Formation Of A Company - Class 11 Commerce Business Studies - Extra Questions

Write short notes on the Promoter.

A corporate promoter is a firm or person who does the preliminary work incidental to the formation of a company, including its promotion, incorporation, and flotation, and solicits people to invest money in the company, usually when it is being formed.
A promoter is someone who conceives the idea of any business and work to make it successful.


Write the role or functions of a promoter in the formation of a company.

While the earlier Companies Act, 1956 did not define the word “Promoter”, the Companies Act, 2013 makes an attempt in doing so. Section 2(69) of the Companies Act, 2013 defines the term promoter as a person-

Who has been named as such in a prospectus or is identified by the company in the annual return referred to in section 92; or Who has control over the affairs of the company, directly or indirectly, whether as a shareholder, director or otherwise; or In accordance with whose advice, directions or instructions the Board of Directors of the company is accustomed to act.
Typically the work of the promoter ends when he hands over the control of the company to the directors of the incorporated company. The promoter has no statutory relation to the company. However, it has now well established that a fiduciary relationship exists.

The role and responsibility of the promoter are that of promoting a company or incorporating it. Once a company is formed, it becomes an independent entity and is now controlled by the board. There is no need for promoters to formally hand over the control to the board of directors. Once the company is formed the board of directors automatically take control of the company and the status of the promoters terminates there. However, mostly the promoters are the persons who eventually become the directors and hence it is only the change of designation rather than a real transfer of control.


Distinguish Between Certificate of Incorporation and Trading Certificate.

Certificate of Incorporation:- A certificate of incorporation is a legal document relating to the formation of a company or corporation. Usually contains :
1) Name of the state 2) Business code 3) Company name 4) Company legal address 5) Quantity of Authorized share of stock 6) Value of the shares of stock. 7) The main purpose of the business.
Trading certificate:- Before trading, all public companies will need to apply for a trading certificate. Private companies do not need to apply for a trading certificate and are therefore able to trade as soon as a Certificate of Incorporation.


What do you mean by formation of company.

Company formation is the process of incorporating a business. Upon incorporation, a private limited company becomes a separate legal entity; an ‘individual’ that is completely distinct from its owners and responsible for its own finances, assets and liabilities.


Write short notes on the Promotion stage.

Promotion is the first stage in the formation of a company. The term ‘Promotion’ refers to the aggregate of activities designed to bring into being an enterprise to operate a business. It presupposes the technical processing of a commercial proposition with reference to its potential profitability.
Promotion of a company refers to the sum total of the activities of all those who participate in the building of the enterprise upto the organisation of the company and completion of the plan to exploit the idea. It begins with the serious consideration given to the ideas on which the business is to be based.


Define Memorandum of Association and explain its importance.

According to Section 2(56) of the Companies Act 2013, the “Memorandum” refers to the memorandum of the company as drawn up initially during the formation of the company or as changed periodically to carry out any action as per any other law of the Act.
Memorandum of Association is a document of prime importance for a company. It depicts the objectives, extent of authority, competency, liabilities and legal rights of the company. The Memorandum acts as a legal code or constitution for a company and regulates the relationships between the company and its shareholders, investors, beneficiaries and other members.


Distinguish between the Certificate of Incorporation and Certificate of Commencement of Business (Trading Certificate).

An incorporation certificate is a legal document required at the time of the formation of the company. In other words, an incorporation certificate is a license issued by the state government in order to form a company, While
Certificate of Commencement of Business is required by the public company before starting its business operations.

As per the Companies Amendment Act, 2015, Certificate of Commencement of Business is no longer required. 


Essay Type Question.
Define promotion. What are the steps in promotion?

According to C.W. Grestembeg, “Promotion may be defined as the discovery of business opportunities and the subsequent organisation of funds, property and managerial ability into a business concern for the purpose of making profits therefrom.”
Promotion is the first stage in the formation of a company. The term ‘Promotion’ refers to the aggregate of activities designed to bring into being an enterprise to operate a business. It presupposes the technical processing of a commercial proposition with reference to its potential profitability.
Promotion of a company refers to the sum total of the activities of all those who participate in the building of the enterprise upto the organisation of the company and completion of the plan to exploit the idea. It begins with the serious consideration given to the ideas on which the business is to be based.

