{"id":26350,"date":"2022-12-05T12:08:28","date_gmt":"2022-12-05T06:38:28","guid":{"rendered":"https:\/\/scholarsclasses.com\/blog\/?p=26350"},"modified":"2025-12-23T18:01:15","modified_gmt":"2025-12-23T12:31:15","slug":"11th-sp-3rd-chapter-exercise","status":"publish","type":"post","link":"https:\/\/scholarsclasses.com\/blog\/11th-sp-3rd-chapter-exercise\/","title":{"rendered":"11th SP 3rd Chapter Exercise (Formation of a Company) Maharashtra Board &#8211; Free Resource"},"content":{"rendered":"\n<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_81 counter-hierarchy ez-toc-counter ez-toc-grey ez-toc-container-direction\">\n<p class=\"ez-toc-title\" style=\"cursor:inherit\">Table of Contents<\/p>\n<label for=\"ez-toc-cssicon-toggle-item-69e04e7c33405\" class=\"ez-toc-cssicon-toggle-label\"><span class=\"\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #999;color:#999\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #999;color:#999\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/label><input type=\"checkbox\"  id=\"ez-toc-cssicon-toggle-item-69e04e7c33405\"  aria-label=\"Toggle\" \/><nav><ul class='ez-toc-list ez-toc-list-level-1 ' ><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/scholarsclasses.com\/blog\/11th-sp-3rd-chapter-exercise\/#11th_SP_3rd_Chapter_Exercise\" >11th SP 3rd Chapter Exercise<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/scholarsclasses.com\/blog\/11th-sp-3rd-chapter-exercise\/#Chapter_3_%E2%80%93_Formation_of_a_Company\" >Chapter 3 &#8211; Formation of a Company<\/a><ul class='ez-toc-list-level-3' ><li class='ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-3\" href=\"https:\/\/scholarsclasses.com\/blog\/11th-sp-3rd-chapter-exercise\/#Q1_A_Select_the_correct_option_and_rewrite_the_sentences\" >Q.1 (A) Select the correct option and rewrite the sentences.<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-4\" href=\"https:\/\/scholarsclasses.com\/blog\/11th-sp-3rd-chapter-exercise\/#Q1_B_Match_the_pairs\" >Q.1 (B) Match the pairs.<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-5\" href=\"https:\/\/scholarsclasses.com\/blog\/11th-sp-3rd-chapter-exercise\/#Q1_C_Give_one_wordphraseterm_for_the_following_statements\" >Q.1 (C) Give one word\/phrase\/term for the following statements.<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-6\" href=\"https:\/\/scholarsclasses.com\/blog\/11th-sp-3rd-chapter-exercise\/#Q1_D_State_True_or_False\" >Q.1 (D) State True or False.<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-7\" href=\"https:\/\/scholarsclasses.com\/blog\/11th-sp-3rd-chapter-exercise\/#Q1_E_Find_the_odd_one\" >Q.1 (E) Find the odd one.<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-8\" href=\"https:\/\/scholarsclasses.com\/blog\/11th-sp-3rd-chapter-exercise\/#Q1_F_Complete_the_sentences\" >Q.1 (F) Complete the sentences.<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-9\" href=\"https:\/\/scholarsclasses.com\/blog\/11th-sp-3rd-chapter-exercise\/#Q1_G_Complete_the_following_table\" >Q.1 (G) Complete the following table.<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-10\" href=\"https:\/\/scholarsclasses.com\/blog\/11th-sp-3rd-chapter-exercise\/#Q1_H_Answer_in_one_sentence\" >Q.1 (H) Answer in one sentence.<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-11\" href=\"https:\/\/scholarsclasses.com\/blog\/11th-sp-3rd-chapter-exercise\/#Q1I_Correct_the_underlined_word_and_rewrite_the_following_sentences\" >Q.1(I) Correct the underlined word and rewrite the following sentences.<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-12\" href=\"https:\/\/scholarsclasses.com\/blog\/11th-sp-3rd-chapter-exercise\/#Q1J_Arrange_in_proper_order\" >Q.1(J) Arrange in proper order<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-13\" href=\"https:\/\/scholarsclasses.com\/blog\/11th-sp-3rd-chapter-exercise\/#Q2_Explain_the_following_termsconcepts\" >Q.2 Explain the following terms\/concepts.<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-14\" href=\"https:\/\/scholarsclasses.com\/blog\/11th-sp-3rd-chapter-exercise\/#Q3_Study_the_following_casesituation_and_express_your_opinion\" >Q.3 Study the following case\/situation and express your opinion.<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-15\" href=\"https:\/\/scholarsclasses.com\/blog\/11th-sp-3rd-chapter-exercise\/#Q4_Answer_in_brief\" >Q.4 Answer in brief.<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-16\" href=\"https:\/\/scholarsclasses.com\/blog\/11th-sp-3rd-chapter-exercise\/#Q5_Justify_the_following_statements\" >Q.5 Justify the following statements.<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-17\" href=\"https:\/\/scholarsclasses.com\/blog\/11th-sp-3rd-chapter-exercise\/#Q6_Answer_the_following_questions\" >Q.6 Answer the following questions<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-18\" href=\"https:\/\/scholarsclasses.com\/blog\/11th-sp-3rd-chapter-exercise\/#11th_SP_Textbook_Solutions\" >11th SP Textbook Solutions<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-19\" href=\"https:\/\/scholarsclasses.com\/blog\/11th-sp-3rd-chapter-exercise\/#Check_out_other_posts_related_to_11th_Commerce\" >Check out other posts related to 11th Commerce<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-20\" href=\"https:\/\/scholarsclasses.com\/blog\/11th-sp-3rd-chapter-exercise\/#Online_lectures_of_Class_12_Commerce\" >Online lectures of Class 12 Commerce<\/a><\/li><\/ul><\/li><\/ul><\/nav><\/div>\n<h2 class=\"wp-block-heading has-text-align-center\"><span class=\"ez-toc-section\" id=\"11th_SP_3rd_Chapter_Exercise\"><\/span>11th SP 3rd Chapter Exercise<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<figure class=\"wp-block-image size-large\"><img decoding=\"async\" width=\"1024\" height=\"576\" data-src=\"https:\/\/scholarsclasses.com\/blog\/wp-content\/uploads\/2022\/12\/11th-SP-3rd-Chapter-Exercise-1024x576.webp\" alt=\"11th SP 3rd Chapter Exercise\" class=\"wp-image-26462 lazyload\" title=\"\" data-srcset=\"https:\/\/scholarsclasses.com\/blog\/wp-content\/uploads\/2022\/12\/11th-SP-3rd-Chapter-Exercise-1024x576.webp 1024w, https:\/\/scholarsclasses.com\/blog\/wp-content\/uploads\/2022\/12\/11th-SP-3rd-Chapter-Exercise-300x169.webp 300w, https:\/\/scholarsclasses.com\/blog\/wp-content\/uploads\/2022\/12\/11th-SP-3rd-Chapter-Exercise-768x432.webp 768w, https:\/\/scholarsclasses.com\/blog\/wp-content\/uploads\/2022\/12\/11th-SP-3rd-Chapter-Exercise.webp 1280w\" data-sizes=\"(max-width: 1024px) 100vw, 1024px\" src=\"data:image\/svg+xml;base64,PHN2ZyB3aWR0aD0iMSIgaGVpZ2h0PSIxIiB4bWxucz0iaHR0cDovL3d3dy53My5vcmcvMjAwMC9zdmciPjwvc3ZnPg==\" style=\"--smush-placeholder-width: 1024px; --smush-placeholder-aspect-ratio: 1024\/576;\" \/><figcaption class=\"wp-element-caption\">11th SP 3rd Chapter Exercise<\/figcaption><\/figure>\n\n\n\n<h2 class=\"wp-block-heading has-text-align-center has-black-color has-vivid-green-cyan-background-color has-text-color has-background has-medium-font-size\"><span class=\"ez-toc-section\" id=\"Chapter_3_%E2%80%93_Formation_of_a_Company\"><\/span><strong>Chapter 3 &#8211; <strong><strong>Formation of a Company<\/strong><\/strong><\/strong><span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<h3 class=\"wp-block-heading has-text-align-center has-cyan-bluish-gray-background-color has-background\"><span class=\"ez-toc-section\" id=\"Q1_A_Select_the_correct_option_and_rewrite_the_sentences\"><\/span>Q.1 (A) Select the correct option and rewrite the sentences.