Company Registration
A public company cannot commence business until it has obtained the certificate to commence business form the register of companies Where a company has not issued prospectus
Normally, when a public company is incorporation, it may take some time before it decided to make a public offer and issue a prospectus. However, a company will comply with the require formalities and obtain the commencement of business creativity form the register as soon as possible after formation. For this purpose the following action may be taken:
Ø The company shall file a statement in lieu of prospectus in the form given in schedule III to act. this will be signed by every director of the company
Ø The director have paid the value of the share to the extent money is payable in cash with application / allotment.
Ø a duly certified declaration shall be filed with the register in revised form NO. 20 signet by a director / secretary or by secretary in practice where there is no secretary to the effect that the requirement of section 149(2) have been complied with. see also chapter 30 for the amendment made to the general rules and forms , 1995.
It is already mentioned that a business need not wait for the issue of a prospectus to obtain the certificate to commence business and hence it was stated as above that the company can go ahead by filing a statement in lieu of prospectus. However, where a company issues a prospectus immediately after formation, it need not file a statement in lieu of prospectus. on the other hand , the company shall file a declaration in revised form NO.19 signed as above and file it was the register to the effect that the requirement of section 149(1) have been complied with . Please see chapter 30 for text of revised form Company Registration.
The register on perusal of the declaration in the revised forms no .19 or 20 and the statement in lieu of prospectus, where applicable, shall certify that the company is entitled to commence business and exercise borrowing powers