After thoroughly examining the feasibility of the idea, the promoters assemble resources, prepare necessary documents, give a name and perform various other activities to get a company registered and obtain the necessary certificate enabling the company to commence business.


Essay Type Question.
Who is promoter? Explain the role played by him in the promotion?

A corporate promoter is a firm or person who does the preliminary work incidental to the formation of a company, including its promotion, incorporation, and flotation, and solicits people to invest money in the company, usually when it is being formed.
Promoters generally owe a duty of utmost good faith, so as to not mislead any potential investors, and disclose all material facts about the company's business.
Apart from conceiving a business opportunity the promoters analyse its prospects and brings together the men, materials, machinery, managerial abilities and financial resources and set the organisation going. After thoroughly examining the feasibility of the idea, the promoters assemble resources, prepare necessary documents, give a name and perform various other activities to get a company registered and obtain the necessary certificate enabling the company to commence business.


Define Article of Association. Write the contents of Article of Association. 

The Articles of Association is a document that specifies the regulations for a company's operations and defines the company's purpose. The document lays out how tasks are to be accomplished within the organization, including the process for appointing directors and handling of financial records.

Contents Of Articles Of Association
Articles usually contain provisions relating to the following matters-
1. Share capital including sub division thereof, rights of various shareholders, the relationship of these rights, payment of commission, share certificates,
2. Lien of shares
3. Calls on shares
4. Transfer of shares
5. Transmission of shares
6. Forfeiture of shares
7. Surrender of shares
8. Conversion of shares into stock
9. Share warrant
10. Alteration of capital
11. General meetings and proceedings thereat
12. Voting rights of members, voting by poll, proxies
13. Directors, including first directors or directors for life, their appointment, remuneration, qualifications, powers and proceedings of Board of directors’ meetings
14. Dividends and reserves
15. Accounts and audits
16. Borrowing powers
17. Winding up


Distinguish between:
Memorandum of Association and Articles of Association

The memorandum of association and articles of association are the two charter documents, for setting up of the company and its operations thereon. ‘Memorandum of Association‘ abbreviated as MOA, is the root document of the company, which contains all the basic details about the company. On the other hand, ‘Articles of Association‘ shortly known as AOA, is a document containing all the rules and regulations designed by the company.


Write short notes on the following :
Memorandum of Association.

An important step in the formation of a company is to prepare a document called Memorandum of association. It is the charter of the company and is very important document as it contains the basic conditions on which the company is incorporated.
The Memorandum contains the name, registered office, main and other objects of the company, liability of the members and the authorized capital of the company. The main purpose of the Memorandum is to limit the scope of activities and powers of the company. Thus, any act outside the Memorandum is ultra-vires the company. Such an act is not enforceable and directors involve personal liability for it.


Write short notes on the following :
Contents of Articles of Association.

CONTENTS OF ARTICLE OF ASSOCIATION---
  1. Share capital including sub-division, rights of various shareholders, the relationship of these rights, payment of commission, share certificates.
  2. Lien of shares: Lien of shares means to retain possession of shares incase the member is unable to pay his debt to the company.
  3. Calls on shares: Calls on shares include the whole or part remaining unpaid on each share which has to be paid by the shareholders on the company’s demand.
  4. Transfer of shares: The articles of association include the procedure for the transfer of shares by the shareholder to the transferee.
  5. Transmission of shares: Transmission includes devolution of title by death, succession, marriage, insolvency, etc. It is not voluntary but is in fact brought about by operation of law.
  6. Forfeiture of shares: The articles of association provide for the forfeiture of shares if the purchase requirements such as paying any allotment or call money, are not met with.
  7. Surrender of shares: Surrender of shares is when the shareholders voluntary return the shares they own to the company.
  8. Conversion of shares in stock: In consonance with the articles of association, the company can convert the shares into stock by an ordinary resolution in a general meeting.
  9. Share warrant: A share warrant is a bearer document relating to the title of shares and cannot be issued by private companies; only public limited companies can issue a share warrant.
  10. Alteration of capital: Increase, decrease or rearrangement of capital must be done as the articles of association provide.
  11. General meetings and proceedings: All the provisions relating to the general meetings and the manner in which they are to be conducted are to be contained in the articles of association.
  12. Voting rights of members, voting by poll, proxies: The members right to vote on certain company matters and the manner in which voting can be done is provided in the articles of association.
  13. Directors, their appointment, remuneration, qualifications, powers and proceedings of the boards of directors meetings.
  14. Dividends and reserves: The articles of association of a company also provide for the distribution of dividend to the shareholders.
  15. Accounts and Audits: The auditing of a company shall be done subject to the provisions of the articles of association of the company.
  16. Borrowing powers: Every company has powers to However, this must be done according to the articles of association of the company.
  17. Winding up: Provisions relating to the winding up of the company finds mention in articles of association of the company and must be done accordingly.


