Here students can locate TS Inter 1st Year Commerce Notes Chapter 7 Commencement of Business to prepare for their exam.
TS Inter 1st Year Commerce Notes Chapter 7 Commencement of Business
→ For the formation of any company, it is must to prepare important documents like a Memorandum of Association, Articles of Association, Prospectus, and other documents.
→ The Memorandum of Association is the constitution and character of the company. It defines the scope of the company’s activities as well as its relation with the outside world.
→ The contents of MOA are known as clauses. The clauses of MOA are name clause, situation clause, objects clause, liability clause, capital clause, and association clause.
→ The rules and regulations framed for the informal management of the company, which are set out in a document is called as “Articles of Association”. It must be printed, divided into paragraphs, numbered consecutively stamped and signed by each subscriber to MoA.
→ Prospectus is an invitation to the public to subscribe to the shares and debentures of the public company. A private company cannot issue a prospectus to secure its capital.
→ If there are any misstatements or misrepresentations in the prospectus, it gives rise to impose civil or criminal liability on : a) The company b) the Promoters and Directors c) Expert who drafted the prospectus.
→ In case a public company raises its capital through some other means (privately) there is no need to issue a prospectus, but a “Statement in lieu of prospectus” must be filed with the Registrar at least 3 days before the first allotment of shares.
→ The minimum amount of capital to be collected out of the total issue by a public company before its allotment of shares is known as “Minimum Subscription”.
→ A public company cannot commence its business unless it receives a “Certificate of Commencement of Business”. This certificate is not compulsory for a private companies.