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What Are The Steps Involved In Formation Of A Joint Stock Company?

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Sajid Majeed answered
Promotion Stage:It is the first stage in the formation of a joint stock company. Promoters perform the following functions in this stage.Idea Generation: The promoters discover the idea and hope that there are possibilities of business. The idea may relate to the new or an existence business. The idea is based on experience of the promoters or experts in the field.

Review and Analysis: This is the time consuming stage, because success of the business depends upon the careful analysis. Promoters think about the cost of land, machinery, labour and experts and financial needs.

Capitalization: After this promoters estimate the total amount of capital needed and then find out the types and sources of raising capital.Arrangement of business resources: If the promoters are satisfied from their analysis, then they put their efforts for the collection of business resources like land, labor and equipments etc.

Preparation of necessary documents: The promoters prepare all necessary documents required for the registration of the company like Memorandum of association, Articles of Association, and Prospectus etc.

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