Preparation of Documents for Forming Joint Stock Company
A company is an artificial and fecal person. It is invented by law and is also dissolute by law. These companies are being got registration by the Companies Act, 1994. For the Companies of maximum countries have one registrar. He has given registration to those companies that are formulated and established by law and upon the law. He also gave Certificate of Incorporation on the basis of these. The formalities, in case Public Companies, are more as compare to other companies.
Preparation of Documents:
After conducting the first steps, the initiators prepare the important and legal documents for the company. Among these documents the Memorandum of Association. Articles of Association are very much important. The descriptions about these are placed below:
(a) Memorandum of Association: It is a real or legal document, certificate, or status of the company. The description about the company (Name), an address of the registered building, motto and objective, amount of the capital, description about the responsibility of shareholders and their contribution etc are written down and the signature of the initiators are put down in the memorandum. In the Companies Act 1994, section no 6 (A) mentioned;
- The Name of the company at the end of the name the word ‘Limited’ is to be added.
- Address of the registered office.
- Objectives of the company and for a non-business organization the objective and the region of activity required to be indicated.
- The number of chairs and the face value of each share.
- The interpretations of ‘the liability of shareholders are confined by their brought shares’ is required to be written.
(b) Articles of Association: The second more important document for Joint Stock Company is Articles of Association. The document that contains all rules and regulations regarding daily activity and internal management of the company is called articles of Association for the Joint Stock Company. Generally, to implement the objectives properly that are mentioned in the memorandum of association are written in the Articles of Association. Generally, Articles of Association is adopted for the following purposes:
- To operate the daily activity of the company properly.
- To explain the rules & regulations regarding company’s internal functions.
- To distribute the company’s capital on the basis of the classification of the company’s shares.
- To describe and explain the sections and clauses of the Memorandum of Association.
- To determine and explain the power, duty, responsibility, right and mutual relationship of the directors.
- To determine the recruitment, salary, power, and responsibility of the executives.
- To integrate the-rules regarding meetings held by the company.
- To reserve the security of the company’s seal or logo.
- To explain and estimate the dividend policy of the company.
- To explain the method of the dissolution of the company etc.