Formation of a Company
CBSE · Class 11 · Business Studies
Summary of Formation of a Company for CBSE Class 11 Business Studies. Key concepts, important points, and chapter overview.
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Overview
Formation of a company is the legal process by which a business idea becomes a company that can start business activity. The process is divided into three distinct stages: promotion, incorporation, and subscription of capital. Promotion begins with a business idea and the work of promoters. Incorpor
Key Concepts
Promotion is the first stage
Promotion is the first stage in company formation. It includes finding a business idea, checking whether it is technically, financially, and economica
A promoter is a person
A promoter is a person, group of persons, or company that undertakes to form a company with reference to a given project, sets it going, and takes the
Promoters study whether a business idea
Promoters study whether a business idea is technically possible, financially workable, and economically profitable. Specialists such as engineers and
The Memorandum of Association is
The Memorandum of Association is the most important document of a company. It defines the objectives of the company and states the limits within which
The Articles of Association contain rules
The Articles of Association contain rules for the internal management of the company. They are subsidiary to the Memorandum of Association and cannot
Learning Objectives
- Identify the stages in the formation of a company.
- Explain the steps involved in promotion, incorporation, and subscription of capital.
- Describe the documents submitted to the Registrar of Companies.
- Explain the need and effect of the Certificate of Incorporation and the Certificate of Commencement of Business.
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Sources & Official References
- NCERT Official — ncert.nic.in
- CBSE Academic — cbseacademic.nic.in
- CBSE Official — cbse.gov.in
- National Education Policy 2020 — education.gov.in
Content is aligned to the official syllabus. Refer to the board website for the latest curriculum.
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