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Business Environment and Law-Nature Of Company And Formation

Certificate To Commence Business: - Nature Of Company And Formation

   Posted On :  08.05.2018 07:11 am

Where the company has issued a prospectus – Section 149(1), it shall not commence business or exercise any borrowing powers unless:

Certificate To Commence Business:
 
Where the company has issued a prospectus – Section 149(1), it shall not commence business or exercise any borrowing powers unless:

1. Minimum subscription
2. Every director of the company has paid to the company.
3. No money is, or may become, liable to be repaid to the applicants.
4. Filed with the registrar a duly verified declaration by one of the directors or the secretary.

Where the company has not issued a prospectus Section 149(2) requires, that it shall not commence business or exercise its borrowing powers unless:-

a. It has filed with the registrar a statement in lieu of prospectus;
b. Every director of the company has paid to the company on each of the shares taken or contracted to be taken by him.
c. Filed with the registrar duly verified declaration by one of the directors or the secretary.

Penalty: every person at fault is liable to a fine upto Rs.5,000 for every day of default.
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