Commerce · Class 11 Commerce
Ch 7Formation of a Joint Stock Company — Class 11 Commerce, concept-first.
A joint stock company does not spring into existence the moment someone decides to start a business — it is brought into being through a definite legal process laid down by the Companies Act, 2013.
Key concepts
Hover a concept to preview it and jump to its most relevant Q&A.
Promotion of a Company
Promotion is the stage in which a promoter — a person who conceives a business idea and takes the steps to translate it into a registered company — investigates the feasibility of the idea, assembles the resources, arran…
Most relevant Q&A
Chapter contents
The NCERT structure, section by section. Open a section to see its questions, then read the concept-first solution.
Meaning and Stages in the Formation of a Company
A joint stock company does not spring into existence the moment someone decides to start a business — it is brought into being through a definite legal process laid down by the Companies Act, 2013.
Promotion of a Company
Meaning. Promotion is the first and, in many ways, the most creative stage in forming a company. It covers everything that happens between the birth of a business idea and the actual registration of t…
Incorporation of a Company
Meaning. Incorporation (also called registration) is the legal act by which a company is formally brought into existence as a body corporate, separate from the persons who formed it.
Memorandum of Association (MOA)
The Memorandum of Association is the most fundamental document of a company — it is often described as the company's charter or constitution, because it defines the company's relationship with the out…
Articles of Association (AOA)
Meaning. The Articles of Association, dealt with under Section 5 of the Companies Act, 2013, are the rules and bye-laws that govern the internal management of the company — how it actually runs itself…
Prospectus and Capital Subscription
Meaning of Prospectus. Section 2(70) of the Companies Act, 2013 defines a prospectus broadly as any document described or issued as a prospectus, and includes a red herring prospectus, a shelf prospec…
Minimum Subscription and Liability for Misstatements
Minimum Subscription. Section 39 of the Companies Act, 2013 requires that no allotment of shares can be made on a first offer to the public unless the amount stated in the prospectus as the minimum su…
Commencement of Business
Meaning. Commencement of Business is the final stage in the formation of a company — the point at which the company becomes legally entitled to actually begin its business activities and to exercise i…
Very Short Answer Questions
Short Answer Questions
+−Show 4 questionsHide questions4 questions
Sample & Board Papers
Sample papers and previous-year board questions for this subject.