Essay Type Questions:
What is Articles of Association? Enumerate its contents.

The Articles of Association is a document that specifies the regulations for a company's operations and defines the company's purpose. The document lays out how tasks are to be accomplished within the organization, including the process for appointing directors and handling of financial records.

Contents Of Articles Of Association
Articles usually contain provisions relating to the following matters-
1. Share capital including sub division thereof, rights of various shareholders, the relationship of these rights, payment of commission, share certificates,
2. Lien of shares
3. Calls on shares
4. Transfer of shares
5. Transmission of shares
6. Forfeiture of shares
7. Surrender of shares
8. Conversion of shares into stock
9. Share warrant
10. Alteration of capital
11. General meetings and proceedings thereat
12. Voting rights of members, voting by poll, proxies
13. Directors, including first directors or directors for life, their appointment, remuneration, qualifications, powers and proceedings of Board of directors’ meetings
14. Dividends and reserves
15. Accounts and audits
16. Borrowing powers
17. Winding up,


Write short answer for the following:
How the Articles of Association be altered?

The Articles of Association may be changed by the shareholders passing a special resolution in a general meeting or by written resolution. A copy of the resolution and the new articles of association must be sent to Companies House within 15 days. The changes to the Articles of Association cannot be made in breach of other company law rules and there are protections against such changes where they increase the liability of individual shareholders, vary the rights of any class of shareholders or otherwise prejudice minority shareholders.


Write short notes on the following :
Contents of Memorandum of Association.

Contents of Memorandum of Association.
(1) Name clause: The name of the proposed company is mentioned in this clause. The name of a company must end the word ‘Limited’ in the case of a public company and the words ‘Private Limited’ in the case of a private company. The name should not be identical with the name of any existing company. The name should not create an impression that the company is carrying on the business of some other existing company. The name should not be misleading.

(2) Registered office clause: The name of the ‘State’ in which the registered office of the company is to be situated is mentioned in this clause. This clause determines the jurisdiction of the Registrar of Companies and the court. This clause also ascertains the nationality of the company. The full address of the registered office must be communicated to the Registrar of Companies for future communication.

(3) Object clause: This clause states the object with which the company is proposed to be established. A company is not legally entitled to do any business other than that specified in its clause.

(4) Liability clause: This clause states the nature of liability of the members of the company:

(a) In case of a company limited by shares, members’ liability is limited to the face value of the shares.

(b) In case of a company limited by guarantee, the liability clause must state the extent of liability of each individual member in the event of its being wound up.

(c) In case of an unlimited company, the liability clause does not appear in the memorandum of association.

(5) Capital clause: This clause states the total capital of the proposed company. The amount of capital as stated in the memorandum is known as the authorized capital of the company. A company cannot collect funds exceeding the authorized capital.



Write short notes on the following :
Alteration of Memorandum of Association.

A Company may, by Special Resolution alter its Memorandum of Association. so as to change the place of its Registered Office from one State to another, or with respect to the objects of the Company so far as may be required to enable it and filing it with a central government who have given their power to the registrar.


Write short notes on the following :
Articles of Association

The Articles of Association are concerned with the internal management of the company and aims at carrying out the objectives as mentioned in the Memorandum. These define the company’s purpose and lay out the guidelines of how the task is to be carried out within the organization. The articles of association cover the information related to the board of directors, general meetings, voting rights, board proceedings, etc.
The Articles of Association can be considered as the user manual for the organization that comprises of the methodology that can be used to accomplish the company’s day to day operations. This document is a binding on the shareholders and the organization and has nothing to do with the outsiders. Thus, the company is not accountable for any claims made by any external party.


Essay Type Questions:
Define Memorandum of Association and describe the clauses of memorandum.

