Times Biz

Incorporation of a company is the legal process of getting a company registered under the Companies Act. A company comes into existence only when it is registered with the Registrar of Companies.

Certificate of Incorporation is the certificate issued by the Registrar of companies when a company is registered. It is a conclusive proof that all legal formalities required for the incorporation of a company have been duly fulfilled.

Flotation of a company means starting it as going concerns. It involves generation of the required capital and obtaining the certificate of commencement of business.

Promoters are of the following types:

Professional Promoter: He promotes a company and then transfers its management and contralto the shareholders.  Promotion is his profession.

Occasional Promoter: He promotes a company once in a while. Promotion is not his profession.  Once the task of promotion is over, he returns to his original occupation.

Entrepreneur Promoter: He promotes a company for himself.  He continues to manage and control the company after promotion.

Financial Promoter: He may be an investment banker or a financial institution who promotes a company due to his financial experience.

Technical promoter:  Sometimes an expert in a technical field such as engineering, architecture, etc. may promote a new enterprise and charge fee for his service.

A promoter requires the following qualities:

Vision: He should possess a clear view of the future in order to visualize the changing business conditions.
Creativity: he should be imaginative and innovative.  He needs to discover business opportunities.  He should have an alert mind.
Resourcefulness: He should have the ability to mobilize the financial. Physician human resources to translate his ideas into reality.
Analytical Skill: He should able to critically investigate the technical feasibility and commercial viability of the
Patience: He should have the patience to bear the initial set backhand hurdles in the life of an enterprise.
Alert mind: he should be alert to notice business opportunities which can be turned to advantage.
Action oriented: He should be able to give his idea a practical shape.

Promotion means the discovery of business opportunities and subsequent organization of funds and managerial skills into a business enterprise for the purpose lovemaking refits there from.
A promoter is a person who identifies a business opportunity, analysis its prospects and takes steps to form a company with reference to the business opportunity.  The promoter conceives the idea of a business, analysis its prospects, brings together the required resource and gets a company incorporated.  The promoter may be an individual firm or even company.
The objects of promotion of a company are as under
to start a new business enterprise;
to expand an existing enterprise, and
to amalgamate or combine tow or more existing enterprise into one enterprise.

Social responsibility means the intelligent and objective concern for he well being of society.  It restrains behavior form ultimately destructive activities, no matter, however profitable in the immediate future.  It leads towards betterment of humanity.

The liability of a minor partner is limited to the amount of capital invested by him n the firm. After attaining the age of 18 years, the minor must inform the ulcer whether he will continue in the firm as a partner or not.  If he keeps quiet, he will be assumed to continue as a partner and his liability will become unlimited.

The term Business reeds to production, purchase, sale an exchange of goods and services on a regular basis with the aim of earning profits by satisfying by human wants. It includes all industrial and commercial activities such as mining, manufacturing, trading, transportation, warehousing, banking insurance and others.  Business is an economic activity.

Business involves risk.  Unless there is the possibility of earning profit no one would like to enter business.  Therefore profit is the reward for a businessman.  Profit is the greatest motivating force for business activity.  According to Ducker “Unless we provide roar risk we are going to destroy capacity to produce.  Therefore a minimum profitability adequate to risks which we by necessity assume and create is an absolute condition of survival not only for the enterprises but for society”.  Profit is the test of business performance.  In other words the efficiency of a bus business cannot be sustained for long and its closure can cause harm to the society.

Business exists and functions in a society and it must serve the interest of society.  The pursuit of money at the cost of service is not business.  In the words of uric “earning profit

Business exists and functions in a society and it must serve the interest of society.  The pursuit of money at the cost of service is not business.  In he words of Uric “earning profit can be no more the objective of a business than betting is the objective of a race making a score the objective of cricket or eating the objective of living.” According to Ducker “the problem of any business is not the maximization of profit but the achievement of sufficient profits to cover the risks of economic activity and thus to avoid loss”.

Thus earning of profits is essential for the survival and growth of a business.  Profit is a source of income and provides the means of livelihood for businessmen and their families.  It is an incentive and a reward for bearing the risks of business.  But earning of profits cannot be the sole objective of business.  In order to earn profits business must pursue other economic and social objectives.  Other economic objectives include maximum utilization of scarce sources creating customers innovation etc.  Business also has social objectives such as production of good quality products at fair prices generation of employment employment employee welfare etc.

