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101.

Explain the steps in the incorporation stage.

Answer» Incorporation of a company’ means to register the company under the provisions of the Companies Act, 1956.Steps to be followed for the registration of a company are as follows :
1.Application for registration : An application in the prescribed format, duly signed by all the partners is to be submitted to the registrar of companies, containing the following information :
(i) Name of the company.
(ii) Location of the company.
(iii) Memorandum of association.
(iv) Articles of association.
(v) Written consent of directors.
(vi) Names and addresses of the directors.
(vii) Statutory declaration announcing that all the information is true and all the requirements of the act have been duly fulfilled.
2.Fees : Required amount of fees is to be deposited with the registrar of companies.
3.Issuance of certificate : When the registrar issatisfied with all the formalities, he enters the company’s name in the register and issues a certificate of registration.
Discussion
102.

Define Partnership Deed. Discuss its main contents.

Answer» `A.` A partnership deed is a written document that contains terms and conditions agreed between thepartners who enter together in a partnership venture for profit making.
`B.` Having a partnership deed ensures that potential disputes are avoided by clearly defining theterms of mutual agreement.
The partnership deed normally has the following contents :
1. Name of the firm.
2. Names and addresses of partners.
3. Nature of business.
4. Place of business.
5. Capital contributed by each partner.
6. Profit sharing ratio.
7. Duties, powers and obligations of all partners.
8. Preparation of accounts and their auditing.
9. Whether interest is payable on capital.
10. Whether interest is charged on drawings.
11. Whether interest is payable on loan provided by partner.
12. Whether salary is payable to partners.
13. Method of solving disputes.
14. Provisions regarding dissolution.
Discussion
103.

A company got its Certificate in Incorporation on 20th August , 2019 and on the certificate the date was written as 10th August , 2019 . The company allotted some shares on 18th August . Is the allotment valid or not ? Give reason in support your answer .

Answer» Yes , it is a valid allotment because though the registrar issued the certificate of incorporation on 20th August , 2019 but on the certificate 10th August was written . So in the eyes of law , the company was registered on 10th August as the certificate of incorporation is the conclusive evidence of its legal existence of the company .
Discussion
104.

Mention any two documents which are filed with the Registrar of Companies for incorporation of a company .

Answer» (i) Memorandum of Association
The Memorandum of Association or MOA of a company defines the constitution and the scope of powers of the company. In simple words, the MOA is the foundation on which the company is built. In this article, we will look at the laws and regulations that govern the MOA. Also, we will understand the contents of the Memorandum of Association of a company.
(ii) Article of Association
The AOA contains the bye-laws of the company. Therefore, the director and other members must perform their functions as regards the management of the company, its accounts, and audits in accordance with the AOA.
Discussion
105.

What is a Certificate of Incorporation ?

Answer» Certificate of Incorporation is like the birth certificate of the company . It is conclusive evidence of legal status of a company .
Discussion
106.

Merchant Ltd. Was issued certificate of incorporation by the Registrar on 10th March. However the date mentioned on the certificate was 2nd March. The company entered into a contract for purchase of land with ABC Ltd. On 5th March. Later ABC Ltd. Refused to sell the land as it was getting much higher price from another buyer. Can Merchant Ltd. file a case against ABC Ltd. Give reasons in support of your answer.

Answer» Yes as date on certificate of incorporation is 2nd March
Discussion
107.

Explain any five merits and five demerits of partnership.

Answer» Merits of partnership firm:
1.Easy to start and dissolve:A partnership firm can be setup easily and quickly. There is not much legal formalities and expenditures are involved in the establishment of a partnership. Similarly, a partnership firm can be closed down very easily and quickly.
2.higher capital:Many partners invest capitals and there is higher flexibility in capital because new partner can be agreed to be associated and investing can be increased.
3.Higher innovation:Many partners use their own ideas and innovation capacity. So there is unlimited managerial ability.
4.Reduction of work load:Partners mustn’t work more to earn more profit. Higher profit generation is important. So, there is no dull and monotonous work. In case of monotony, health problem to any partner then other partners can help and reduce absenteeism.
5.Better decision:There is specialization in decision taking. So there can be less chances of taking wrong decisions.
Demerits of partnership firm:
1.No Business secrets:The partner can keep the secrets to himself but these secrets can be known to competitors or others when there is conflict among the partners.
2.Uncertain existenceDeath of any partner can sometime cause death of entire firm. Dishonesty, conflict and lack of resource also can collapse the firm.
3.No Personal contact:A partner can’t be in a position to maintain intimate contacts with his customers and employees. He cannot be able enter to the requirements of each and every customer. Then there is no close personal touch which decreases the competitive strength of the business.
4.Unlimited liability:Proprietor is liable for all the debts of the business. In case the assets are insufficient to meet the debts, the personal property of the proprietor can be attached.
5.Delay in decisions:The partnership firm is completely not free to take all decisions and to implement the. The partners need to consult or seek others approval. Delay in decisions reduces the efficiency of business.
Discussion