A Memorandum of Association is a legal document prepared in the formation and registration process of a limited liability company to define its relationship with shareholders. The is accessible to the public and describes the company’s name, the physical address of the registered office, names of shareholders and the distribution of shares. The Memorandum of Association and the Articles of Association serve as the constitution of the company.
Memorandum of association must have the following clauses:

1. Name Clause:
A Company is a legal entity. So, it must have a name to establish its identity. Name Clause in the Memorandum of Association confers protection against subsequent company registration in the same or closely similar name. It secures to the company monopoly of corporate trading under a particular name.
2. Situation Clause:
Memorandum of Association must state the name of the State in which the registered office of the company is to be situated. It will fix up the domicile of the company. Address of the registered office of the company need not be mentioned in the Memorandum of Association.
3. Objects Clause:
It is the most important clause in the Memorandum of Association. It defines and limits the scope of operations of the company. It explains to the members the scope of activity of the company where their capital will be employed. It gives protection to the shareholders by ensuring that the funds raised for specified businesses are not going to be risked in another.
4. Liability Clauses:
Liability clause mentions the liability of members of the company- In case of a company limited by shares, Memorandum of Association must have a clause to the effect that the liability of the members is limited to the extent of the amount of the unpaid portion of the shares held by him.
5. Capital Clause:
Memorandum of Association of a limited company having share capital (i.e. company limited by shares or company limited by guarantee having share capital) must also state the amount of share capital with which the company is to be registered which is usually called authorized or nominal capital.
6. Association Clause:
This clause states that the persons subscribing their signatures at the end of the Memorandum are desirous of forming themselves into an association in pursuance of the Memorandum.


Write short notes on the following :
Alteration procedure of Articles of Association.

Following are the procedure for alteration of Articles of Association:-
Company by special resolution alters its Article including alterations of Public Company into Private Company or vice versa, for effecting such conversion an application shall be filed in Form No. INC 27 with fee. No alteration of converting a public company into private company shall take effect unless approved by the central government.
Alteration once approved by the Central Government, the printed copy of such approval shall be filed in Form No. INC 27 with Registrar of Company within one month of the date of receipt of the order of approval.


Write short notes on the following :
Registrar of Companies.

The Registrar of Companies (ROC) is an office under the Indian ministry of corporate affairs that deals with administration of the companies act 1956 and companies act 2013. There are currently 22 Registrars of Companies (ROC) operating from offices in all major states of India. The Registrar of Company takes care of company registration in India, completes reporting and regulation of companies and their directors and shareholders, and also oversees government reporting of various matters including the annual filling of various documents.


Write short note on the following :
Features of Memorandum of Association.

The Memorandum of Association includes the objects and the powers of the Company, the limited liability of members, and the share capital. The Memorandum of Association must also include the following:-
1. The name of the Company
2. The registered address of the Company which must be in Cyprus
3. The share capital
4. The names, addresses, and descriptions of the Shareholders together with the number of shares held by each one of them.
When it is necessary for the shareholder to remain anonymous, then another person may be registered as a shareholder provided that he/she gives to the beneficial owner a declaration of trust which must be accompanied by a blank document for a transfer of shares.


Write Short notes on Managing Director.

A managing director is someone who is responsible for the daily operations of a company . The managing director is the most senior full time executive of the company . Managing Director is responsible for the performance of the company .The responsibilities of the Managing Directors includes the following:
1.Formulating and successfully implementing the company,s policies.
2. Directing strategy towards profitable growth and operations of the company.
3. Developing strategic operating plans that reflect the longer term objectives and priorities established by the board.
4. Closely monitoring the operating and financial financial results against plans and budgets.
5.  Maintaining the operational performance of the company.
6. who carries out day to day function of the companies.
7. heads the board of directors.


Write Short notes on the following:
Auditors of the Company.

Section 226 of the Companies Act, 1956 states, "a person shall not be qualified for appointment as auditor of a Company unless he is a Chartered Accountant within the meaning of the Chartered Accountants Act 1949". A firm whereof all the partners practising as a Chartered Accountants in India, may also be appointed by its firm's name as an auditor of a company and the partner of the firm may act in the name of the firm.

A person holding a certificate under the Restricted Auditors Certificate (Part B States) Rules 1956, is also qualified to act as an auditor of a company.
The Central Government has powers to make rules providing for the grant, renewal, suspension or cancellation of such certificates to persons. It also has got powers to prescribe conditions and restrictions for such purposes. But is has to notify to this effect in the official gazette (Section 216(2) (b).

