question_answer 19)

Name the stages in the formation of a company.

Answer:

Formation of a company is a complex activity, involving these stages which are as follows (i) Promotion Identification of business opportunities, analysis of its prospects and initiating steps to form a company is known as promotion of a company. (ii) Incorporation Registration of company as body corporate under Companies Act, 1956 is known as incorporation. (iii) Subscription of Capital A public company's raising funds from the public by means of issue of shares and debentures is known as capital subscription. (iv) Commencement of Business The registrar issues certificate of commencement of business which is a conclusive evidence of completion of formation requirement of a company.