Question

A Private company can commence business as soon as it receives

• A. Certification of incorporation
• B. Letter of intent
• C. Occupation certificate
• D. None of the above

Hint:

Think of the Certificate of Incorporation as the "birth certificate" of a company. For a private company, this certificate is the only document needed from the RoC to start its operations.

Answer 1

The Correct Option is A

Step 1: Understanding the Concept:
The process of company formation involves several stages, culminating in the legal recognition of the company as a separate legal entity. The point at which a company can legally start its business operations is a key milestone.

Step 2: Detailed Explanation:
Upon the registration of a company, the Registrar of Companies (RoC) issues a Certificate of Incorporation. As per Section 9 of the Companies Act, 2013, this certificate is conclusive evidence that all the requirements of the Act have been complied with in respect of registration.
For a private company, the receipt of the Certificate of Incorporation is the moment it comes into legal existence and can commence its business activities.
Previously, public companies had to obtain an additional 'Certificate of Commencement of Business'. While the requirements have changed under the 2013 Act (a declaration is now needed), the rule for private companies remains straightforward: they can start their business upon incorporation.

Step 3: Final Answer:
A private company can commence its business as soon as it receives the Certificate of Incorporation.