<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p>1) A company is \u2026\u2026\u2026\u2026.. .<br>a) a human being <br><strong><mark style=\"background-color:rgba(0, 0, 0, 0)\" class=\"has-inline-color has-accent-2-color\">b) an artificial person created by law <br><\/mark><\/strong>c) a natural individual<\/p>\n\n\n\n<p>2) \u2026\u2026\u2026\u2026\u2026 are the persons who undertake the process of formation of a company.<br><strong><mark style=\"background-color:rgba(0, 0, 0, 0)\" class=\"has-inline-color has-accent-2-color\">a) Promoters <br><\/mark><\/strong>b) Directors <br>c) Registrar of companies<\/p>\n\n\n\n<p>3) A \u2026\u2026\u2026\u2026.. company needs minimum two or more members.<br>a) Public <br><strong><mark style=\"background-color:rgba(0, 0, 0, 0)\" class=\"has-inline-color has-accent-2-color\">b) Private <br><\/mark><\/strong>c) One person Company<\/p>\n\n\n\n<p>4) In a public company there must be minimum \u2026\u2026\u2026\u2026\u2026 or more members.<br>a) one <br>b) two <br><strong><mark style=\"background-color:rgba(0, 0, 0, 0)\" class=\"has-inline-color has-accent-2-color\">c) seven<\/mark><\/strong><\/p>\n\n\n\n<p>5) \u2026\u2026\u2026\u2026 refers to contracts entered into by the promoters on behalf of a proposed company.<br><strong><mark style=\"background-color:rgba(0, 0, 0, 0)\" class=\"has-inline-color has-accent-2-color\">a) Pre-incorporation\/Preliminary contracts <br><\/mark><\/strong>b) Fiduciary contracts<br>c) Memorandum of Association<\/p>\n\n\n\n<p>6) A Director must have a \u2026\u2026\u2026\u2026. to be appointed as a Director of a company.<br>a) PAN <br><strong><mark style=\"background-color:rgba(0, 0, 0, 0)\" class=\"has-inline-color has-accent-2-color\">b) DIN <br><\/mark><\/strong>c) CIN<\/p>\n\n\n\n<p>7) \u2026\u2026.. has 21 digit alpha-numeric code which is a unique number assigned to every company at the time of Incorporation.<br>a) DIN <br>b) PIN <br><strong><mark style=\"background-color:rgba(0, 0, 0, 0)\" class=\"has-inline-color has-accent-2-color\">c) CIN<\/mark><\/strong><\/p>\n\n\n\n<p>8) \u2026\u2026\u2026.. is a document which invites the public to buy the shares of a company.<br>a) Articles of Association <br><strong><mark style=\"background-color:rgba(0, 0, 0, 0)\" class=\"has-inline-color has-accent-2-color\">b) Prospectus <br><\/mark><\/strong>c) Certificate of Incorporation.<\/p>\n\n\n\n<h3 class=\"wp-block-heading has-text-align-center has-cyan-bluish-gray-background-color has-background\"><span class=\"ez-toc-section\" id=\"Q1_B_Match_the_pairs\"><\/span>Q.1 (B) Match the pairs.<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<figure class=\"wp-block-table\"><table><tbody><tr><td class=\"has-text-align-center\" data-align=\"center\"><strong>Group A<\/strong><\/td><td class=\"has-text-align-center\" data-align=\"center\"><strong>Group B<\/strong><\/td><\/tr><tr><td class=\"has-text-align-center\" data-align=\"center\">a) Minimum 7 members<\/td><td class=\"has-text-align-center\" data-align=\"center\">1) Persons who conceive idea of setting up a<br>company<\/td><\/tr><tr><td class=\"has-text-align-center\" data-align=\"center\">b) DIN<\/td><td class=\"has-text-align-center\" data-align=\"center\">2) Public Company<\/td><\/tr><tr><td class=\"has-text-align-center\" data-align=\"center\">c) Preliminary contracts<\/td><td class=\"has-text-align-center\" data-align=\"center\">3) Promoters<\/td><\/tr><tr><td class=\"has-text-align-center\" data-align=\"center\">d) Fiduciary duties towards the company<\/td><td class=\"has-text-align-center\" data-align=\"center\">4) Nine Digit alphanumeric number<\/td><\/tr><tr><td class=\"has-text-align-center\" data-align=\"center\">e) CIN<\/td><td class=\"has-text-align-center\" data-align=\"center\">5) Private company<\/td><\/tr><tr><td class=\"has-text-align-center\" data-align=\"center\"><\/td><td class=\"has-text-align-center\" data-align=\"center\">6) Unique number assigned to each Director<\/td><\/tr><tr><td class=\"has-text-align-center\" data-align=\"center\"><\/td><td class=\"has-text-align-center\" data-align=\"center\">7) ROC<\/td><\/tr><tr><td class=\"has-text-align-center\" data-align=\"center\"><\/td><td class=\"has-text-align-center\" data-align=\"center\">8) 21-digit alphanumeric code number<\/td><\/tr><tr><td class=\"has-text-align-center\" data-align=\"center\"><\/td><td class=\"has-text-align-center\" data-align=\"center\">9) One Person Company<\/td><\/tr><tr><td class=\"has-text-align-center\" data-align=\"center\"><\/td><td class=\"has-text-align-center\" data-align=\"center\">10) Contracts entered by Promoters with third<br>parties<\/td><\/tr><\/tbody><\/table><\/figure>\n\n\n\n<p>Answers.   <br>a. 2) Public Company<br>b. 6) Unique number assigned to each Director<br>c. 10) Contracts entered by Promoters with third parties<br>d. 3) Promoters<br>e. 8) 21-digit alphanumeric code number<\/p>\n\n\n\n<h3 class=\"wp-block-heading has-text-align-center has-cyan-bluish-gray-background-color has-background\"><span class=\"ez-toc-section\" id=\"Q1_C_Give_one_wordphraseterm_for_the_following_statements\"><\/span>Q.1 (C) Give one word\/phrase\/term for the following statements.<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p>1) Term which means registering a company as per provisions of Companies Act, 2013.<br><strong>Answer: Incorporation<\/strong><\/p>\n\n\n\n<p>2) Persons who undertake the necessary steps to set up a company.<br><strong>Answer: Promoters<\/strong><\/p>\n\n\n\n<p>3) Term which refers to contracts entered into by Promoters with third parties on behalf of the proposed company.<br><strong>Answer: Preliminary contracts<\/strong><\/p>\n\n\n\n<p>4) The Birth Certificate of a company.