Thus to be a qualified, auditor should have passed the examination of the Institute of Chartered Accountants of India and be a member of the Institute of the Chartered Accountants : or
He should hold a certificate of practice under the Restricted Auditors Certificate (Part B States) Rules 1956.
If he does not possess either of the qualifications, he is not qualified to act as an auditor of a company.


Letter Writing.
Write a letter to the Registrar of Companies for filing a Special Resolution.

Request Letter for Company Registration

The XYZ Head Office

Associated House,

New Delhi 

Subject: Request to register a company

Dear Sir,

I have launched a new business of selling imported Korean jewelry. After thoroughly reading the terms and conditions and the availability of names, I’ve titled my company as ‘Glam Up’. Enclosed with this application is a copy of the bank draft and other required documents for registration purpose. Kindly file my company’s name into the registered companies list.

In case of any further queries or information, please feel free to contact me at the provided number. Your immediate assistance in this matter will be highly appreciated.

Thanking you in anticipation.

Regards,

XYZ.



Essay type question.
Draft the notice and agenda of the first meeting of directors.

Agenda for the Board Meeting of the Company should include below mentioned below mentioned business:

  • Election of Chairman for the Board Meeting
  • To take note of the Certificate of Incorporation issued by the Registrar of Companies
  • To take note of appointment of the First Directors of Company
  • To take note of the duties of the Directors of the Company under section 166 of the Companies Act, 2013
  • To take note of the stationery and name plate printing as per provisions of Section 12(3) of the Companies Act, 2013
  • To take note of disclosure of interest of Directors in Form MBP 1
  • To take note of the Registered Office address of the Company
  • To authorize director to keep custody of the Statutory Register of the Company
  • To discuss about the uniform Financial Year as per provisions of Companies Act, 2013
  • To appoint first Auditors of the Company
  • To consider opening of Bank Account in the name of Company with Bank
  • To consider application for Shop and Establishment License
  • To consider application for GST Registration and authorize one of the Director to sign and submit the application for GST Registration
  • To consider application for Trademark Application and authorize one of the Directors to appoint Trademark lawyer to apply the same


Essay Type Questions:
Draw a chart showing the structure of the company management.


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Letter Writing.
Write a letter to the Registrar of Companies forwarding Statutory Report.

                                      EXPORT MACHINERY LTD
                                    'Prasad chambers', Nariman Point, Mumbai-21

Tel : 23456798                                                
                                                                               Email :exportm456@gmail.com
Fax :2308976                                                    Date : 22nd August 2018

REF. No : E/03/2011

The Registrar of Companies,
Maharashtra State, 
Marine lines,
Mumbai : 400020
 
                                               Sub :  Filing the Statutory Report
Sir, 
        This is to inform you that the statutory meeting was held on 20th September 2018 at the registered office of the company. The statutory report was accepted and approved by all members of the company.
We forward herewith  for registration a copy of the " statutory report " duly signed by two directors and auditors of the company. The requisite fees for filing has been paid and copy of the challan has been enclosed.
Thanking you
                                                                                                      Yours faithfully,
                                                                                        For Export Machinery Ltd 
                                                                                                                  Sd/-
                                                                                                             Secretary


What are the occasions under which the secretary enters into correspondence with the
Registrar of Companies?

The Registrar of Companies is an office under the Indian Ministry of Corporate Affairs that deals with administration of the Companies Act 1956 and Companies Act, 2013. There are currently 22 Registrars of Companies operating from offices in all major states of India. MCA regulates corporate affairs in India through the Companies Act, 1956, 2013 and other allied Acts, Bills and Rules. MCA also protects investors and offers many important services to stakeholders. This site is your gateway to all services, guidance, and other corporate affairs related information.


What are the Duties and Functions of Registrar of Companies?

Registrar of Companies, India. The Registrar of Companies (ROC) is an office under the Indian Ministry of Corporate Affairs that deals with administration of the Companies Act 1956 and Companies Act, 2013. There are currently 22 Registrars of Companies (ROC) operating from offices in all major states of India.Completes regulation and reporting of companies and their shareholders and directors and also administers government reporting of several matters which includes the annual filing of numerous documents.The Registrar of Companies plays an essential role in fostering and facilitating business culture.
Duties - The registrar of companies (ROC) plays a pivotal role in facilitating and promoting a business. It is impossible for a company to conduct business if it has not been issued a certificate from the registrar of companies. The registrar provides a certificate which acts as a lifelong proof of existence of the company.


