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Formation of a Company

CBSE · Class 11 · Business Studies

Quick revision notes for Formation of a Company — CBSE Class 11 Business Studies. Key concepts, formulas, and definitions for last-minute revision.

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Key Topics to Revise

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1. Stages in the Formation of a Company

  • Formation of a company is divided into three distinct stages: Promotion, Incorporation, and Subscription of capital.
  • Promotion is the first stage in the formation of a company.
  • Incorporation is the stage in which the company receives legal recognition.
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2. Promotion and the Role of Promoters

  • Promotion begins with conceiving a business idea and taking steps to form a company.
  • A promoter undertakes to form a company with reference to a given project, sets it going, and takes necessary steps to accomplish that purpose.
  • A promoter may be a person, a group of persons, or a company.
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3. Memorandum of Association

  • Memorandum of Association is the most important document of a company.
  • It defines the objectives of the company.
  • The company cannot legally undertake activities not contained in the Memorandum of Association.
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4. Articles of Association and Related Documents

  • Articles of Association are rules regarding internal management of a company.
  • They are subsidiary to the Memorandum of Association.
  • Articles of Association are abbreviated as AOA.

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Key Concepts

Promotion is the first stageA promoter is a personPromoters study whether a business ideaThe Memorandum of Association isThe Articles of Association contain rules

Frequently Asked Questions

What are the important topics in Formation of a Company for CBSE Class 11 Business Studies?
Formation of a Company covers several key topics that are frequently asked in CBSE Class 11 board exams. Focus on the core concepts listed on this page and practise related questions to build confidence.
How to score full marks in Formation of a Company — CBSE Class 11 Business Studies?
Understand the core concepts first, then work through the 82 practice questions available for this chapter. Revise formulas and definitions regularly, and use flashcards for quick recall before the exam.

Sources & Official References

Content is aligned to the official syllabus. Refer to the board website for the latest curriculum.

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