Mr. Mohan conceived an idea to start a garment business. He consulted a Company Secretary to get the details. The Company Secretary helped listing down Mr. Mohan’s function in the process of starting up the business. Explain briefly the functions of a promoter.
Mr. Mohan conceived an idea to start a garment business. He consulted a Company Secretary to get the details. The Company Secretary helped listing down Mr. Mohan’s function in the process of starting up the business. Explain briefly the functions of a promoter.
1. Identification of business opportunity:
• The opportunity may be in respect of producing a new product or service, or making some product available through a different channel or any other opportunity having an investment potential.
• Opportunity is then analysed for its technical and economic feasibility.
2. Feasibility studies:
• It may not be feasible or profitable to convert all identified business opportunities into real projects. The promoters, therefore, undertake detailed feasibility studies.
• The following feasibility studies may be undertaken:
Technical feasibility: An idea may be good but technically not possible to execute. It may be so because the required raw material or technology is not easily available
Financial feasibility: Every business activity requires funds. The promoters have to estimate the fund requirements for the identified business opportunity. If not able to arrange funds, then project needs to be given up
Economic feasibility: Project is technically viable and financially feasible but the chance of it being profitable is very little.
3. Name approval
• The promoters have to select a name for it and submit an application to the Registrar of Companies of the state in which the registered office of the company is to be situated for its approval.
• Proposed name is not accepted but some alternate name may be approved.
• Three names in order of their priority are given in the application to the Registrar of Companies.
4. Fixing up Signatories to the Memorandum of Association:
• Promoters have to decide about the members who will be signing the Memorandum of Association of the proposed company.
• People signing memorandum are also the first Directors of the Company.
• Their written consent to act as Directors and to take up the qualification shares in the company is necessary.
5. Appointment of professionals:
• Certain professionals such as mercantile bankers, auditors etc., are appointed by the promoters to assist them in the preparation of necessary documents which are required to be with the Registrar of Companies.
6. Preparation of necessary documents:
• The promoter takes up steps to prepare certain legal documents, which have to be submitted under the law, to the Registrar of the Companies for getting the company registered.
• These documents are the Memorandum of Association, Articles of Association and Consent of Directors.
1. Identification of business opportunity:
• The opportunity may be in respect of producing a new product or service, or making some product available through a different channel or any other opportunity having an investment potential.
• Opportunity is then analysed for its technical and economic feasibility.
2. Feasibility studies:
• It may not be feasible or profitable to convert all identified business opportunities into real projects. The promoters, therefore, undertake detailed feasibility studies.
• The following feasibility studies may be undertaken:
Technical feasibility: An idea may be good but technically not possible to execute. It may be so because the required raw material or technology is not easily available
Financial feasibility: Every business activity requires funds. The promoters have to estimate the fund requirements for the identified business opportunity. If not able to arrange funds, then project needs to be given up
Economic feasibility: Project is technically viable and financially feasible but the chance of it being profitable is very little.
3. Name approval
• The promoters have to select a name for it and submit an application to the Registrar of Companies of the state in which the registered office of the company is to be situated for its approval.
• Proposed name is not accepted but some alternate name may be approved.
• Three names in order of their priority are given in the application to the Registrar of Companies.
4. Fixing up Signatories to the Memorandum of Association:
• Promoters have to decide about the members who will be signing the Memorandum of Association of the proposed company.
• People signing memorandum are also the first Directors of the Company.
• Their written consent to act as Directors and to take up the qualification shares in the company is necessary.
5. Appointment of professionals:
• Certain professionals such as mercantile bankers, auditors etc., are appointed by the promoters to assist them in the preparation of necessary documents which are required to be with the Registrar of Companies.
6. Preparation of necessary documents:
• The promoter takes up steps to prepare certain legal documents, which have to be submitted under the law, to the Registrar of the Companies for getting the company registered.
• These documents are the Memorandum of Association, Articles of Association and Consent of Directors.