<br><strong>Answer: Certificate of Incorporation<\/strong><\/p>\n\n\n\n<h3 class=\"wp-block-heading has-text-align-center has-cyan-bluish-gray-background-color has-background\"><span class=\"ez-toc-section\" id=\"Q1_D_State_True_or_False\"><\/span>Q.1 (D) State True or False.<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p>1) A company is an artificial person. <strong>(True)<\/strong><\/p>\n\n\n\n<p>2) To form a Public company, there must be minimum 2 persons\/promoters. <strong>(False)<\/strong><\/p>\n\n\n\n<p>3) Promoters are persons who take the necessary steps to set up a company. <strong>(True)<\/strong><\/p>\n\n\n\n<p>4) Promoters can make secret profits while setting up a company. <strong>(<strong>False<\/strong>)<\/strong><\/p>\n\n\n\n<p>5) In India companies have to be incorporated as per the provisions of Companies Act, 2013. <strong>(<strong>False<\/strong>)<\/strong><\/p>\n\n\n\n<p>6) DSC is needed by Directors when they have to sign documents for e-filing. <strong>(<strong>False<\/strong>)<\/strong><\/p>\n\n\n\n<p>7) A company can be registered even without submitting Memorandum of Association and Articles of Association. <strong>(<strong>False<\/strong>)<\/strong><\/p>\n\n\n\n<p>8) Every Director has to quote his DIN while giving his consent to be a Director of a company. <strong>(True)<\/strong><\/p>\n\n\n\n<p>9) ROC issues CIN only to certain companies. <strong>(<strong>False<\/strong>)<\/strong><\/p>\n\n\n\n<p>10) All companies need Certificate of Incorporation. <strong>(True)<\/strong><\/p>\n\n\n\n<p>11) All companies need Certificate of Commencement of business. <strong>(<strong>False<\/strong>)<\/strong><\/p>\n\n\n\n<h3 class=\"wp-block-heading has-text-align-center has-cyan-bluish-gray-background-color has-background\"><span class=\"ez-toc-section\" id=\"Q1_E_Find_the_odd_one\"><\/span>Q.1 (E) Find the odd one.<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p>1) CIN, DIN, <strong>PAN<\/strong><\/p>\n\n\n\n<p>2) Promotion, <strong>Prospectus<\/strong>, Incorporation of a company<\/p>\n\n\n\n<h3 class=\"wp-block-heading has-text-align-center has-cyan-bluish-gray-background-color has-background\"><span class=\"ez-toc-section\" id=\"Q1_F_Complete_the_sentences\"><\/span>Q.1 (F) Complete the sentences.<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p>1) Promoters are the persons who undertake the process of <strong><span style=\"text-decoration: underline;\">Formation of a company<\/span>.<\/strong><\/p>\n\n\n\n<p>2) The document issued by the Registrar of companies when a company is incorporated is called as <strong><span style=\"text-decoration: underline;\">Certificatie of Incorporation<\/span><\/strong>.<\/p>\n\n\n\n<p>3) On incorporation of a company the ROC allots a unique identity number called as <strong><span style=\"text-decoration: underline;\">Corporate Identity Number\/CIN.<\/span><\/strong><\/p>\n\n\n\n<p>4) On behalf of a proposed company, preliminary contracts with third parties are entered by <strong><span style=\"text-decoration: underline;\">Promoters<\/span><\/strong>.<\/p>\n\n\n\n<h3 class=\"wp-block-heading has-text-align-center has-cyan-bluish-gray-background-color has-background\"><span class=\"ez-toc-section\" id=\"Q1_G_Complete_the_following_table\"><\/span>Q.1 (G) Complete the following table.<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<figure class=\"wp-block-table\"><table><tbody><tr><td class=\"has-text-align-center\" data-align=\"center\"><strong>Group A&nbsp;<\/strong><\/td><td class=\"has-text-align-center\" data-align=\"center\"><strong>Group B<\/strong><\/td><\/tr><tr><td class=\"has-text-align-center\" data-align=\"center\">1) Promoter<\/td><td class=\"has-text-align-center\" data-align=\"center\"><strong><span style=\"text-decoration: underline;\">Formation of a company<\/span><\/strong><\/td><\/tr><tr><td class=\"has-text-align-center\" data-align=\"center\">2) <strong><span style=\"text-decoration: underline;\">Birth Certificate of a company<\/span><\/strong><\/td><td class=\"has-text-align-center\" data-align=\"center\">Certificate of Incorporation<\/td><\/tr><tr><td class=\"has-text-align-center\" data-align=\"center\">3) CIN<\/td><td class=\"has-text-align-center\" data-align=\"center\"><strong><span style=\"text-decoration: underline;\">Corporate Identity Number<\/span><\/strong><\/td><\/tr><tr><td class=\"has-text-align-center\" data-align=\"center\">4) RUN is used for <\/td><td class=\"has-text-align-center\" data-align=\"center\"><strong><span style=\"text-decoration: underline;\">Reserving name of a company<\/span><\/strong><\/td><\/tr><\/tbody><\/table><\/figure>\n\n\n\n<h3 class=\"wp-block-heading has-text-align-center has-cyan-bluish-gray-background-color has-background\"><span class=\"ez-toc-section\" id=\"Q1_H_Answer_in_one_sentence\"><\/span>Q.1 (H) Answer in one sentence.<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p><strong>1) Who is a Promoter?<\/strong><br><strong>Answer:<\/strong> The Persons who undertake the process of promotion of a company are called as \u2018Promoters\u2019. A promoter can be an individual, a partner, a company, an association or a syndicate.<\/p>\n\n\n\n<p><strong>2) What is CIN?<\/strong><br><strong>Answer:<\/strong> CIN is a 21 digit alpha numeric code and is to be quoted in every form and correspondence that the company uses.<\/p>\n\n\n\n<p><strong>3) Which company needs Certificate of Commencement of Business?<\/strong><br><strong>Answer:<\/strong> A Public Limited Company needs Certificate of Commencement of Business.<\/p>\n\n\n\n<p><strong>4) What are Preliminary Contracts?<\/strong><br><strong>Answer:<\/strong> Preliminary contracts are the contracts which are entered into by the promoters on behalf of the company before its incorporation with third Parties.<\/p>\n\n\n\n<h3 class=\"wp-block-heading has-text-align-center has-cyan-bluish-gray-background-color has-background\"><span class=\"ez-toc-section\" id=\"Q1I_Correct_the_underlined_word_and_rewrite_the_following_sentences\"><\/span>Q.1(I) Correct the underlined word and rewrite the following sentences.<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p>1) <span style=\"text-decoration: underline;\">ROC<\/span> prepares draft Memorandum and Articles of Association.<br><strong>Answer:<\/strong> Promoters<\/p>\n\n\n\n<p>2) <span style=\"text-decoration: underline;\">Certificate of Commencement of Business<\/span> is like a birth certificate of a company<br><strong>Answer:<\/strong> Certificate of Incorporation<\/p>\n\n\n\n<h3 class=\"wp-block-heading has-text-align-center has-cyan-bluish-gray-background-color has-background\"><span class=\"ez-toc-section\" id=\"Q1J_Arrange_in_proper_order\"><\/span>Q.1(J) Arrange in proper order<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p><strong>1) <br><\/strong>a) Appoint First Directors<br>b) Prepare Draft Memorandum of Association and Articles of Association.