What is Incorporation?

What is Incorporation?

Incorporation is the legal process of forming a corporate entity or firm. A new legal entity is a corporation that separates the firm’s assets and earnings from its owners and investors. Corporations can be formed in almost any country and are often identified as such by the use of terms such as “Inc.” or “Limited (Ltd.)” in their titles. Incorporation is the second stage of the Formation of a Company....

Documents Required for Incorporation of a Business

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Effect of the Certificate of Incorporation

The date written on the Certificate of Incorporation is the legal birth date of a firm. On such day, it becomes a legal entity with perpetual succession. It acquires the right to enter into legally binding agreements. The Certificate of Incorporation is indisputable documentation of a company’s incorporation. Consider what would happen to an unsuspecting person/party with whom the company enters into a contract if it is subsequently discovered that the company’s formation was unlawful and hence illegitimate. As a result, the legal situation is that once a Certificate of Incorporation is granted, the company becomes a legitimate business entity, regardless of any flaws in its registration. As a result, the Certificate of Incorporation acts as solid evidence of the company’s legal existence....

What are Preliminary Contract?

During the company’s promotion, promoters enter into particular contracts with third parties on behalf of the company. These contracts are known as preliminary or pre-incorporation contracts. These contracts are not legally binding against the firm. After coming into existence, a company if wants to, in order to honour the contracts made by the promoters, may decide to enter into a fresh contract with the same terms and conditions. However, it should be noted that it cannot confirm/ratify a preliminary contract. It means that a company cannot be forced to honour a preliminary contract. Promoters, on the other hand, are personally accountable to third parties for these contracts....

What is Direct Identification Number?

DIN is a one-of-a-kind Director Identification Number given by the Central Government to everyone who intends to become or is already a director of a firm. It is an 8-digit, permanently valid unique identifying number. The information about the directors is kept in a database by DIN. DIN is specific to a person which means even if he is a director in two or more firms, he only needs one DIN. And, if he left one firm and joins another, the same DIN would continue to work there as well....