Formation Of A Company

A company is formed under following stages.

Promotion,

Incorporation,

Subscription,

Commencement of business.

Documents required to be submitted during formation

MoA:

It is the most important document because it defines the objective of a company. No company can start its business unless it has prepared MoA, it has following clauses

Name clause,

Registered office clause,

Objective clause, (Main clause, other clause)

Liabilities clause,

Association clause,

Capital clause.

AOA:

It is related to the rules regarding internal management of the business. A company can adopt table A as companies act if it has not prepared AOA. It contains rules related to salary, interest, work hours, holidays etc.

 

Concent as proposed director:

The signatories of MOA becomes first director of the companies, a return consent from such person is require assigning that they agree to be the directors of the company.

Statutory Declaration:

A legal declaration is made by the company stating that all the legal requirement have been fulfilled, this has to be signed by an advocate of high court.

Payment of fees:

Along with all the documents of fee has to paid the registrar, the fee depends upon authorise share capital of the company.

After completing the above formalities the promoter appreciations jar incorporation of company. If the registrar is satisfied he will issue the certificate of incorporation.

Subscription of capital:

On the issue of certificate of incorporation a private company can immediately start the business; a public company however has to go two more steps. A public company has to follow following process.

SEBI approval (Security Exchange Board of India):

SEBI is the regulatory authority which control stock exchange, a company initiates funds from general public for which it has to provide whole information about the business to SEBI. If SEBI is satisfied it will give an approval. This is important to safeguard the interest of the customers and the investors.

Filling of prospects:

The second step is to file the prospects. This prospects is a notice on circular defining the activities of business and inviting investors.

SEBI and registrar approval is required company is supposed to give free and full information in the prospectus.

Appointment of bankers, brokers, underwriters:

Once prospectus has been issued public starts sending appreciate money. A banker is appointed who is responsible for collecting application money. Company will also appoint a broker who will control the stock market activities, order writers undertake to purchase shares if they are not purchased by the investors.

Minimum subscription:

SEBI asks the companies to receive applications for minimum no. of shares according to the company act. This is known as minimum subscription, the limit is 90% of the issued capital if this amount of shares has been insured then the shares can be allotted.

Applications of stock change:

An application is sent to the stock exchange for allowing the company deal in financial security, once the stock exchange gives this permission shares are allotted. This permission should be given within 10days of closure of company.

Allotment of shares:

Allotment letters issued to those shareholders who have been successfully given the permission.

Commencement if business:

When the subscription is done the public company applies to the registrar of the company to issue certificate of commencement of business, following documents are required:

A declaration that the shares has been subscribed and minimum has been done.

A declaration that every director have agreed and subscribes the shares.

A declaration that no money is outstanding & all payment have been made.

A statutory elect oration that all the above requirement have been compiled.

The registrar will examine their document if satisfactory , then certificate of commencement will be issued & business can be started.

International Trade

International trade deals with the exchange of words & services between two nations.

This trades shares buyers & sellers of dills rationality. It helps in preen exchange.

There three types of international trade:

Export,

Import,

Centerport

Export trade:

Export involves selling the goods to different country. It involves following processes.

Received of inquiry/ receipt and sending quotation:

The first step in export procedure involves the prospective buyers sending an inquiry to different exporters. He requests them to send information regarding twice quality & terms & conditions for export of goods. In response to the inquiry exporter sends quotation. Quotation is known as technical Performa invoice. This invoice contains information required by the importer.

Receipt as an indent:

The importer/ prospective buyer will compare different invoice be places an order, which is known as indent. Indent is document which contains description for the goods ordered, prices to be paid, delivery terms, packet etc.

Assessing importers credit worthiness and securing a guarantee for payment:

After receiving the order the exporter makes an inquiry about the credit worthiness of importer. Most exporters demand of letter of credit from importer. This letter is prepared by importers bank.

Obtaining export license:

The forth step involves of compliance of regulation. The first made it to get a license. In accordance to the laws, to get a license exporter has to open an account with any bank authorised by the central bank. After opening the account exporter has to obtain import export code from directorate general of direct trade. He is given a license after exporter fulfills all the formalities.

Obtaining preshipment finance:

After fulfilling all the legal requirements exporter approaches his bank for preshipment finance. This is a finance which exporter uses for getting raw material & other components this money is used for packaging and transporting as well.

Production and procurement of goods:

The exporter has to prepare the goods as per specification of importer. The firm can itself manufacture the goods as it can buy the product from the market.

Preshipment inspection:

The gov. of India has situated no. of projects to ensure that the quality of goods exported from India is high if the quality is not high standard export license is cancelled. This is done under inspection quality control & inspection act. The preshipment certificate is given by EIA- Export Inspection Agency.

Excise clearance:

According to central excise clearance act, excise duty is payable on the materials used in the goods. For this process the exporter has to apply to excise commissioner. Sometimes same goods are exempted from the tax, the basic idea of tax is to provide security & ensure quality of goods.

Obtaining certificate of origin:

This is a certificate which confirms that the goods have actually been manufacture in the country from where export is taking place. These has two benefits- i) There cannot be any neanupilation & ii) some countries get concern in tarries/ if there is a trade treaty.

Reservation of shipping space:

The exporting term applies to the shipping company for provision of shipping space. Information about the product such as quantity, quality, date of shipment & port of destination has to be provided when the shipping company accepts the application shipping company issues shipping order.

Packing & forwarding:

The goods are properly packed and marked with necessary details, exp- name & address of the importer, weight port of shipment & destination. The exporter now makes arrangement for transportation of goods to the port. The exporter uses all the documents for getting the goods placed in the ship.

Insurance of goods:

The exporter gets the goods insured with an insurance company to protect against risk of damage.

Custom clearance:

The goods must be cleaned from the custom before they are loaded on the ship. For custom clearance shipping bill is required. This is the main document on the basis of which custom office give permissions for exports. 5copies all the bills are required along with following documents:

Export order- indent,

Letter of credit- credit worthiness,

Performa invoice- quotation,

Certificate of origin-  machine insurance policy.

Obtaining mate receipt:

When the company is satisfied with all the documents, it ensures a casting order, which is an order to the staff at the gate of the port to permit entry of the goods inside the dock.