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Stages in the formation of a public company are in the following order
  • a)
    Promotion, Commencement of Business, Incorporation, Capital Subscription
  • b)
    Incorporation, Capital Subscription. Commencement of Business, Promotion
  • c)
    Promotion, Incorporation, Capital Subscription, Commencement of Business
  • d)
    Capital Subscription, Promotion, Incorporation, Commencement of Business
Correct answer is option 'C'. Can you explain this answer?
Verified Answer
Stages in the formation of a public company are in the following order...
Stages in the formation of a public company:
The correct order of stages in the formation of a public company is:
Promotion:
- This is the initial stage where the idea for the formation of the company is conceived.
- Promoters identify the business opportunity and gather the necessary resources and expertise to turn the idea into a viable business venture.
Incorporation:
- Once the promoters have completed the necessary groundwork, they proceed to incorporate the company.
- Incorporation involves registering the company with the relevant regulatory authorities and obtaining a legal status as a separate entity.
Capital Subscription:
- After the incorporation, the company needs to raise capital to finance its operations and growth.
- Capital subscription refers to the process of inviting potential investors to subscribe to shares or securities of the company.
- This is typically done through public offerings, private placements, or a combination of both.
Commencement of Business:
- Once the company has successfully raised the required capital, it can commence its business operations.
- At this stage, the company starts carrying out its core activities, producing goods or providing services to generate revenue.
Therefore, the correct order of stages in the formation of a public company is: Promotion, Incorporation, Capital Subscription, Commencement of Business (Option C).
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Stages in the formation of a public company are in the following ordera)Promotion, Commencement of Business, Incorporation, Capital Subscriptionb)Incorporation, Capital Subscription. Commencement of Business, Promotionc)Promotion, Incorporation, Capital Subscription, Commencement of Businessd)Capital Subscription, Promotion, Incorporation, Commencement of BusinessCorrect answer is option 'C'. Can you explain this answer?
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