<br>c) Come up with business idea<\/p>\n\n\n\n<p><strong>Answer:<\/strong><br>a) Come up with business idea<br>b) Prepare draft M\/A and A\/A<br>c) Appoint first Directors<\/p>\n\n\n\n<p><strong>2) <br><\/strong>a) Incorporation of a company<br>b) Commencement of a company<br>c) Promotion<\/p>\n\n\n\n<p><strong>Answer:<\/strong><br>a) Promotion<br>b) Incorporation of a Co.<br>c) Commencement of Business<\/p>\n\n\n\n<h3 class=\"wp-block-heading has-text-align-center has-cyan-bluish-gray-background-color has-background\"><span class=\"ez-toc-section\" id=\"Q2_Explain_the_following_termsconcepts\"><\/span>Q.2 Explain the following terms\/concepts.<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p><strong><mark style=\"background-color:rgba(0, 0, 0, 0)\" class=\"has-inline-color has-vivid-purple-color\">1) Promoters<\/mark><\/strong><br><strong>Answer:<\/strong><br>a) The Persons who undertake the process of promotion of a company are called as \u2018Promoters\u2019.<br>b) Promoters are the ones who come up with the idea of starting a business.<br>c) A promoter can be an individual, a partner, a company, an association, or a syndicate.<br>d) They prepare the various documents needed for incorporation of a company like Memorandum and Articles of Association.<\/p>\n\n\n\n<p><mark style=\"background-color:rgba(0, 0, 0, 0)\" class=\"has-inline-color has-vivid-purple-color\"><strong>2) Promotion<\/strong><\/mark><br><strong>Answer: <\/strong>Where promoters, the ones who want to form a company, take the necessary steps to incorporate a company.<\/p>\n\n\n\n<p>Promotion of a company means taking all the necessary steps to incorporate a company as per the provisions of the Companies Act, 2013.<\/p>\n\n\n\n<p><strong><mark style=\"background-color:rgba(0, 0, 0, 0)\" class=\"has-inline-color has-vivid-purple-color\">3) Certificate of Incorporation<\/mark><\/strong><br><strong>Answer:<\/strong> A certificate that is issued by the Registrar of Companies after its registration, signifying the birth of the company, is called the Certificate of Incorporation.<br>It is required to be obtained by all companies i.e. Public Limited companies as well as Private Limited companies.<\/p>\n\n\n\n<p>The certificate of Incorporation contains:<\/p>\n\n\n\n<p>(a) the name of the company<br>(b) the date of issue<br>(c) Corporate Identity Number to indicate whether a company is listed or unlisted, industry code, state of its location, year of incorporation, ownership type and registration number.<br>(d) Permanent Account Number (PAN) and Tax Deduction and Collection Account Number of the company.<br>(e) Signature of Registrar with the date and his seal.<\/p>\n\n\n\n<p><mark style=\"background-color:rgba(0, 0, 0, 0)\" class=\"has-inline-color has-vivid-purple-color\"><strong>4) SPICe<\/strong><\/mark><br><strong>Answer:<\/strong> Rule 38 of Companies (Incorporation) (Fourth Amendment) Rules has introduced, with effect from 2.10.2016, a simplified integrated process for the incorporation of a company. Under this, only one form-Form INC-32 (SPICe), needs to be submitted at the time of incorporation of a company.<\/p>\n\n\n\n<p>SPICe is to be filed for applying for:<br>i) Reservation of Name of Company<br>ii) Incorporation of a new company<br>iii) DIN for Directors<br>iv) PAN and TAN for a new company<\/p>\n\n\n\n<p><mark style=\"background-color:rgba(0, 0, 0, 0)\" class=\"has-inline-color has-vivid-purple-color\"><strong>5) CIN<\/strong><\/mark><br><strong>Answer:<\/strong> Corporate Identity Number \u2013 issued by ROC at the time of incorporation of a Company. It indicates whether a company is listed or unlisted, Industry code, state of its location, year of incorporation, ownership type and registration number.<br>E.g., CIN. of Air India Ltd. &#8211; U62100DL 1992GOI048581<\/p>\n\n\n\n<p>At the time of issuing a Certificate of Incorporation the ROC also allots a CIN to the Company which is its unique identity number. CIN is a 21 digit alpha-numeric code and is to be quoted in every form and correspondence that the company uses.<\/p>\n\n\n\n<p class=\"has-text-align-center\"><strong><a href=\"https:\/\/scholarsclasses.com\/blog\/11th-commerce-notes-maharashtra-board\/\" data-type=\"URL\" data-id=\"https:\/\/scholarsclasses.com\/blog\/11th-commerce-notes-maharashtra-board\/\" target=\"_blank\" rel=\"noreferrer noopener\">Solution of other subjects<\/a> <br><a href=\"https:\/\/scholarsclasses.com\/blog\/11th-sp-textbook-solutions\/\" data-type=\"URL\" data-id=\"https:\/\/scholarsclasses.com\/blog\/11th-sp-textbook-solutions\/\">Solution of all Chapters of SP <br><\/a> <a href=\"https:\/\/scholarsclasses.com\/blog\/11th-sp-1st-chapter-exercise\/\" data-type=\"link\" data-id=\"https:\/\/scholarsclasses.com\/blog\/11th-sp-1st-chapter-exercise\/\">1<\/a> &#8211; <a href=\"https:\/\/scholarsclasses.com\/blog\/11th-sp-2nd-chapter-exercise\/\" data-type=\"URL\" data-id=\"https:\/\/scholarsclasses.com\/blog\/11th-sp-2nd-chapter-exercise\/\">2<\/a> &#8211; <a href=\"https:\/\/scholarsclasses.com\/blog\/11th-sp-chapter-4-exercise\/\">4<\/a> &#8211; <a href=\"https:\/\/scholarsclasses.com\/blog\/11th-sp-chapter-5-exercise\/\" data-type=\"URL\" data-id=\"https:\/\/scholarsclasses.com\/blog\/11th-sp-chapter-5-exercise\/\">5<\/a> &#8211; <a href=\"https:\/\/scholarsclasses.com\/blog\/11th-sp-chapter-6-exercise\/\" data-type=\"link\" data-id=\"https:\/\/scholarsclasses.com\/blog\/11th-sp-chapter-6-exercise\/\">6<\/a> &#8211; 7 &#8211; 8 &#8211; 9 &#8211; 10 &#8211; 11 &#8211; 12<\/strong><\/p>\n\n\n\n<h3 class=\"wp-block-heading has-text-align-center has-cyan-bluish-gray-background-color has-background\"><span class=\"ez-toc-section\" id=\"Q3_Study_the_following_casesituation_and_express_your_opinion\"><\/span>Q.3 Study the following case\/situation and express your opinion.<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p><mark style=\"background-color:rgba(0, 0, 0, 0)\" class=\"has-inline-color has-accent-2-color\">1) Mr. Ram, Mr. Sam and Mr. Tom who are partners have come together to convert their business into a company. They have finalized all the details about the business they want to do, capital needed, etc. However, they do not know how to proceed with the legal formalities. Hence they appoint Mr. Shah who is a Practicing Company Secretary to help them prepare documents needed for incorporating the proposed company.