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Certificate of commencement of business:A private limited company can commence business on receipt of certificate of incorporation. A public company has, however, to wait to commence business till a certificate of commencement of business is received from the registrar of the joint stock companies. The certificate of commencement of business is granted on fulfilling the following a few other requirements:-
1) Where prospectus has been issued inviting the public on subscribe for shares.
2) Shares payable in cash have been allotted to the amount of minimum subscription.
3) Every director of the company has paid the full amount of the shares payable in cash.
4) There is
no money liable to be paid to applicants for shares which have been offered for subscription.
5) A statutory declaration by the chief executive or one of the directors and the security that the aforesaid conditions have been compared with.
The registrar on being fully satisfied that:
1- The verified declaration has been filed.
2- All other requirements of the ordinance have been compiled with.
Will issue a certificate called, "certificate of commencement of business". On receipt of this certificate a company is entitled to commence business. A company which has not issued a prospectus shall have to file a statement in lieu of prospectus for getting the certificate of commencement of business.