Lecture 10

Effects of Incorporation:
The certificate of incorporation is conclusive evidence of the fact that:
(i) The company is properly incorporated and duly registered;
(ii) The terms of the Memorandum and Articles are within the law;
(iii) All requirements of the Act in respect of registration have been complied with;
(iv) A private company can start its business after getting the certificate of incorporation; and
(v) With the issue of certificate, the company takes birth with a separate legal entity.

For the commencement of business, every public company has to obtain the certificate of commencement, which requires the fulfillment of following conditions:

Issue of Prospectus: A company has to issue prospectus for selling shares and debentures to public.

Allotment of Shares: The shares and debentures are allotted according to the pro visions of memorandum, when applications are received from the public.

Minimum subscription: It is also certified that the shares have been allotted up to an amount, not less than the minimum subscription. After verifying he documents, the registrar issues a certificate of commencement of business to public company.