Question

The student is required to formulate an imaginary company as per Incorporation rules mentioned in Companies act. The student has to explain the objectives for which the company will be formed and also has to frame MOA and AOA of the company.

Answer 1

For incorporation of company, legislation must be decided based on business functions and management. In most of the countries, if the key management decision are taken in one country that are neccesary for conduct of business are in sustance taken, then the legislation of such country to be followed.

Considering India for incorporation, there is SPICE+ website where, we can directly enter the details of company and form an Indian company.

Incorporation rules states for subscription and necessary documentary proofs.

For articles and memorandum of association which are considered as regulatory of the company, acts as contract between shareholders (AOA) and outsiders (MOA) which are fundamental in governing the company.

The format of sample AOA and MOA is provided in schdule 1 of the companies Act, 2013 where there are 10 tables which gives AOA and MOA of each category based on shareholders, share capital etc.,

MOA mainly has various clause that descirbes the company and its function through objective clause.

Objective of company being formed:

It gives separate ownership with limited liability. It also helps to generate capital. Capital is the money needed to produce goods and services. It facilitates Transferability of shares. It brings in expertise, etc.,

In India, it has lower tax rate when compared to partnership.

The student are encouraged to provide point by point answers during presentaiton.