3, Incorporation stage (Giai đoạn thành lập)

Companies House, an executive agency of the UK Government, is the

official registrar of companies and is responsible for all issues related to company
incorporation. To incorporate as a private limited company, the following
information must be sent to Companies House:
1) Form IN01 ‘Application to register a company’
a. A unique and valid company name – check availability
b. The company’s registered office
c. Names of director(s) and company secretary (if applicable)
d. Subscriber details
e. Share capital details and prescribed particulars relating to share classes
2) Memorandum of Association
a. Includes names and signatures of those subscribers who are forming the
company, including a commitment from each subscriber to take at least one
share (not applicable for companies limited by guarantee)
3) Articles of Association
a. Contains operational details including internal management affairs,
liability guidelines and other important information. These are the
company’s rulebook or constitution. If using standard Model Articles they
do not have to be filed with Companies House
The above articles should be sent, with the appropriate fee, to Companies House.
Details of where to send this information can be found on the Companies House
website.
(https://www.workspace.co.uk/content-hub/entrepreneurs/setting-up-a-private-
limited-company )
4, Capital raising stage ( Giai đoạn huy động vốn)
- Sufficient money is the key to achieve sustainable growth in a business.
Lack of funding to suffice the operational requirements is one of prime
reason of business failure majorly in initial years.
 - Promoters of Private Limited Company finds limited sources to infuse funds
for the projects and operations of company. Where a Public Limited
Company can raise funds from public, Companies Act prohibits raising
funds from public at large to register pvt ltd company. Here, we are listing
the sources to support the business function after Private Limited Company
incorporation.
- Where Private Limited Company may fulfil the requirements through initial
capital raised, with increase in number of transactions, further capital can be
infused by opting any of following way suitable with requirements of Private
Limited Company.

Further issue of Capital:

- If the requirements of a company can be served by the funding from

shareholders of the company, an option is always available for further issue
of share capital after Private Limited Company Registration. The shares
of a private limited company can be issued through the Rights Issue to
existing shareholders of the company. The company can also issue shares to
outsiders i.e. any person other than the existing members subject to
provisions of Indian Companies Act, 2013.
- The Act provides that prior approval of not less than 75% of existing
shareholders shall be requires to issue and allot the shares to non-members.
Further, care shall be taken for below mentioned points:

 Prior Approval of Board of Directors and Shareholders further issue of

shares.
 The post issue total capital shall not exceed the Authorised Capital of
Company as provided in MoA of the company. (Where the total capital
after proposed issue exceeds the Authorised Capital, the procedure to
increase Authorised Capital should also be followed. The Memorandum of
Association of Company will also be modified to change the Authorised
Capital of Company.)
 Total number of shareholders, post issuance of capital, shall not exceed 200
in total in given case.

- Borrowing through Banks:

Apart from the internal funding through issue of share capital, the most common
way chosen is the borrowing funds from Banks. This option is preferred when the
funds from promoters are not sufficient to sponsor business operations. However,
these funds are raised with the cost of fixed interest at the interval of pre-decided
long term period.
The policies of the concerned institutions shall be confirmed. Apart from
requirements of Banks, funds raising from Banking shall also require to follow the
procedure laid under the Companies Act, 2013. The board resolution shall be
passed to borrow the sum from any bank. The restriction on power of Boards is
prescribed under section 180 of the Companies Act, 2013, which is explained
below:
“The board shall accord prior consent of the members through Special
Resolution, where the total borrowed money (including borrowed earlier) exceeds
company’s paid-up share capital and free reserves.”
However, the given limit and provision is not applicable in case of Private Limited
Company. Therefore, the Board of Directors of the Private Limited Company can
borrow any amount from Banks for long term requirement of the Company without
approval of the Shareholders.
Mentioned above are most preferred and common ways to raise the money.
However, additional and alternate ways are raising funds from:

 Venture Capital;
 Angel Investors;
 Business Loans from Microfinance providers or NBFCs.

Further, Incubator and Accelerator programmes are also funding options in early
stage businesses. These sources being long term and external in nature, the cost
involved are higher and fixed in nature. In order to reduce the fixed cost of interest
on shoulders of newly formed companies, internal funding options are also open.
Instead of fund raising through issue of capital, the funds can also be raised from:

 Members of the companies;

 Directors of the companies; and
 Associated companies through long term loans.

A brief discussion with professional is must where the funds are being raised in a
company irrespective to the size of a Company. Number of resolutions is required
to be passed and declarations are to be compliant with the provisions applicable in
concerned case.
5, Giai đoạn bắt đầu kinh doanh