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Introduction To Business

The document discusses the promotion, preparation, incorporation, and capital collection stages of starting a new business. Key steps include initiating an idea, collecting information, applying for licenses, registering the business name, preparing documents like the memorandum and articles of association, filing documents for incorporation approval, and collecting capital from investors. The memorandum outlines the business name, objective, and capital, while the articles of association define rules and governance.

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Zaid Bin Safdar
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27 views12 pages

Introduction To Business

The document discusses the promotion, preparation, incorporation, and capital collection stages of starting a new business. Key steps include initiating an idea, collecting information, applying for licenses, registering the business name, preparing documents like the memorandum and articles of association, filing documents for incorporation approval, and collecting capital from investors. The memorandum outlines the business name, objective, and capital, while the articles of association define rules and governance.

Uploaded by

Zaid Bin Safdar
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd
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Introduction to Business

Lecture
Promotion Stage
◼ Initiation of idea
◼ Further discussion with other people
◼ Collection of further information regarding
sales, profitability, availability of machinery,
restrictions of the Government etc.
◼ Some other factors
◼ Is there a need for a license for this business?
◼ Is N.O.C required from the Government?
Promotion Stage
◼ Promoters have applied for license and
permission.
◼ If copyrights are involved, permission of the
principal company is also required.
◼ People started work for getting their own
name and business registered.
◼ Requirement of funds.
Preparation of Documents
◼ Memorandum of the company
◼ A document that contains Name, address,
objective and capital of the company.
◼ Articles of association
◼ A document that contains rules and
regulations of the company.
◼ Prospectus
◼ Prospectus is an initiation for offer.
Incorporation Stage
◼ All the documents will be filed to the registrar
joint stock companies to seek permission for
the business along with the registration fee.
◼ Experts will examine these documents and
make sure that all claims are justified or not.
◼ If they are satisfied, a certificate of
incorporation will be issued to the company.
Collection of Capital
◼ Promoters will inform the general public that
business is going to be started.
◼ They will ask the people to invest in the
business.
◼ This is capital subscription stage.
◼ Share or stock is the smallest unit of
investment.
◼ Stock exchange is a market where people
exchange their shares.
◼ Debenture is a kind of loan which is acquired
from the market.
◼ Certificate of commencement is issued by the
Government when commencement of
business is allowed.
Clauses of Memorandum of
Association
◼ Name of the business
◼ We cannot suggest a name that has already
been registered.
◼ We cannot suggest a name after our National
Heroes.
◼ Registered office of the company.
◼ Objective clause of the business.
Clauses of Memorandum of
Association
◼ Authorized capital of the company.
◼ Liability clause
◼ Liability of the investor is limited to the extent
of investment in the business.
◼ Association clause.
Articles of Association
◼ Share capital of the company.
◼ Procedure to change the capital.
◼ Procedure for meetings.
◼ Procedure for voting.
◼ Appointment of directors.
◼ Directors are the officials of the company who
are appointed to run the affairs of the
business.
Articles of Association
◼ Duties and authorities of directors.
◼ Rights of shareholders.
◼ Meetings.
◼ Meeting of shareholders.
◼ Meeting of directors.
◼ Disqualifications.
◼ Seal of the company.
◼ Distribution of dividend.
◼ Profit distributed among shareholders is called
dividend.
Articles of Association
◼ Decision for retained earnings.
◼ Retained earning is a part of the profit retained
by the company for future operations.
◼ Appointment of auditors.
◼ Winding up of companies.

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