<\/mark><\/p>\n\n\n\n<p><strong>Questions:<\/strong><\/p>\n\n\n\n<p>a) Can Mr. Ram, Mr. Sam and Mr. Tom convert their partnership firm into a company?<br>b) Name 2 most important documents needed to incorporate a company.<br>c) Will Mr. Shah be considered as a Promoter of the Company? Why?<\/p>\n\n\n\n<p><strong>Solution:<\/strong><br>a) Mr. Ram, Mr. Sam and Mr. Tom can convert their partnership firm into a company. They can convert their partnership firm into a Private Company as it needs a minimum of 2  promoters\/persons.<br>b) Memorandum of Association and Articles of Association are the 2 most important documents needed to incorporate a company.<br>c) Mr. Shah will not be considered as promoter of the company. This is because Mr. Shah Who is a practicing Company Secretary only assists the partners in completing the legal formalities in a professional capacity.<\/p>\n\n\n\n<p><mark style=\"background-color:rgba(0, 0, 0, 0)\" class=\"has-inline-color has-accent-2-color\">2) Mr. T along with his 5 friends have submitted all the necessary documents for incorporation<br>of TRIM private limited company.<\/mark><\/p>\n\n\n\n<p>a) How many minimum promoters are needed to incorporate a private company?<br>b) When can TRIM Private limited company be said to have come into existence?<br>c) Name the two most important documents that must be submitted at the time of<br>Incorporation of a company.<\/p>\n\n\n\n<p><strong>Solution:<\/strong><br>a) A minimum 2 promoters are needed to incorporate a private company.<br>b) When Registrar of Companies (ROC) issues a certificate of incorporation to TRIM private Limited company, it is said to have come into existence.<br>c) The two most important documents i.e Memorandum of Association and Articles of Association must be submitted to the Registrar of Companies (ROC) at the time of incorporation of a company.<\/p>\n\n\n\n<p><mark style=\"background-color:rgba(0, 0, 0, 0)\" class=\"has-inline-color has-accent-2-color\">3) Sagar company limited got its Certificate of Incorporation on 1st Sept. 2018. The application<br>for Incorporation was submitted on 16th Aug. 2018. There were 10 promoters who took the steps to incorporate the company.<\/mark><\/p>\n\n\n\n<p>a) State the date on which Sagar company limited came into existence legally?<br>b) On which date will the company get its Corporate Identity Number?<br>c) How many minimum promoters are needed for incorporating a public company?<\/p>\n\n\n\n<p><strong>Solution:<\/strong><br>a) On 1st September, 2018, Sagar Company Limited comes into existence legally.<br>b) On 1st September, 2018, the Sagar Company Limited will get its Corporate Identity Number (CIN).<br>c) Minimum 7 promoters are needed for incorporating a public company.<\/p>\n\n\n\n<h3 class=\"wp-block-heading has-text-align-center has-cyan-bluish-gray-background-color has-background\"><span class=\"ez-toc-section\" id=\"Q4_Answer_in_brief\"><\/span>Q.4 Answer in brief.<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p><strong><mark style=\"background-color:rgba(0, 0, 0, 0)\" class=\"has-inline-color has-accent-2-color\">1) State the contents of the Certificate of Incorporation<\/mark><\/strong>.<\/p>\n\n\n\n<p><strong>Answer:<\/strong> <br>After verifying that all the documents and information submitted to it is proper, the Registrar<br>of Companies will enter the name of the company in the Register of Companies and certifies under his hand that the company is incorporated. Registrar issues the Certificate of Incorporation in the prescribed form.<\/p>\n\n\n\n<p><strong>Contents of Certificate of Incorporation:<br><\/strong>i) the name of the company.<br>ii) date of issue of Certificate of Incorporation.<br>iii) CIN.<br>iv) PAN and TAN of the company.<br>v) Signature of Registrar with date and his seal.<\/p>\n\n\n\n<p><strong><mark style=\"background-color:rgba(0, 0, 0, 0)\" class=\"has-inline-color has-accent-2-color\">2) State the importance of Certificate of Incorporation<\/mark>.<\/strong><\/p>\n\n\n\n<p><strong>Answer:<\/strong> <br><strong><strong>Importance of Certificate of Incorporation:<\/strong><\/strong><\/p>\n\n\n\n<p>i) Certificate of Incorporation is like the Birth Certificate of the Company as the company comes<br>into existence from the date mentioned in the certificate.<br>ii) The Company now becomes a legal person distinct from its members.<br>iii) Company becomes a body corporate having perpetual succession from the date of its<br>incorporation<br>iv) The company can sue and be sued upon others in its own name.<\/p>\n\n\n\n<p><strong><mark style=\"background-color:rgba(0, 0, 0, 0)\" class=\"has-inline-color has-accent-2-color\">3) Write a note on &#8211; Role of Promoter.<\/mark><\/strong><\/p>\n\n\n\n<p> <strong style=\"color: initial;\">Answer:<\/strong><br><strong>Role of Promoters:<\/strong><\/p>\n\n\n\n<p>i) Promoters are the ones who come up with the idea of starting a business.<br>ii) They decide the objects of the business, amount of capital needed, scale of business operation etc.<br>iii) They prepare the various documents needed for incorporation of a company like Memorandum and Articles of Association.<br>iv) Approach investors for collecting capital for the company.<br>v) Promoters often nominate themselves as first directors of the company and are first subscribers to Memorandum and Articles of Association.<br>vi) The promoters can enter into contracts with third parties on behalf of the proposed company.<\/p>\n\n\n\n<p>These contracts are called as \u2018Pre-incorporation contracts\u2019 or \u2018Preliminary Contracts\u2019. For e.g..<br>Contracts for preparing and printing Memorandum and Articles of Association, hiring office<br>premises, etc.<br>vii) Promoters have fiduciary duties towards the company they are setting up. They are supposed to act in such a manner so as to protect and promote the interest of the proposed company . They cannot make any secret profits while promoting a company.<\/p>\n\n\n\n<p><strong><mark style=\"background-color:rgba(0, 0, 0, 0)\" class=\"has-inline-color has-accent-2-color\">4) Draw and explain the flow chart of steps in promotion of a company.