Outline the incorporation process and describe the basic corporate structure
Incorporation implies the legal process that is used in order to form a corporate entity or an organisation, enterprise or a company. It gives a separate legal entity to the company which is recognized under the law. One can denote incorporated companies with terms like Inc or Limited along with their names. For a public limited company a group of at least 7 individuals are required to form the company whereas in the case of private company it takes only two individuals. Let’s analyse the steps involved in the incorporation process from the Indian context:
- The first step in selecting the form of business which one will be undertaken like partnership, corporation or proprietorship.
- The next step is choosing an appropriate name for the concern which will be further stated in the MOA of the company. If the company is a public company it’s name should end with ‘Public limited’, else it should end with ‘Private limited’.
- The next step is to establish the Memorandum of Association or MOA which is act as the rule book containing the rules, objectives, plans etc of the company. It has to include heads like Name clause, registered office information, Objects clause, Capital clause and Liability clause. The Articles of Association is a document that states the rules that will bind the internal working of the company.
- MOA, Articles of Association printing and stamping is the next essential step. Once all the above mentioned documents have been vetted by the Registrar of Companies, the MOA and other internal plans that were documented will get its final stamp of approval for go ahead.
- If the promoter requires, it can also employ a power of attorney to fulfill all the legal obligations that comes with incorporation.
- The next step is to file other important documents like E-Form 32 – consent of the directors and particulars of the directors and e-Form 18 for the notice of registered address.
- A statutory declaration for consenting to all the requirements under the Company’s act.
- The last step is the payment of registration fees and finally getting the Certificate of Incorporation as a proof that all conditions have been met.
The basic structure of the Corporate of a US company usually consists of Board of Directors and the entire management team. The Board of directors can be further divided into Chairman, inside directors and outside directors. The management team can be further divided into CEO, COO, CFO and these days a Chief wellness or happiness officer.
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