SummaryFormation of a company involves a lot of complex activities like getting into a lot of legal dealings and procedures. For a better understanding, we can divide the steps into four:
- Subscription of capital; and
- Commencement of business.
- Memorandum of Association
- Articles of Association
- Consent of proposed directors
- Agreement, if any, with proposed managing or whole time director
- Statutory declaration
Capital Subscription: A public company raising funds from the public needs to take following steps for fund raising:
- SEBI approval;
- File a copy of prospectus with the Registrar of Companies;
- Appointment of brokers, bankers and underwriters etc.;
- Ensure that minimum subscription is received;
- Application for listing of company's securities;
- Refund/adjust excess application money received;
- Issue allotment letters to successful applicants; and
- File return of allotment with the Registrar of Companies (ROC).
- A declaration about meeting minimum subscription requirement;
- A declaration about details in respect of allotment to directors;
- A declaration about no money being payable to applicants; and
- A statutory declaration.
The Registrar, upon satisfaction, issues Certificate of Commencement of Business. This certificate is also a conclusive evidence of completion of formation requirements.