(6)
Q. 32 Kavya Private Ltd. was established in the year 2012 by seven friends. As business of the company
has increased, its management is now planning to convert it into another form of business to raise
fund from the public.
(6)
(i) Name the form of business Kaya Ltd. is planning to adopt.
(11) Give any four differences between old and new form of business.
Answers
Answer:
6.. kavya should convert into public Ltd for raising funds from public
Explanation:
11. old was private Ltd.
new is public limited
fund cannot raise
fund can raise
in private company minimum is 2 and maximum is 200 and minimum paid-up is 1 lakh
in public company minimum 7 and maximum no limit and minimum paid-up is 5 lakh
For raising funds
Memorandum of Association: This is the constitution of a company. States the objective of the company, the total capital, the name of the company, the registered address etc.
Articles of Association: This document contains rules and regulations of the internal management of the company.
Prospectus: Because the company wishes to invite funds from the public it must register and issue a prospectus or a document in liu of a prospectus. Any material misstatement in the prospectus by the directors, promoter, or the experts is a criminal liability.