Name of the following:
(a) The person who promotes a business.
(b) The document containing the by-laws of a company.
(c) The documents inviting subscriptions for shares and debentures.
(d) The amount of money which must be raised before allotment of share.

(a) Promoter 
(b) Memorandum of association 
(c) Prospectus 
(d) Application money.


What is a 'Memorandum of Association'? Briefly explain its clauses.

A Memorandum of Association (MOA) is a legal document prepared in the formation and registration process of a limited liability company to define its relationship with shareholders. The MOA is accessible to the public and describes the company’s name, physical address of registered office, names of shareholders and the distribution of shares. The MOA and the Articles of Association serve as the constitution of the company. The MOA is not applied in the U.S. but is a legal requirement for limited liability companies in European countries including the United Kingdom, France and Netherlands, as well as some Commonwealth nations.

Clauses:

Name Clause
The name clause requires you to state the legal and recognized name of the company. You are allowed to register a company name only if it does not bear any similarities with the name of an existing company. Your company name must end with the word “limited” because the preparation of an MOA is a legal requirement for limited liability companies only.

Registered Office Clause
The registered office clause requires you to show the physical location of the registered office of the company. You are required to keep all the company registers in this office in addition to using the office in handling all the outgoing and incoming communication correspondence. You must establish a registered office prior to commencing business activities.

 Objective Clause
The objective clause requires you to summarize the main objectives for establishing the company with reference to the requirements for shareholding and use of financial resources. You also need to state ancillary objectives; that is, those objectives that are required to facilitate the achievement of the main objectives. The objectives should be free of any provisions or declarations that contravene laws or public good.

Liability Clause
The liability clause requires you to state the extent to which shareholders of the company are liable to the debt obligations of the company in the event of the company dissolving. You should show that shareholders are liable only their shareholding and/or to their commitment to contribute to the dissolution costs upon liquidation of a company limited by guarantee.

Capital Clause
The capital clause requires you to state the company’s authorized share capital, the different categories of shares and the nominal value (the minimum value per share) of the shares. You are also required to list the company’s assets under this clause.

Association Clause
The association clause confirms that shareholders bound by the MOA are willingly associating and forming a company. You require seven members to sign an MOA for a public company and not less than two people for a MOA of a private company. You must conduct the signing in the presence of witness who must also append his signature.


Name the stages in the formation of a company. 

Formation of a company is a complex activity,involving these stage which are as follows:
(i)Promotion- Identification of business opportunities,analysis of its prospects and initiating steps to form a company is known as promotion of a company.
(ii)Incorporation- Registration of company as body corporate under Companies Act,2013 is known as incorporation.
(iii)Subscription of Capital- A public company is raising funds from the public by means of issue of shares and debentures is known as capital subscription.
(iv)Commencement of Business- The registrar issues certificate of commencement of business which is a conclusive evidence of completion of formation requirement of a company.


What is meant by the term Promotion ? Discuss the legal position of promoters with respect to a company promoted by them.

The idea of carrying on a business which can be profitably undertaken is conceived either by a person or by a group of persons who are called promoters. After the idea is conceived, the promoters make detailed investigations to find out the weaknesses and strong points of the idea, to determine the amount of capital required and to estimate the operating expenses and probable income.

The term ‘promoter’ is a term of business and not of law. It has not been defined anywhere in the Act, but a number of judicial decisions have attempted to explain it.

A person cannot be held as promoter merely because he has signed at the foot of the Memorandum or that he has provided money for the payment of formation expenses.

Legal Position of a Promoter:
The promoter is neither a trustee nor an agent of the company because there is no company yet in existence. The correct way to describe his legal position is that he stands in a fiduciary position towards the company about to be formed.

From the fiduciary position of promoters, the two important results follow:

(1) A promoter cannot be allowed to make any secret profits. If it is found that in any particular transaction of the company, he has obtained a secret profit for himself, he will be bound to refund the same to the company.

(2) The promoter is not allowed to derive a profit from the sale of his own property to the company unless all material facts are disclosed. If he contracts to sell his own property to the company without making a full disclosure, the company may either repudiate/rescind the sale or affirm the contract and recover the profit made out of it by the promoter.




Class 11 Commerce Business Studies Extra Questions