Profit is an important objective of business and it plays a vital role in business in the f profit is the source of income and provides the mean soft livelihood for the businessmen and their families Profit provides funds for the growth of business  Profit serves as an index of the efficiency and performance of business  Profit is a reward for risk bearing Profit increases the reputation or goodwill of a business firm.

Business is an integral part of society and it must therefore fulfill the expectations of society.  Business activities should be carried on in a socially desirable manner. In fact profits can best be earned in the long run by putting the needs of society above profit.  In other words service first and profit next should be the motto of business because business has no meaning unless it can serve and satisfy customers at a profit.

Social objectives of business are as under:

Supply of desired Quality at Fair Prices: Business is expected to supply the goods of good quality at reasonable price.  Consumers prefer to buy a product which is pure safe or durable in quality and is available at reasonable rice.  Therefore producing and selling goods of proper quality at reasonable prices is an important social objective of business.

Avoidance of anti-social and Unfair Trade Practices: A businessmen should not indulge in anti-social practices like hoarding black marketing and adulteration to make quick money.  Some businessmen make money by misleading and exploiting people through false advertising.  Such anti-social practices not only spoil the image of business but also lead to punishment.  Therefore businessmen should avoid these undesirable means of increasing profits.

Generation of Employment: Another social objective of business is to provide employment to people.  Poor handicapped and other weaker sections of the society should be given preference at the item of recruitment.  This practice improves thee economic status of these people.  Training is imparted to them to make them moan efficient in their jobs and useful to society.  Business firms which generate employment and income in society improve their public image.

Welfare of Employees: Business should provide healthy working and living conditions to employees who contribute to the success of the enterprise.  Business must pay satisfactory wages and salaries to its employees as well as ensure adequate regulation of working hours.  Large business firms provide housing and medical facilities for the employees and their families.  Businessmen should take decisions affecting the employees in consultation with the representatives of employees.  The lives of employees must be accorded the meaning and dignity they require to perform efficiently and make useful contribution to society.  Such welfare facilities help to improve the efficiency of employees and the profitability of business.

Service to Community; Large business firms are expected to undertake community services like setting up training centers for the unemployed charitable dispensaries and schools and making donations for social do religious junctions sponsoring games and sports etc.  Such community services help to improve the public image and reputation of business.  Business is expected to adopt environment friendly practices and to follow the regulations prescribed by the Government.

The economic objectives of business are as follows

The primary objective of business is to earn profits.  This is because no business can survive without profits for a ling time.  People enter into business in the hope of earning money.  Profits into only serve as the source of livelihood for businessmen but also help them to expand their businesses activities. The growth of every business depends largely on its ability to earn profits.  Profitability of business firm enables it to gain recognition and prestige in society.  Success of business is therefore measured in terms of it profits.

Profit can be earned only when thunder is customer’s toss buy goods and services.  It is there fore necessary for every business to create and sustain demand for its products and services.  Demand is created through advertising and other methods of promotion.  According to Ducker “There is only one valid definition of business purpose: to create a customer…. It is to supply the customer that society entrusts wealth producing resources to a business enterprise”.
But it is not enough to create customers.  Business must establish a place for itself in the market and protect itself from competition.  Businesses have to acquire a reasonable share of the total market and preserve and enhance its market share.

In a competitive market a business can be successful if it strives continuously to achieve new or improved products or services new methods of production ad distribution.  Exploring and discovering new and better ways and means of increasing costumer satisfaction is call innovation.  It involves introducing better products improved methods of production exploring new markets and using better methods of distribution.  Producing color television in place of black and white sets using power looms in place of hand looms for weaving distributing the product through the manufacturer’s own retail shops instead of dealers are examples of innovation.  Thus innovation is an important economic objective off business.

A business should also aim at increasing efficiency of operations in order to minimize per unit cost of production and distribution.  This requires making the best use of scarce resources like materials manpower machinery etc.  This objective can be achieved by reducing wastage of raw materials making efficient use of machines and employing efficient and dedicated employees.  Economic objectives of business refer to the aims of earning money by increasing the efficiency of business operations.  On the other hand social objectives imply rendering service to customers employees and other sections of society.  With regard to economic objectives financial gain is the primary motive whereas with regard to social objectives service is the main consideration

The objectives of business can be moth economic and social in character, Economies objectives include earning profits, creating customers, innovation and maximum utilization of scarce resources.  Social objectives include supply of desired quality of adducts at fair prices generation of employment, avoidance of antisocial and unfair practice, employee welfare and others.