DEEKSHITH KUMAR PUTTUR

Formation of a company involves certain processes like. Incorporation Promotion Raising Capital Commencement of business Incorporation of a Company Before forming a company, certain preliminary and key decisions need to be taken about the business. Theses decisions are usually done by a person known as ''Promoter'. Promoter will do all the necessary work incidental to the formation of a company. Section 3 of the Companies Act, 2013 deals with the Mode of Forming Incorporated Company.  Procedural aspects with regard to Incorporation 1. Application for Availability of Name of company As per section 4(4) a person may make an application, in such form and manner and accompanied by such fee, as may be prescribed, to the Registrar for the reservation of a name set out in the application as (a) the name of the proposed company; or  (b) the name to which the company proposes to change its name. 2. Preparation of Memorandum and Articles of Association Before filing the documents and

Meaning of Depreciation It refers to a decrease in the value of assets by wear and tear, caused by their use in the business over a period of time. Its cost is spread over its anticipated life by charging depreciation every year against the profits of the business. Conditions for allowance of depreciation. The asset must be owned by the assesse. It must be used for the purpose of business or profession. It must be used in the relevant accounting year. Assets eligible for depreciation A. Tangible Assets:  Buildings, Machinery, Plant and furniture B. Intangible Assets:  Know-how, Patents, Copyrights, Trademarks, Licences, Franchises or any other commercial rights of similar nature. Other assets like Investments, goodwill  etc., do not qualify under this category. Buildings means only superstructure and does not include the land on which it is constructed. Plants includes ships, vehicles, books, scientific apparatus and surgical equipment used for the purpose of business or profession. I

In order to incorporate a company, there must be a person who initiates the idea of entity. So the,  the first persons who control a company’s affairs are its promoters.   He is a person who does the necessary preliminary work incidental to the formation of a company.  He is a person who identifies a business opportunity or idea, analyses its prospects, and takes steps to implement it. According to [Sec. 2(69)] Companies Act 2013, Promoter means a person  a) 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 b) Who has control over the affairs of the company, directly or indirectly, whether as a shareholder, director or otherwise or c) In accordance with whose advice, directions or instructions the Board of Directors of the company is accustomed to act. However, if he is acting in a professional capacity, he shall not be treated as Promoter. According to Justice C Cockburn, Promoter is "one who undertakes t