Raising of capital

After incorporation ,a copy of the prospectus is filed with the Registrar of Companies and on the specific date it will be issued to the public. Applications are received from the public for purchasing shares. If more or equal to minimum subscription, directors will proceed with allotment work. Allotment letters are issued to whom shares are allotted. Regret letters to others. Return of allotment filed at Registrars. Share certificates issued to share holders.

Commencement of business
Private co immediately & public co after obtaining certificate from registrar. In case company has a share capital, it cannot commence business until shares payable in cash have been allotted to the extent of the minimum subscription. Every Director has paid in cash the application and allotment money on the shares taken by him. A statutory declaration duly verified by one of the directors or the secretary that above conditions have been complied with. Commence business within a year of incorporation or else it is liable to be wound up by the court.

Lifting the corporate veil.

The court has power to control the company business in order to check the misuse of the corporate personality of the company by its directors or members of the company.

Memorandum of Association
Defines extent of powers of the company. Document which sets out the constitution of the company. Foundation on which the structure of the company is based. Public document available for inspection. Shareholder can find out the purpose for which his money is going to be used by the company and what risk he is taking in making the investment.

Contents of Memorandum
1. 2. 3. 4. 5. 6. 7. Name. Registered office . Object. Liability. Capital. Association. Subscription.

Alteration of name clause.

May change its name by passing a special resolution and with the permission of the central government. Registrar will change the name, amend the MOA, issue a new certificate of incorporation.

Alteration of domicile clause

When shifting its office from one place to another, Pass a special resolution in a duly convened general meeting. Change takes effect when confirmed by central government. Copy of resolution to be filed with the registrar within 30 days of the change. Cannot change its registered office from India to another country.

Alteration of object clause.

Carry on its business more economically or efficiently. To attain its main purpose by new or improved means. To enlarge the local area of its operation. To carry on some business combined with existing business which is advantageous. To restrict or abandon any of the objects specified in the memorandum. To sell or dispose of the whole or any part of undertaking of the company. To amalgamate with any other company or body of persons.

Alteration of capital clause

Co limited by share capital if permitted by its AOA may alter its capital clause To increase the share capital. To consolidate its share capital into shares of higher denominations. To subdivide its share capital into shares of lower denominations. To convert its shares into stock. To cancel the unissued capital To reduce its share capital.

Alteration of liability clause

Consent in writing by its members. Liability of Director, MD or Manager can be made unlimited by passing a special resolution, if article so permits. Company shall give notice to Registrar with in 30 days of passing the resolution.