Certificate of Commencement of Business for Private Companies

A certificate of commencement of business is a legal document that a company must obtain before starting any business operations. It is a confirmation that the company has fulfilled all the necessary legal formalities and is now authorized to commence business. Let's explore which companies require a certificate of commencement of business.

Private Companies

A private company is a type of company that is owned by a limited number of shareholders. It is not required to issue a prospectus or invite the public to subscribe to its shares. A private company can commence business immediately after its incorporation. Therefore, a private company does not require a certificate of commencement of business.

Public Companies

A public company is a type of company that is owned by the public. It is required to issue a prospectus and invite the public to subscribe to its shares. A public company cannot commence business immediately after its incorporation. It must obtain a certificate of commencement of business before starting any business operations.

Private Company Subsidiary to a Public Company

If a private company is a subsidiary of a public company, it must also obtain a certificate of commencement of business before starting any business operations. This is because the subsidiary company is a separate legal entity from its parent company.

Conclusion

In conclusion, a certificate of commencement of business is not required for private companies. Public companies and private company subsidiaries to a public company are required to obtain a certificate of commencement of business before starting any business operations.