A person who forms a company is called a promoter. So a promoter is any person who is directly involved in the formations of the company. The promoter raises capital for the new company through proposals for issuing shares.

The promoter engages professionals like lawyers or solicitors to drew up an agreement for the company. The promoter submits to the Registrar of Companies the regulations of the new company for registration.

The regulations of the company is made up of the Article of Association and the Memorandum of Association.

Article of Association: It is document that deals with the internal operation of a company. It contains the rights, powers, responsibilities and authority of shareholders, employees, Board of Directors and other interest group within the company.

Memorandum of Association: It is a document that contains information concerning company's relationship with the external world. It shows the relationship between the company and the outside world such as the Internal Revenue Service etc.

The are contained in the Memorandum of Association.

* The type of business the company intends to operate.

* The name of the company with the word limited as the last word,if it is a limited liability company.

* The names,addresses, power and the rights of all the directors of the company.

*The nominal value of shares registered.

* The liability status of all the members of the company.

When the Registrar of companies is satisfied with the regulations of a company, he approves it by issuing a certificate of incorporation to the new company.

The certificate of incorporation gives birth officially to the existence of a company. However,the Registrar must again issue another certificate called certificate to commence business to the new company can start it's operations.

At this stage the company has become a legal entity. It can sue and be sued. So how to form a company.

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