<\/mark><\/strong><\/p>\n\n\n\n<p> <strong style=\"color: initial;\">Answer:<\/strong><\/p>\n\n\n\n<figure class=\"wp-block-image size-large\"><img decoding=\"async\" width=\"1024\" height=\"623\" data-src=\"https:\/\/scholarsclasses.com\/blog\/wp-content\/uploads\/2022\/12\/Steps-in-Promotion-of-a-company-1024x623.png\" alt=\"Steps in Promotion of a company\" class=\"wp-image-26445 lazyload\" title=\"\" data-srcset=\"https:\/\/scholarsclasses.com\/blog\/wp-content\/uploads\/2022\/12\/Steps-in-Promotion-of-a-company-1024x623.png 1024w, https:\/\/scholarsclasses.com\/blog\/wp-content\/uploads\/2022\/12\/Steps-in-Promotion-of-a-company-300x182.png 300w, https:\/\/scholarsclasses.com\/blog\/wp-content\/uploads\/2022\/12\/Steps-in-Promotion-of-a-company-768x467.png 768w, https:\/\/scholarsclasses.com\/blog\/wp-content\/uploads\/2022\/12\/Steps-in-Promotion-of-a-company.png 1378w\" data-sizes=\"(max-width: 1024px) 100vw, 1024px\" src=\"data:image\/svg+xml;base64,PHN2ZyB3aWR0aD0iMSIgaGVpZ2h0PSIxIiB4bWxucz0iaHR0cDovL3d3dy53My5vcmcvMjAwMC9zdmciPjwvc3ZnPg==\" style=\"--smush-placeholder-width: 1024px; --smush-placeholder-aspect-ratio: 1024\/623;\" \/><\/figure>\n\n\n\n<p class=\"has-text-align-center\"><strong><a href=\"https:\/\/scholarsclasses.com\/blog\/11th-commerce-notes-maharashtra-board\/\" data-type=\"URL\" data-id=\"https:\/\/scholarsclasses.com\/blog\/11th-commerce-notes-maharashtra-board\/\" target=\"_blank\" rel=\"noreferrer noopener\">Solution of other subjects<\/a> <br><a href=\"https:\/\/scholarsclasses.com\/blog\/11th-sp-textbook-solutions\/\" data-type=\"URL\" data-id=\"https:\/\/scholarsclasses.com\/blog\/11th-sp-textbook-solutions\/\">Solution of all Chapters of SP <br><\/a> <a href=\"https:\/\/scholarsclasses.com\/blog\/11th-sp-1st-chapter-exercise\/\" data-type=\"link\" data-id=\"https:\/\/scholarsclasses.com\/blog\/11th-sp-1st-chapter-exercise\/\">1<\/a> &#8211; <a href=\"https:\/\/scholarsclasses.com\/blog\/11th-sp-2nd-chapter-exercise\/\" data-type=\"URL\" data-id=\"https:\/\/scholarsclasses.com\/blog\/11th-sp-2nd-chapter-exercise\/\">2<\/a> &#8211; <a href=\"https:\/\/scholarsclasses.com\/blog\/11th-sp-chapter-4-exercise\/\">4<\/a> &#8211; <a href=\"https:\/\/scholarsclasses.com\/blog\/11th-sp-chapter-5-exercise\/\" data-type=\"URL\" data-id=\"https:\/\/scholarsclasses.com\/blog\/11th-sp-chapter-5-exercise\/\">5<\/a> &#8211; <a href=\"https:\/\/scholarsclasses.com\/blog\/11th-sp-chapter-6-exercise\/\" data-type=\"link\" data-id=\"https:\/\/scholarsclasses.com\/blog\/11th-sp-chapter-6-exercise\/\">6<\/a> &#8211; 7 &#8211; 8 &#8211; 9 &#8211; 10 &#8211; 11 &#8211; 12<\/strong><\/p>\n\n\n\n<h3 class=\"wp-block-heading has-text-align-center has-cyan-bluish-gray-background-color has-background\"><span class=\"ez-toc-section\" id=\"Q5_Justify_the_following_statements\"><\/span>Q.5 Justify the following statements.<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p><mark style=\"background-color:rgba(0, 0, 0, 0)\" class=\"has-inline-color has-vivid-purple-color\"><strong>1) Certificate of Incorporation is like a Birth Certificate of a company.<\/strong><\/mark><\/p>\n\n\n\n<p><strong>Answer:<\/strong> <br>a) a certificate in the prescribed form issued by the Registrar of Companies to the company after its registration, signifying its birth is called the Certificate of Incorporation. <br>b) A Certificate of the corporation is like a Birth certificate of the company because the company came into existence from the date of the issue of a certificate of incorporation. <br>c) It is legal proof of the fact that the company is incorporated.<br>d) After getting the certificate of incorporation, a company becomes a legal or artificial person having a distinct identity or personality. <br>e) Although it has no body, soul, and physical existence, still recognized as a person in the eyes of law.<\/p>\n\n\n\n<p><strong><mark style=\"background-color:rgba(0, 0, 0, 0)\" class=\"has-inline-color has-vivid-purple-color\">2) Every Company on incorporation gets a CIN.<\/mark><\/strong><\/p>\n\n\n\n<p><strong>Answer: <\/strong><br>a) CIN Is the Corporate Identity Number of a company. <br>b) CIN shows whether a company is a listed company or unlisted company, industry code number, state of its location, year of incorporation, type of company, and registration number given by ROC. <br>c) So, CIN becomes the company\u2019s unique identity number. Every incorporated company is required to quote CIN in every form and correspondence required in the course of business. d) CIN number is also required to obtain various permission from different authorities. So without a CIN number, the running of a business is not possible.<br>e) Thus, <mark style=\"background-color:rgba(0, 0, 0, 0)\" class=\"has-inline-color has-contrast-color\">Every Company on incorporation gets a CIN<\/mark>. <\/p>\n\n\n\n<p><mark style=\"background-color:rgba(0, 0, 0, 0)\" class=\"has-inline-color has-vivid-purple-color\"><strong>3) Promoters play an important role in formation of a company.<\/strong><\/mark><\/p>\n\n\n\n<p><strong>Answer:<\/strong> <br>a) Promoters are the ones who come up with the idea of starting a business.<br>b) They decide the objects of the business, amount of capital needed, scale of business operation etc.<br>c) They prepare the various documents needed for incorporation of a company like Memorandum and Articles of Association.<br>d) Approach investors for collecting capital for the company.<br>e) Promoters often nominate themselves as first directors of the company and are first subscribers to Memorandum and Articles of Association.<br>f) The promoters can enter into contracts with third parties on behalf of the proposed company.<br>g) Thus, the liability of shareholders of the company is limited.<\/p>\n\n\n\n<h3 class=\"wp-block-heading has-text-align-center has-cyan-bluish-gray-background-color has-background\"><span class=\"ez-toc-section\" id=\"Q6_Answer_the_following_questions\"><\/span>Q.6 Answer the following questions<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p><strong><mark style=\"background-color:rgba(0, 0, 0, 0)\" class=\"has-inline-color has-accent-2-color\">1) Explain briefly the steps involved in incorporation of a company.<\/mark><\/strong><\/p>\n\n\n\n<p><strong>Answer:<\/strong><br><strong>Following steps are undertaken to incorporate a company:<\/strong><\/p>\n\n\n\n<p><strong>1. Obtain Digital Signature Certificate (DSC)<\/strong><\/p>\n\n\n\n<p>A Digital Signature Certificate is needed for persons authorized to sign documents for e-filing. So Promoters and the proposed first directors need to obtain a DSC by applying to the Certified Authority.<\/p>\n\n\n\n<p><strong>2. Register DSC in the name of the Director with MCA<\/strong><\/p>\n\n\n\n<p>After obtaining the DSC in the name of the Promoter \/ Director, the DSC has to be registered with the MCA. MCA maintains the details of every Director including their DIN, personal details, etc.