Page 208 - DMGT407Corporate and Business Laws

Lal Professional University Unit 8: Formation of a Company

Unit 8: Formation of a Company Notes

CONTENTS
Objectives
Introduction

8.1 Promotion
8.1.1 Who is a Promoter?
8.1.2 Duties and Liabilities of Promoters

8.2 Registration (Ss.12, 33)
8.2.1 Availability of Name
8.2.2 Certificate of Incorporation/Consequences of Incorporation
8.3 Floatation
8.4 Commencement of Business

8.5 Summary
8.6 Keywords
8.7 Review Questions

8.8 Further Reading
Objectives

After studying this unit, you will be able to:
Discuss about the promotion of a company;
Recognize the significance of registration;

Explain the context of flotation;
Describe the aspects concerning certificate of business.

Introduction

The whole process of formation of a company may be roughly divided, for convenience, into
four parts. These are: (i) Promotion; (ii) Registration/Incorporation, (iii) Floatation/Raising of
capital; and (iv) Commencement of business.

8.1 Promotion

Promotion is a term of wide importance denoting the preliminary steps taken for the purpose of
registration and floatation of the company. The persons who assume the task of promotion are
called promoters. The promoter may be an individual, syndicate, association, partnership or a
company.

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