Formation of AL-AMIR Textile Company
Ø Company
L.H. Haney states, a company is voluntary association of many individuals for profit, having a capital divided into transferable shares, the ownership of which is the condition of membership.
We will make AL-AMIR Textile Company; the company formation is possible under four stages which are under given below.
· Promotion
· Incorporation
· Subscription
· Commencement of business
Ø Promotion stage AL-AMIR Textile Company
The promoters do the basic work f or starting an industrial or commercial business on corporation basis. The promoters certain documents and comply with the rules stated in the company ordinance 1984.
Ø Promoters
· Muhammad Ishtiaq Ahmed
· Shahid Anjum
· Muhammad Ashfaq
· Business plan
A person discovers the ideas and hopes that there are possibilities of a business. The idea may relate to new or an existing business. The idea is based upon experience or observation of expert in field of business.
· Analyses of Plan
The promoter can prepare estimate estimate about the cost of land, building and machinery, labor, raw materials and financial basis. The success of business depends upon careful analyses.
· Seeking opinion
The view of the consultants must be given due importance while preparing the final draft. The success of business is linked with the exact calculations of the business programmed.
· Collecting resources
The promoters can assemble business resources and factors of production. The promoters make some contracts with the suppliers of raw materials and machinery.
· Payment of expenses
The initial expenses of the business are paid by promoters. The preparation of memorandum of association, article of association and prospectus, registration fee depend upon money.
· Filing papers
The papers to be filed are ;( 1) MOA ;( 2) AOA; (3) statutory declaration that legal requirements have been compiled with (4) original copies of treasury Chillan.
Ø Incorporation stage AL-AMIR Textile Company;
· Name
The name of the company is proposed by promoters. The name should be different from other existing companies like AL-AMIR Textile Company. The name must be suggesting the patronage of any head of state.
· Documents
Documents are filed are
1. list of directors with their consent with in 7 days of issue of certificate of incorporation
2. Notice of situation of company registered office.
3. Prospectus on or before the date of its publication.
· Fee
The public company shall pay amount of duty on share capital and the prescribe fee of filling documents. The amounts are paid in a government treasury.
· Certificate
The registrar issues a certificate of registration; it is also called a certificate of incorporation. The company becomes a legal person from the date of registration.
· Address
After the incorporation the management must inform the registrar in writing about registered office of company with in 28 days.
Ø Subscription stage
A private company can commence business on receipt of certificate of incorporation however an AL-AMIR Textile Company has to fulfill another requirement of subscription to obtain the certificate of commencement of business. The subscription stage is connected to following steps.
· A prospectus has been issued inviting the public to subscribe for the shares.
· Where no prospectus has been issued, a statement in lieu of prospectus has been filed with the registrar.
Raising capital of AL-AMIR Textile Company
In subscription stage AL-AMIR Textile Company; raise capital from banks, likes BANK ALFALAH, MCB, ALLIED BANK, NATIONAL BANK etc.
Ø Commencement stage of AL-AMIR Textile Company
· Shares
The shares payable in cash have been allotted. The amount has been raised by issue of shares for,
1. Purchase of property.
2. Preliminary expenses.
3. Underwriting commission.
4. Money borrowing.
5. Working capital.
6. Other expenses.
· Directors
The directors must purchase the shares. Every director is bound to buy at least one share and how can not purchase share cannot become director.
· Declaration
A declaration is given that all conditions have been completed. It may be minimum subscription has been collected, the director have paid share money is full and the amount of subscription cannot be refunded.
· Business certificate
The registrar must satisfy himself that all requirements for the start of business have been .then he can issue a certificate of commencement of business.
Ø Legal requirements for formation of AL-AMIR Textile Company;
There are three legal requirements to formation of AL-AMIR Textile Company.
· Memorandum of Association
· Article of Association
· Prospectus
Now we discuss every document with details and every requirement has its own legal existence.
Ø Memorandum of Association (MOA)
o Definition (sec.15)
The memorandum of Association is a document which regulates a company’s external activities and constitution and which must be drawn up at the formation of a company.
The charter of every company is Memorandum of association and it makes the relationship between company and general public.
Ø Clauses of Memorandum of Association
· Name
· Situation
· Liability
· Capital
· Association
Ø Articles of Association (AOA)
o Definition (sec.26)
The articles of association are documents that governs the running a company, it sets out voting rights meetings, power of the management.
o Explanation
The articles of association are the bye-laws of the company, these are the rules to manage the internal affairs of the company and to achieve objects stated in memorandum .the articles are sub-ordinate to the memorandum of association.
Ø Contents of Articles of Association
Now we discuss the contents of Articles of Association these are given below,
· Share capital and its division into different classes.
· Rights of various classes to shareholders.
· Procedure for making the call on shares.
· Transfer of shares from seller to the buyer.
· Transmission of shares to legal heirs.
· Alteration of shares capital.
· General meeting of the company.
· Notice and proceedings of general meeting.
· Voting powers of the members.
· Appointment of the directors.
· Power and duties of directors.
· Seal of the company.
· Disqualification of directors.
· Proceeding of directors meeting.
· Filling of vacancies.
· Dividends and reserves.
· Accounts and their audit.
· Notices to be issues by a company.
· Winding up of a company.
· Indemnity to be paid to company officer or agent.
Ø Prospectus of AL-AMIR Textile Company
o Definition
That prospectus is a document that gives details about a new issue of shares and invites the public to buy shares or debentures in the company.
A prospectus is a notice to general about the formation of a new company. A company tries to attract the people that there is best opportunity for investment I the shares and debentures.
Ø Contents of Prospectus
· Memorandum
· Description of business
· Directors remuneration
· Names of management
· Application money
· Payment to Promoters
· Auditors Report
· Interest in Capital
· Interest In Subsidiaries
Ø Statement in Lieu of prospectus
A company having a share capital which does not issue a prospectus on or with reference to its formation, there has been delivered to the registrar for registration a statement in lieu of prospectus signed by every person who is names therein as a director or proposed director of the company or by his agent authorized in writing in the prescribed form.
Assignment
CORPORATE &BUSINESS LAW
FORMATION OF PUBLIC COMPANY
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