<\/p>\n\n\n\n<p><strong>3. Obtain Director Identification Number (DIN)<\/strong><\/p>\n\n\n\n<p>The proposed first directors of the proposed company who do not have DIN, have to apply for DIN in electronic form SPICe &#8211; 32 at the time of incorporation. A person to be appointed as a Director must have a DIN.<\/p>\n\n\n\n<p><strong>4. Apply for Reservation of Name<\/strong><\/p>\n\n\n\n<p>The Promoters have to get the proposed name of the company approved by the Central Registration Centre (CRC) by filling form RUN (Reserve Unique Name) along with the prescribedn fees through MCA Portal (www.mca.gov.in).<\/p>\n\n\n\n<p>Promoters may suggest more than one name in the order of their preference. After verifying its database, CRC will give its approval for the proposed name and reserve the name for a period of 20 days from the date of application.<\/p>\n\n\n\n<p><strong>5. Finalize Memorandum of Association and Articles of Association :<\/strong><\/p>\n\n\n\n<p>Two important documents the Memorandum and Articles of Association have to be submitted along with the application for incorporation of a company. These documents contain legal and technical information related to objectives of company and regulations for operation of company pursuant to company Law. Hence, the promoters take the help of professionals like a company Secretary, legal experts, accountants, etc. to finalize the draft Memorandum and Articles of Association.<\/p>\n\n\n\n<p>In case a proposed public company wants to list itself with one or more stock exchanges, Promoters should send a copy of the draft Memorandum of Association and Articles of Association to such stock exchanges for their review and suggestions.<\/p>\n\n\n\n<p><strong>6. Signing, Stamping and Dating of Memorandum and Articles of Association<\/strong><\/p>\n\n\n\n<p>The Memorandum of Association and Articles of Association must be signed by each subscriber to the Memorandum and shall add his name, description, address, occupation, etc. in the presence of at least one witness who shall attest the signatures and likewise sign and add his name, description, address, occupation, etc.<\/p>\n\n\n\n<p>After signing, the Memorandum and Articles of Association needs to be stamped as per the Indian Stamp Act, 1899. The stamp duty depends on the authorized share capital of the company and varies from state to state.<\/p>\n\n\n\n<p><strong>7. Preparing other necessary documents needed for incorporating a company<\/strong><\/p>\n\n\n\n<p>i) Consent of Directors<br>ii) Details of Manager, Secretary, etc.<br>iii) Declaration by subscribers to the Memorandum and First Directors<\/p>\n\n\n\n<p><strong>8. Address for communication and notice of Registered office address<\/strong><\/p>\n\n\n\n<p>At the time of incorporation, if the proposed company has not decided its location of Registered office, the promoters have to give an address for communication. As per the Companies Act, 2013, a company is required to have a Registered office within 30 days of incorporation.<\/p>\n\n\n\n<p><strong>9. Obtain a statutory declaration from<\/strong><\/p>\n\n\n\n<p>i) An advocate, practicing company Secretary, a cost accountant or chartered accountant who is engaged in the formation of the company, and<br>ii) A person named in the Articles of Association as a Director, Manager or Secretary stating that all requirements related to incorporation has been complied with.<\/p>\n\n\n\n<p><strong>10. Filing of application and documents for incorporation of a company<\/strong><\/p>\n\n\n\n<p>After all the documents are prepared, the promoters have to submit an application to the Registrar of companies in the prescribed form along with all the necessary documents and the prescribed fees for incorporation.<\/p>\n\n\n\n<p><strong>11. Obtaining Certificate of Incorporation<\/strong><\/p>\n\n\n\n<p>After verifying that all the documents and information submitted to it is proper, the Registrar of Companies will enter the name of the company in the Register of Companies and certifies under his hand that the company is incorporated. Registrar issues the Certificate of Incorporation in the prescribed form.<\/p>\n\n\n\n<p><strong><mark style=\"background-color:rgba(0, 0, 0, 0)\" class=\"has-inline-color has-accent-2-color\">2) Promoters play an important role in formation of a company. &#8211; Explain.<\/mark><\/strong><\/p>\n\n\n\n<p><strong>Answer:<\/strong> <br>The Persons who undertake the process of promotion of a company are called as \u2018Promoters\u2019.<br>A promoter can be an individual, a partner, a company, an association or a syndicate.<\/p>\n\n\n\n<p><strong>Section 2(69) of the Companies Act, 2013 defines the term Promoter as a person :<\/strong><\/p>\n\n\n\n<p>1. Who has been named as such in a prospectus or is identified by the company in the Annual Return or<br>2. Who has control over the affairs of the company, directly or indirectly whether as a shareholder, Director or otherwise or<br>3. In accordance with whose advice, directions or instructions, the Board of Directors is<br>accustomed to act.<\/p>\n\n\n\n<p>However, a person who is assisting the promoter in a professional capacity (e.g. A lawyer,<br>accountant etc.) cannot be called as Promoter.<\/p>\n\n\n\n<p>i) Promoters are the ones who come up with the idea of starting a business.<br>ii) They decide the objects of the business, amount of capital needed, scale of business operation etc.<br>iii) They prepare the various documents needed for incorporation of a company like Memorandum and Articles of Association.<br>iv) Approach investors for collecting capital for the company.<br>v) Promoters often nominate themselves as first directors of the company and are first subscribers to Memorandum and Articles of Association.<br>vi) The promoters can enter into contracts with third parties on behalf of the proposed company.<\/p>\n\n\n\n<p>These contracts are called as \u2018Pre-incorporation contracts\u2019 or \u2018Preliminary Contracts\u2019. For e.g..<br>Contracts for preparing and printing Memorandum and Articles of Association, hiring office<br>premises, etc.<br>vii) Promoters have fiduciary duties towards the company they are setting up. They are supposed to act in such a manner so as to protect and promote the interest of the proposed company . They cannot make any secret profits while promoting a company.<\/p>\n\n\n\n<p>Hence, Promoters play an important role in the formation of a company.