How a new company is incorporated


This is the first stage of the company's incorporation. a group of persons agreed to start the business and form a company. These persons are known as promoters

Registration of a Company (Also called incorporation)

Since the company is an artificial perso so it cannot be made naturally. Thus companies are formed by following the procedure as prescribed in law. The process is prescribed in the Company's Act, 2013.

Firstly, the promoters should get the name of the proposed company approved from the registrar of companies. Why is this required? Simply because there can be thousands of companies but no two companies should have the same name. The job of registrar is to check if there already exist some company with the same name.If it is not there then approval for the name will be given.

Next the promoters have to submit the following documents to the registrar of companies :

  • Memorandum of Association
  • Articles of Association
  • Consent of first directors to act as directors
  • Declaration that the requirements of the Companies Act have been complied with

After the above compliance steps are completed, The registrar of companies thereafter, issues, certificate of incorporation. Now the company comes into existence.

Obtaining the certificate to Commence Business

The company should obtain certificate of commencement of business within 180 days of its incorporation.

Capital Subscription declaration

A company has to submit a declaration that every subscriber to the memorandum of Association has paid the value of their shares agreed to be taken by him.

Issuing of Prospectus

If the company wants to issue shares to the public, then it has to issue a document called prospectus. This document contains terms and conditions of the issue. And the purpose for which the proceeds of the issue of shares shall be used.

Leave a Comment

Your email address will not be published. Required fields are marked *