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Incorporation of Company and Matters - 3 Video Lecture | Crash Course for CA Intermediate
FAQs on Incorporation of Company and Matters - 3 Video Lecture - Crash Course for CA Intermediate
| 1. What are the key steps involved in the incorporation of a company? |  |
Ans. The incorporation of a company typically involves several key steps:
1. <b>Choosing a Company Name</b>: The name must be unique and comply with legal requirements.
2. <b>Drafting the Memorandum and Articles of Association</b>: These documents outline the company's objectives and rules.
3. <b>Filing with the Registrar of Companies</b>: Required forms and documents must be submitted to the relevant authority.
4. <b>Payment of Fees</b>: A registration fee is payable at the time of filing.
5. <b>Certificate of Incorporation</b>: Once approved, the company receives a certificate that officially recognizes its existence.
| 2. What is the difference between a public limited company and a private limited company? | |
Ans. A public limited company can offer its shares to the general public and is required to meet stricter regulatory requirements, including regular financial disclosures. In contrast, a private limited company cannot sell shares to the public and has fewer disclosure obligations, providing more privacy for its operations and finances.
| 3. What are the legal requirements for the directors of a company? | |
Ans. Legal requirements for directors generally include:
1. <b>Minimum Age</b>: Directors must be at least 18 years old.
2. <b>No Disqualifications</b>: Individuals disqualified under company law cannot serve as directors.
3. <b>Number of Directors</b>: Companies must have a minimum number of directors as specified by law, typically at least two for private companies and three for public companies.
4. <b>Duties and Responsibilities</b>: Directors must act in the best interest of the company, avoid conflicts of interest, and fulfill their fiduciary duties.
| 4. What is the significance of obtaining a Certificate of Incorporation? | |
Ans. The Certificate of Incorporation is significant as it marks the official formation of the company. It provides legal recognition, allowing the company to enter into contracts, open bank accounts, and operate as a separate legal entity distinct from its owners. This certificate also protects the company name and limits the liability of its shareholders.
| 5. What are the common reasons for the rejection of a company registration application? | |
Ans. Common reasons for rejection include:
1. <b>Name Availability Issues</b>: If the proposed name is already in use or does not comply with naming regulations.
2. <b>Incomplete Documentation</b>: Failure to provide all required documents or forms can lead to rejection.
3. <b>Non-compliance with Legal Requirements</b>: If the memorandum and articles of association do not meet statutory requirements.
4. <b>Ineligible Directors</b>: If any proposed directors do not meet the legal criteria for directorship, such as age or disqualification status.
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