<\/p>\n\n\n\n<h3 class=\"wp-block-heading has-text-align-center\"><span class=\"ez-toc-section\" id=\"11th_SP_Textbook_Solutions\"><\/span>11th SP Textbook Solutions<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<figure class=\"wp-block-table\"><table><tbody><tr><td class=\"has-text-align-center\" data-align=\"center\"><strong>Chapter Name<\/strong><\/td><\/tr><tr><td class=\"has-text-align-center\" data-align=\"center\"><a href=\"https:\/\/scholarsclasses.com\/blog\/11th-sp-1st-chapter-exercise\/\" data-type=\"link\" data-id=\"https:\/\/scholarsclasses.com\/blog\/11th-sp-1st-chapter-exercise\/\">1) Secretary<\/a><\/td><\/tr><tr><td class=\"has-text-align-center\" data-align=\"center\"><a href=\"https:\/\/scholarsclasses.com\/blog\/11th-sp-2nd-chapter-exercise\/\" data-type=\"link\" data-id=\"https:\/\/scholarsclasses.com\/blog\/11th-sp-2nd-chapter-exercise\/\">2) Joint Stock Company<\/a><\/td><\/tr><tr><td class=\"has-text-align-center\" data-align=\"center\"><a href=\"https:\/\/scholarsclasses.com\/blog\/11th-sp-3rd-chapter-exercise\/\" data-type=\"link\" data-id=\"https:\/\/scholarsclasses.com\/blog\/11th-sp-3rd-chapter-exercise\/\">3) Formation of a Company<\/a><\/td><\/tr><tr><td class=\"has-text-align-center\" data-align=\"center\"><a href=\"https:\/\/scholarsclasses.com\/blog\/11th-sp-chapter-4-exercise\/\">4) Documents related to Formation of a Company<\/a><\/td><\/tr><tr><td class=\"has-text-align-center\" data-align=\"center\"><a href=\"https:\/\/scholarsclasses.com\/blog\/11th-sp-chapter-5-exercise\/\" data-type=\"link\" data-id=\"https:\/\/scholarsclasses.com\/blog\/11th-sp-chapter-5-exercise\/\">5) Members of a Company<\/a><\/td><\/tr><tr><td class=\"has-text-align-center\" data-align=\"center\"><a href=\"https:\/\/scholarsclasses.com\/blog\/11th-sp-chapter-6-exercise\/\" data-type=\"link\" data-id=\"https:\/\/scholarsclasses.com\/blog\/11th-sp-chapter-6-exercise\/\">6) Directors and Key Managerial Personnel of a Company<\/a><\/td><\/tr><tr><td class=\"has-text-align-center\" data-align=\"center\">7) Company Meetings &#8211; I<\/td><\/tr><tr><td class=\"has-text-align-center\" data-align=\"center\">8) Company Meetings &#8211; II<\/td><\/tr><tr><td class=\"has-text-align-center\" data-align=\"center\">9) Business Communication Skills of Secretary<\/td><\/tr><tr><td class=\"has-text-align-center\" data-align=\"center\">10) Correspondence with Directors<\/td><\/tr><tr><td class=\"has-text-align-center\" data-align=\"center\">11) Correspondence with Banks<\/td><\/tr><tr><td class=\"has-text-align-center\" data-align=\"center\">12) Correspondence with Statutory Authorities<\/td><\/tr><\/tbody><\/table><\/figure>\n\n\n\n<h3 class=\"wp-block-heading has-text-align-center\"><span class=\"ez-toc-section\" id=\"Check_out_other_posts_related_to_11th_Commerce\"><\/span>Check out other posts related to 11th Commerce<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<figure class=\"wp-block-table\"><table><tbody><tr><td class=\"has-text-align-center\" data-align=\"center\"><a href=\"https:\/\/scholarsclasses.com\/blog\/11th-commerce-notes-maharashtra-board\/\" data-type=\"link\" data-id=\"https:\/\/scholarsclasses.com\/blog\/11th-commerce-notes-maharashtra-board\/\">Textbook Solutions of 11th Commerce (All Subjects)<\/a><\/td><\/tr><tr><td class=\"has-text-align-center\" data-align=\"center\"><a href=\"https:\/\/scholarsclasses.com\/blog\/11th-commerce-books-pdf\/\" data-type=\"link\" data-id=\"https:\/\/scholarsclasses.com\/blog\/11th-commerce-books-pdf\/\">Free PDF of 11th Commerce Textbooks <\/a><\/td><\/tr><\/tbody><\/table><\/figure>\n\n\n\n<h3 class=\"wp-block-heading has-text-align-center has-contrast-color has-text-color\"><span class=\"ez-toc-section\" id=\"Online_lectures_of_Class_12_Commerce\"><\/span>Online lectures of Class 12 Commerce<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p>\ud83d\udd17 Share our videos and channel with your friends, and help us grow this channel.<br>Learn the Chapters of Accounts from our playlist.<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li><a href=\"https:\/\/rb.gy\/c9pmbq\" data-type=\"link\" data-id=\"https:\/\/rb.gy\/c9pmbq\" target=\"_blank\" rel=\"noopener\">Issue of Shares<\/a><\/li>\n\n\n\n<li><a href=\"https:\/\/rb.gy\/3f7zhl\" data-type=\"link\" data-id=\"https:\/\/rb.gy\/3f7zhl\" target=\"_blank\" rel=\"noopener\">Bills of Exchange<\/a><\/li>\n\n\n\n<li><a href=\"https:\/\/rb.gy\/v5flhj\" target=\"_blank\" rel=\"noopener\">Dissolution of Partnership Firm<\/a><\/li>\n\n\n\n<li><a href=\"https:\/\/rb.gy\/jpjgd8\" data-type=\"link\" data-id=\"https:\/\/rb.gy\/jpjgd8\" target=\"_blank\" rel=\"noopener\">NPO<\/a><\/li>\n\n\n\n<li><a href=\"https:\/\/rb.gy\/nhy2xy\" data-type=\"link\" data-id=\"https:\/\/rb.gy\/nhy2xy\" target=\"_blank\" rel=\"noopener\">Analysis of Financial Statement<\/a><\/li>\n\n\n\n<li><a href=\"https:\/\/rb.gy\/nhy2xy\" data-type=\"link\" data-id=\"https:\/\/rb.gy\/nhy2xy\" target=\"_blank\" rel=\"noopener\">Admission of Partner<\/a><\/li>\n\n\n\n<li><a href=\"https:\/\/www.youtube.com\/playlist?list=PLGiOLU46prNe6tQIJakepd3uGvatQyBUe\" data-type=\"link\" data-id=\"https:\/\/www.youtube.com\/playlist?list=PLGiOLU46prNe6tQIJakepd3uGvatQyBUe\" target=\"_blank\" rel=\"noopener\">Information Technology Lectures.<\/a><\/li>\n<\/ul>\n","protected":false},"excerpt":{"rendered":"<p>&#46;&#46;&#46;<\/p>\n","protected":false},"author":1,"featured_media":26462,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"footnotes":""},"categories":[5],"tags":[5445],"class_list":["post-26350","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-hsc-maharashtra-board","tag-11th-sp-3rd-chapter-exercise"],"_links":{"self":[{"href":"https:\/\/scholarsclasses.com\/blog\/wp-json\/wp\/v2\/posts\/26350","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/scholarsclasses.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/scholarsclasses.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/scholarsclasses.com\/blog\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/scholarsclasses.com\/blog\/wp-json\/wp\/v2\/comments?post=26350"}],"version-history":[{"count":12,"href":"https:\/\/scholarsclasses.com\/blog\/wp-json\/wp\/v2\/posts\/26350\/revisions"}],"predecessor-version":[{"id":41234,"href":"https:\/\/scholarsclasses.com\/blog\/wp-json\/wp\/v2\/posts\/26350\/revisions\/41234"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/scholarsclasses.com\/blog\/wp-json\/wp\/v2\/media\/26462"}],"wp:attachment":[{"href":"https:\/\/scholarsclasses.com\/blog\/wp-json\/wp\/v2\/media?parent=26350"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/scholarsclasses.com\/blog\/wp-json\/wp\/v2\/categories?post=26350"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/scholarsclasses.com\/blog\/wp-json\/wp\/v2\/tags?post=26350"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}