etc. details are to be registered before company registrar. In the board of directors of a company there should be One Female Director.
Written consent of the directors :
The directors of a company have to furnish written consent that they are willing to work as directors.
Declaration of interest in other companies :
Those who are in the Board of Directors
have to register before the registrar, if they are having interest in other companies too. This is applicable to manager, secretary and subscribers.
Statement of Fulfillment of the Provision of Law :
The founders of the company have to submit a declaration with registration fees before the registrar that all the provisions of law for incorporation of company have been followed as per Company's Registration Act.
Thereafter, the registrar examines all these documents and enters detail of documents in his ledger.
If he finds them satisfactory and finally issues the certificate of incorporation.
The date on which the certificate is issued is considered the date of commencement of business.
The registrar of the company along with the certificate allots corporate identity number to the company, Which is mentioned in the certificate of registration.
Original documents submitted by the company for incorporation are preserved at the registered office of the company till the day of dissolution of the company.
Private company can start business only after completing this procedure but public company issues prospectus and after fulfilling minimum subscriptions.
Public company has to obtain certificate of commencement of business after obtaining the certificate of incorporation.
The procedure of the establishment of the company is lengthy. It requires consultation of experts so it is expensive also.
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