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Revision Notes

Formation of a Company — Revision Notes

ICSE · Class 11 · Commerce

Formation of a Company revision notes for ICSE Class 11 Commerce: 4 topics in quick points. Part of the ICSE Class 11 Commerce syllabus.

45 questions32 flashcards5 concepts

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Key Topics to Revise

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1. Stages in the Formation of a Company

  • The formation of a Joint Stock Company in India follows the rules and guidelines of the Companies Act, 1956.
  • There are four distinct stages in formation: Promotion, Incorporation, Floatation or Capital Subscription, and Commencement of Business.
  • A private company can commence business immediately after receiving the Certificate of Incorporation.
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2. Promotion and the Promoter

  • Promotion means the process of creating a business enterprise, from idea to readiness for business.
  • C.W. Gerstenberg defined promotion as the discovery of business opportunities and the organisation of funds, property, and managerial ability into a business concern.
  • H.E. Hoagland defined promotion as the process of creating a specific business enterprise.
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3. Incorporation or Registration of a Company

  • A company is incorporated when it receives the Certificate of Incorporation from the Registrar.
  • The Certificate of Incorporation is conclusive proof that the company has been lawfully formed.
  • The Registrar of Companies issues the Certificate of Incorporation under Sec. 900 of the Companies Act, 2013.
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4. Floatation or Capital Subscription

  • Floatation or capital subscription is relevant only for a public company having share capital.
  • A company may issue a prospectus to invite the public to subscribe for shares.
  • If a public company does not issue a prospectus, it must file a statement in lieu of prospectus at least three days before the directors pass the allotment resolution.

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Key Concepts

The formation of a company hasPromotion is the process of discoveringA promoter is a personIncorporation is the registration ofThe Registrar issues this certificate after

Frequently Asked Questions

What are the important topics in Formation of a Company for ICSE Class 11 Commerce?
Key topics in Formation of a Company include Stages in the Formation of a Company, Promotion and the Promoter, Incorporation or Registration of a Company, Floatation or Capital Subscription. Study these first, then practise questions on each for Class 11 exams.
How should I revise Formation of a Company for Class 11 exams?
Learn the core ideas first, then work through the 45 practice questions on Formation of a Company. Revise 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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All ICSE Class 11 Commerce Revision Notes

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