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Formation of a Company

ICSE · Class 11 · Commerce

Complete topic list for Formation of a Company in ICSE Class 11 Commerce. Key concepts, sub-topics, and what to focus on for board exams.

45 questions32 flashcards5 concepts

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4 Topics · ICSE Class 11 Commerce

Topics in Formation of a Company

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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.

Key Concepts

Central concept: Formation of a Company

Stages in formationPromotionIncorporationFloatation or Capital SubscriptionCommencement of BusinessBasic documents of a companyMemorandum of AssociationArticles of Association

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 Flowchart showing the capital subscription process and the critical minimum subscription requirement, Flowchart comparing the commencement requirements for private versus public companies, Flowchart comparing the commencement requirements for private versus public companies. These are the concepts ICSE Class 11 examiners draw on most — study them first, then practise related questions.
How to score full marks in Formation of a Company — ICSE Class 11 Commerce?
Understand the core concepts first, then work through the 45 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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