formation of comp

Promotion of a Company

The first stage in the formation of a company involving conceiving a business idea and taking initial steps to create a company.

Promoter

A person or group who undertakes to form a company and takes necessary steps to set it up.

Feasibility Studies

Detailed investigations undertaken by promoters to assess the viability of business opportunities.

Technical Feasibility

Assessment of whether the required resources for a project are available and can be obtained.

Financial Feasibility

Estimation of funds required for a project and availability of such funds.

Economic Feasibility

Evaluation of the potential profitability of a project, despite being technically and financially viable.

Memorandum of Association

The essential document defining the objectives and scope of activities a company can undertake.

Articles of Association

The set of rules governing the internal management of a company.

Consent of Proposed Directors

Written agreement from each proposed director confirming their willingness to serve and purchase qualification shares.

Statutory Declaration

A declaration confirming compliance with legal requirements for company registration.

Registered Office Clause

A clause in the Memorandum specifying the state where the company's registered office will be located.

Liability Clause

A clause limiting shareholders' liability to the unpaid amount on their shares.

Capital Clause

A clause stating the maximum share capital a company is authorized to raise.

Name Approval

The process by which promoters secure approval for the name of the company from the Registrar.

Promoter

Key responsibilities include identifying business opportunities, conducting feasibility studies, and preparing necessary documents for registration.

Return of Allotment

A statement submitted to the Registrar detailing the names and addresses of shareholders and shares allotted.

Incorporation

The legal process of forming a company, which involves registering it with the appropriate government authorities.

Directors

Individuals appointed to manage the affairs and operations of a company.

Shareholders

Persons or entities that own shares in a company and have a claim on a portion of its profits.

Public Offering

The process by which a company offers its shares to the public for the first time.

Private Placement

The sale of securities to a small number of selected investors as a way to raise capital.

Due Diligence

The investigation and evaluation of a business opportunity before making a commitment.

Articles of Incorporation

A legal document that establishes a company’s existence in the eyes of the law.

Corporate Governance

The system of rules, practices, and processes by which a company is directed and controlled.

Share Capital

The funds raised by issuing shares in exchange for ownership in the company.

Limited Liability

A type of liability that does not exceed the amount invested in a business; protects personal assets from business debts.

Position of Promoters

Promoters play a crucial role in the initial stages of a company, including identifying business opportunities and facilitating the incorporation process.

Incorporation Process

Incorporation involves several steps, including drafting necessary documents, completing legal requirements, and registering the company with government authorities.

Capital Subscription

The process by which investors commit to purchasing shares in a company, contributing to its initial capitalization.

Business Plan

A formal written document detailing the strategy and operational plan of a company.

Initial Public Offering (IPO)

The first sale of stock by a private company to the public, often used as a way to raise capital.

Board of Directors

A group of individuals elected to represent shareholders and oversee the activities of a company.

Dividend

A portion of a company's earnings distributed to shareholders.

Asset

Anything of value or a resource owned by the business, used to generate income.

Liability

Financial obligations or debts a company owes to external parties.

Equity Financing

Raising capital by selling company shares to investors.

Debt Financing

Raising capital through borrowing, typically by issuing bonds or taking loans.

Market Research

The process of gathering, analyzing, and interpreting information about a market.

Intellectual Property

Creations of the mind, such as inventions, designs, and brand names that are legally protected.

Valuation

The process of determining the current worth of an asset or a company.

Investment,

The allocation of resources, usually money, with the expectation of generating an income or profit.

Risk Management

The identification, assessment, and prioritization of risks followed by coordinated efforts to minimize, control, and monitor the impact of unforeseen events.

Break-even Analysis

A calculation to determine the level of sales at which total revenues equal total costs, resulting in no profit or loss.

Exit Strategy

A plan for how an investor or business owner intends to sell or reduce ownership in a venture to realize a profit.

Stakeholders

Individuals or groups that have an interest in the success and operations of a company.