Class 11 Business Studies Important Chapter 7 Formation of a Company

Class 11 Business Studies Important Chapter 7 Formation of a Company Solutions English Medium As Per AHSEC New Syllabus to each chapter is provided in the list so that you can easily browse through different chapters ASSEB Class 11 Business Studies Important Solutions and select need one. AHSEC Class 11 Business Studies Additional Notes English Medium Download PDF. HS 1st Year Business Studies Important Solutions in English.

Class 11 Business Studies Important Chapter 7 Formation of a Company

Also, you can read the NCERT book online in these sections Solutions by Expert Teachers as per Central Board of Secondary Education (CBSE) Book guidelines. ASSEB Class 11 Business Studies Additional Question Answer are part of All Subject Solutions. Here we have given HS 1st Year Business Studies Important Notes in English for All Chapters, You can practice these here.

Formation of a Company

Chapter: 7

Part – II: Corporate Organisation, Finance and Trade

IMPORTANT QUESTION AND ANSWER

Short Type Question and Answer:

1. What is meant by the promotion of a company?

Ans: Promotion is the process of identifying a business opportunity and taking steps to form a company. It includes conducting feasibility studies, gathering resources, finalizing a name, and preparing legal documents.

2. Who are promoters?

Ans: Promoters are individuals or groups who take initiative to form a company. They analyze business feasibility, assemble resources, appoint professionals, and perform necessary formalities to establish the company.

3. Mention any two functions of a promoter.

Ans: (i) Identification of business opportunity.

(ii) Conducting feasibility studies (technical, financial, economic).

4. What is a Memorandum of Association?

Ans: It is a fundamental document defining a company’s objectives and scope of activities. A company cannot perform activities beyond the objects specified in its MOA.

5. What is the Articles of Association?

Ans: It is a document containing the internal rules and regulations of the company related to management, governance, and operational processes.

6. Define Certificate of Incorporation.

Ans: It is the official certificate issued by the Registrar of Companies confirming the formation of a company. It marks the company’s legal existence.

7. State the difference between preliminary and provisional contracts.

Ans: (i) Preliminary Contracts: Signed before incorporation; not binding unless ratified later.

(ii) Provisional Contracts: Signed after incorporation but before the commencement of business.

8. Why is the Certificate of Incorporation considered conclusive evidence?

Ans: Once issued, even if there were any irregularities in registration, the company’s existence cannot be questioned. The company legally exists from the date mentioned in the certificate.

9. What do you mean by ‘Minimum Subscription’?

Ans: Minimum subscription refers to the minimum percentage (90%) of shares that must be subscribed by the public before shares are allotted.

10. What is a prospectus?

Ans: A prospectus is a document issued by a public company inviting the public to subscribe to its shares or debentures.

11. Explain Return of Allotment.

Ans: It is a statement filed with the Registrar of Companies containing details of shares allotted, signed by a director or secretary within 30 days of allotment.

12. What is Director Identification Number (DIN)?

Ans: DIN is a unique identification number issued by the central government to individuals who wish to become directors in a company.

13. What is the significance of the name clause in MOA?

Ans: It specifies the company’s legal name, which must not be identical or too similar to an existing company’s name.

14. Explain the term ‘underwriter’.

Ans: Underwriters are agencies that guarantee the subscription of a company’s shares. If shares remain unsold, they purchase the remaining shares themselves for a commission.

15. Why is SEBI’s approval required before public issue?

Ans: SEBI’s approval ensures transparency, full disclosure of information, and protection of investors’ interests before a public issue.