A company is registered with the:

Registrar of Companies. The ROC incorporates companies.

Minimum promoters needed for a public company:

7. A public company requires at least seven.

Minimum promoters for a private company:

2. A private company needs at least two promoters.

A company formed for an unlawful purpose is:

Not allowed. It must be for a lawful purpose.

In an unlimited company, members are liable for:

Entire debts of the company. Liability is unlimited.

Maharashtra State Board · HSC Commerce · Class 11 (Std XI)

Class 11 Secretarial Practice Chapter 3: Formation of a Company

Short notes, key concepts, quick revision and practice MCQs with answers

A company is formed by registering it with the Registrar of Companies (ROC) in the state where its registered office is located, following the Companies Act, 2013.

Key concepts: Formation of a Company

Registrar of Companies: The authority that incorporates companies under the Act.
Minimum promoters (Section 3): Public company: 7. Private company: 2. One Person Company: 1.
Types by capital structure: Company limited by shares, company limited by guarantee and unlimited company.
Limited by shares: Capital collected by issuing shares; liability limited to unpaid face value.
Limited by guarantee: Members guarantee to contribute a fixed amount at winding up.
Conditions: Company must be formed for a lawful purpose and all promoters must subscribe their names to the memorandum.

Quick revision: important points

Formation means registering or incorporating the company with the ROC.
Unlimited company: members are liable for the whole debt.
Certificate of Incorporation is conclusive proof of registration.

Practice MCQs with answers

A company is registered with the:
1. Registrar of Companies
2. Police
3. RBI
4. Municipality
Show answer
Answer: A. Registrar of Companies
The ROC incorporates companies.
Minimum promoters needed for a public company:
1. 1
2. 2
3. 7
4. 50
Show answer
Answer: C. 7
A public company requires at least seven.
Minimum promoters for a private company:
1. 1
2. 2
3. 7
4. 10
Show answer
Answer: B. 2
A private company needs at least two promoters.
A company formed for an unlawful purpose is:
1. Not allowed
2. Allowed
3. Always tax free
4. Government owned
Show answer
Answer: A. Not allowed
It must be for a lawful purpose.
In an unlimited company, members are liable for:
1. Entire debts of the company
2. Nothing
3. Only 1 rupee
4. Only wages
Show answer
Answer: A. Entire debts of the company
Liability is unlimited.

All Class 11 Secretarial Practice chapters

Class 11 Secretarial Practice notes: all chapters