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Incorporation of Company and Matters - 1 Video Lecture | Crash Course for CA Intermediate

FAQs on Incorporation of Company and Matters - 1 Video Lecture - Crash Course for CA Intermediate

1. What is the process of incorporating a company?

Ans. The process of incorporating a company typically involves several key steps: Firstly, the promoters must choose a suitable name for the company and ensure it complies with naming regulations. Next, they must prepare and file the Memorandum of Association (MoA) and Articles of Association (AoA) with the relevant regulatory authority. This includes providing necessary details such as the registered office address, the company's objectives, and the particulars of the directors. After submission, the authority reviews the documents, and upon approval, issues a Certificate of Incorporation, officially recognizing the company as a legal entity.

2. What are the different types of companies that can be incorporated?

Ans. Companies can be categorized into several types for incorporation purposes. The most common types include: 1. Private Limited Company - Limited to a small number of shareholders and cannot invite the public to subscribe to its shares. 2. Public Limited Company - Can raise capital by offering shares to the public and has a minimum requirement of seven members. 3. One Person Company - A new form of company that allows a single individual to operate a company with limited liability. 4. Limited Liability Partnership (LLP) - Combines features of both partnerships and corporations, offering limited liability to its partners.

3. What is the significance of the Memorandum of Association?

Ans. The Memorandum of Association (MoA) is a crucial document for a company as it outlines the company’s objectives, scope, and the relationship with the outside world. It serves as a charter for the company and includes essential details such as the company's name, registered office, and the amount of capital. The MoA also contains clauses that define the powers of the company and its limitations. It is essential for ensuring transparency and protecting the interests of shareholders and creditors.

4. What are the legal requirements for the Articles of Association?

Ans. The Articles of Association (AoA) is a document that governs the internal management of a company. Legally, it must be filed along with the Memorandum of Association during incorporation. The AoA should detail the rules regarding the conduct of meetings, appointment and powers of directors, rights of shareholders, and procedures for issuing shares. It must adhere to the regulations prescribed by the Companies Act and cannot contravene the provisions of the MoA.

5. How does a company acquire legal status after incorporation?

Ans. A company acquires legal status upon the issuance of a Certificate of Incorporation by the relevant regulatory authority. This certificate signifies that all the necessary documents have been filed and that the company complies with the legal requirements for incorporation. Once incorporated, the company becomes a separate legal entity, distinct from its owners, enabling it to enter into contracts, sue or be sued, and own property in its name. The legal status also provides limited liability to its shareholders, meaning their personal assets are protected from the company’s debts.

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Sep 30, 2025 Last updated

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