CBSE Questions for Class 11 Commerce Business Studies Formation Of A Company Quiz 5 - MCQExams.com

Memorandum of Association is the principal document that is required in the formation of the company as it is considered as the Charter of the company. It contains the powers, goals, and objectives of a joint-stock company which defines the scope of operations within which the members of the company will operate. Memorandum of association provides the information to outsiders such as suppliers, creditors, investors, etc. so they can know about the objectives and scope of a company. This document is essential for the formation of a company. Whereas, the Article of Association is a document that contains the rules and regulations regarding the management of a company’s internal affairs. 

• To commence with the operation of a company, the directors of that specific company must acquire a Director Identification Number and the proposed name has to be approved by the Registrar of Companies in Ministry of Corporate affairs.
  
• As per the Companies Act, for a Company name to be approved for the incorporation, it must be both unique and desirable.
  
• The company name shall not be identical or even closely identical to any of the existing company name, to be approved by the Registrar of Companies.
  

• Name should be in consonance with the principal object
  
• Names indicative of business constitution not allowed
  
• Vague or abbreviated name are not allowed
  
• Generic names will not be allowed
  
• Names that require Central Government approval needs an approval before they can be used.