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Explain Commencement of Business by a Company

Avatar 37a3bd7bc7328f0ead2c0f6f635dddf60615e676e6b4ddf964144012e529de45 Uma asked almost 3 years ago

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4 Answers
Avatar 37a3bd7bc7328f0ead2c0f6f635dddf60615e676e6b4ddf964144012e529de45 narahari answered over 2 years ago

The directors who have applied or contracted to take up shares should pay the amount they are liable to pay in cash, at least a proportion equal to the proportion payable on application and allotment of shares offered for public subscription.

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Avatar 37a3bd7bc7328f0ead2c0f6f635dddf60615e676e6b4ddf964144012e529de45 veeru answered almost 3 years ago

Issue the prospectus. Minimum subscription 2.1. Minimum subscription amount mentioned in the prospectus should have been received in cash. 2.2. In order that a transaction between a company and allottee of shares may amount to “payment in cash” each party must have an actual demand on the other for present payment. The directors who have applied or contracted to take up shares should pay the amount they are liable to pay in cash, at least a proportion equal to the proportion payable on application and allotment of shares offered for public subscription. Listing: Where the shares are to be quoted on the stock exchange necessary application must be submitted to it and approval obtained within the prescribed time.

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Open uri20170510 32134 1c996lj?1494421732 Anil answered almost 3 years ago

Under Companies Act 2013, the date of incorporation of a company cannot be the date of commencement of business (COB). From the point of commencement of Business companies may be divided into 2 categories: 1.Public and Private Companies not having Share Capital A public company or a private limited company not having share capital are not required to comply with any other formalities and may commence its business activities immediately after obtaining the certificate of incorporation from the concerned Registrar of Companies. 2.Public and Private Companies having Share Capital As per section 11 of Companies Act, 2013, now all newly incorporated Public and Private Companies having Share Capital would be required to obtain certificate of commencement of business from concerned Registrar of Companies before commencing the business or exercise of borrowing powers. Through this article we discuss the procedure for obtaining certificate of commencement of Business under Companies Act, 2013. For statutory provisions related to commencement of Business one can refer to the following sources: ◾Section 11 of Companies Act, 2013 ◾Rule 24 of Companies (Incorporation) Rules, 2014

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Avatar 37a3bd7bc7328f0ead2c0f6f635dddf60615e676e6b4ddf964144012e529de45 lochan answered almost 3 years ago

1. Issue the prospectus. 2. Minimum subscription 2.1. Minimum subscription amount mentioned in the prospectus should have been received in cash. 2.2. In order that a transaction between a company and allottee of shares may amount to “payment in cash” each party must have an actual demand on the other for present payment. 3. The directors who have applied or contracted to take up shares should pay the amount they are liable to pay in cash, at least a proportion equal to the proportion payable on application and allotment of shares offered for public subscription. 4. Listing: Where the shares are to be quoted on the stock exchange necessary application must be submitted to it and approval obtained within the prescribed time. 5. Shares issued for cash to the public should be allotted. 6. Declaration: File e-Form 19 of the Companies (Central Government’s) General Rules and Forms, 1956 on the stamp paper of requisite value as required by the Stamp Act of the respective states with the Registrar. This form is regarding a declaration of compliance with the provisions of section 149 clauses (a), (b) and (c) of sub section (1) and it has to be duly verified by one of the directors or the secretary or where the company has not appointed a secretary, by the secretary in whole-time practice by signing it digitally. The form is to be filed electronically. However, in case stamp duty is not paid electronically through MCA portal, the company is required to deliver simultaneously the original stamped physical copy of the uploaded e-Form along with a copy of challan/ receipt in the concerned office of ROC failing which such e-Form shall be put into “Waiting for user clarification” in terms of Regulation 17 of the Companies Regulations, 1956 (for specimen of e-form 19, please refer the CD provided along with the Study Material or see the link http://www.mca.gov.in/MCA21/Download_eForm_choose.html). 7. Obtain the certificate for commencement of business from the Registrar. The certificate is conclusive evidence that the company is entitled to commence business Thanks

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