An Introduction

In a legal world, it is best for a company to get registered after its

incorporation. In a way, Incorporation and Registration go hand in hand as an
unregistered business cannot claim many benefits like taxable claims. The
company cannot even file a suit against any third parties.

Formation and Incorporation of Company

We see an unregistered company faces many disadvantages, thus companies
get registered under The Companies Act 2013 or any other recognized
statutory act.

To register and incorporate a company, an application needs to be filed with

the Registrar of Companies. The application is to be accompanied by the
names of the members, memorandum of association and articles of
association and other important documents. These are also required to be
filed with the Registrar of Companies (ROC) of the state in which the company
is proposed to be incorporated.

The Mentioned Documents are to be filed with the Application for

Registration and Incorporation:
1. Memorandum of Association (MOA)
2. Articles of Association (AOA)
3. The agreement, where the company agrees to enter into any
appointment of managing or full-time director.
4. A copy of the letter where the ROC intimates the availability of time
5. The documents that mandate the payment of registration and filling of
the fees
6. The documents that mention the directorship and location of the office
of the company
7. A declaration that the company has already complied with all the rules
of the Companies Act.

When all these requirements have been complied, the Registrar of Companies
(ROC) registers the company and issues a certificate of incorporation in
regards to the company that brings the company into existence in the eyes of
law, as a legal entity in India. This makes the company bound to all Indian
laws and regulations as are applicable to other domestic companies.
Stages of Formation of a Company
There are a few leading steps in the formation of a company. The steps are as
follows:
Step 1 – Promotion of a Company
The most important step is the forming of a company, here the promoter talks
about the ideas and further business-building process.

Step 2 – Registration of A Company

This is the legal part of the formation process as there is a lot of data,
paperwork, relation with people, memorandums, declarations that must be
involved.

Step 3 – Certificate of Incorporation

After all the legal formalities, the company need to start functioning, and this
validity is provided in this stage

Step 4 – Certificate of Commencement of Business

After receiving the certificate of incorporation, they can now start their own
business.
This summation of the formation of a company is a quick version of reality.
However, this is the view of how a company is formed.

Promoters
“A promoter is the one, who undertakes to form a company with reference to a
given object and sets it going and takes the necessary steps to accomplish
that purpose,” Said by Justice C.J. Cokburn. A promoter devises an idea
setting up a business in a given place. He performs various formalities which
are required for starting a company. A promoter may be an individual, firm,
association of persons (AOP) or a company. A corporate’s promoter is a firm
or person who does the preliminary work (initial work) in relation to the
formation of a company. This includes its promotion, incorporation and inviting
people to invest money in the company, at the time of its formation. An
investment banker, a stock promoter or an underwriter may, wholly or in part,
perform the task of a promoter. Promoters generally guarantee a duty of
utmost good faith, to not fraud any investors and disclose all facts about the
company's business.

Types of Promoters
There are importantly three types of Promoters, which are mentioned: -
Occasional Promoters
These promoters are not engaged in the promotion work on a regular basis.
They take up the promotion of companies and once it is complete, they
resume their original profession.
Entrepreneur Promoters
They act as both promoters and entrepreneurs. They develop the idea of a
new business unit, do the base work to build it and may subsequently become
a part of the management.

Financial Promoters
Financial institutions, like investment banks or industrial banks, might take up
the promotion of a company to find investment opportunities.

Promoter Activity
A promoter is the main creator of the business, Discovery of a business idea,
Detailed Investigation, Assembling the factors of Promotion, entering into
preliminary contracts are the duties of a promoter. A promoter starts a
business from scratch.

As in the first stage of company promotion, a promoter formulates new ideas

and makes an assessment of the capability of a particular aspect of the
business be it technical feasibility or financial feasibility. In a detailed
investigation, he investigates the profitability and prospects of the growth of
the proposed activity. Here, he may seek the help of specialists such as
lawyers or accountants. If the business is promising, he undertakes the risk of
forming the business, he takes steps to arrange various factors of production
like the land, labour or capital. The promoter also may enter into legal
contracts with third parties for the registration of a company. Even the
promoter has to select a distinct, non-identical and specific name for the
company.

Thus we see how the promoters are important for the company.