PPT - Formation of a Company | Business Studies (BST) Class 11 - Commerce PDF Download

 Page 1


Formation of a 
Company
Page 2


Formation of a 
Company
Introduction to Company Formation
Modern Business Needs
Modern business requires large capital and faces increasing competition and risk.
Company Structure Preference
Company form is preferred for medium and large organizations due to risk 
distribution.
Formation Process
Steps from business idea to legal commencement are called stages in company 
formation.
Promoters
Those taking these steps and associated risks are called promoters.
Page 3


Formation of a 
Company
Introduction to Company Formation
Modern Business Needs
Modern business requires large capital and faces increasing competition and risk.
Company Structure Preference
Company form is preferred for medium and large organizations due to risk 
distribution.
Formation Process
Steps from business idea to legal commencement are called stages in company 
formation.
Promoters
Those taking these steps and associated risks are called promoters.
Formation of a Company
1
Promotion
Conceiving business idea 
and taking initiative to 
form a company.
2
Incorporation
Legal registration of the 
company with 
appropriate authorities.
3
Capital Subscription
Raising necessary funds 
through various means to 
start operations.
Private companies don't need to issue a prospectus or complete minimum subscription 
formalities.
Page 4


Formation of a 
Company
Introduction to Company Formation
Modern Business Needs
Modern business requires large capital and faces increasing competition and risk.
Company Structure Preference
Company form is preferred for medium and large organizations due to risk 
distribution.
Formation Process
Steps from business idea to legal commencement are called stages in company 
formation.
Promoters
Those taking these steps and associated risks are called promoters.
Formation of a Company
1
Promotion
Conceiving business idea 
and taking initiative to 
form a company.
2
Incorporation
Legal registration of the 
company with 
appropriate authorities.
3
Capital Subscription
Raising necessary funds 
through various means to 
start operations.
Private companies don't need to issue a prospectus or complete minimum subscription 
formalities.
Promotion of a Company
Business Idea 
Discovery
Begins with discovering 
a potential business 
opportunity.
Promoter's Role
Promoters analyze 
prospects and bring 
together resources to 
set the organization 
going.
Legal Definition
Section 69 defines 
promoters as those 
named in prospectus or 
controlling company 
affairs.
Preparation 
Activities
Promoters prepare 
documents and 
complete activities for 
company registration.
Page 5


Formation of a 
Company
Introduction to Company Formation
Modern Business Needs
Modern business requires large capital and faces increasing competition and risk.
Company Structure Preference
Company form is preferred for medium and large organizations due to risk 
distribution.
Formation Process
Steps from business idea to legal commencement are called stages in company 
formation.
Promoters
Those taking these steps and associated risks are called promoters.
Formation of a Company
1
Promotion
Conceiving business idea 
and taking initiative to 
form a company.
2
Incorporation
Legal registration of the 
company with 
appropriate authorities.
3
Capital Subscription
Raising necessary funds 
through various means to 
start operations.
Private companies don't need to issue a prospectus or complete minimum subscription 
formalities.
Promotion of a Company
Business Idea 
Discovery
Begins with discovering 
a potential business 
opportunity.
Promoter's Role
Promoters analyze 
prospects and bring 
together resources to 
set the organization 
going.
Legal Definition
Section 69 defines 
promoters as those 
named in prospectus or 
controlling company 
affairs.
Preparation 
Activities
Promoters prepare 
documents and 
complete activities for 
company registration.
Functions of a Promoter
1
Identify Business 
Opportunity
Find potential business ideas 
with investment potential.
2
Conduct Feasibility 
Studies
Analyze technical, financial, and 
economic feasibility.
3
Obtain Name Approval
Select and get company name 
approved by Registrar.
4
Appoint Professionals
Hire experts to assist with documentation.
5
Prepare Legal Documents
Create Memorandum and Articles of Association.