Commencement of Business by a Public Company Essay Example

vidence of entitlement to commence business. However, if no public prospectus has been issued, the registrar will only grant the certificate upon filing a statement in lieu of prospectus.

Upon receiving a duly verified declaration from the company before its commencement date, any contracts made by the company will be considered provisional and non-binding. These contracts will only become binding on the commencement date.The regulations in this section do not apply to private companies or companies limited by guarantee without share capital. However, it does not prohibit the simultaneous offering of shares, debentures or receiving payments for debenture applications. If a company starts its operations or borrows money in violation of these regulations, individuals responsible will be fined up to one thousand rupees per day of continuous violation along with any other liabilities.