As per section 11 of the Act, a company having share capital should file with the Registrar, declaration stating that
(i) Every subscriber to the Memorandum has paid the value of shares agreed to be taken by him.
(ii) Paidup capital is not less than Rs.5 lakhs in the case of a public limited company and Rs.1 lakh in the case of private limited company.
(iii) It has filed the Registrar the verification of the registered office.
These restrictions in section 11 are applicable to companies having share capital. It can commence business only after fulfilling all the formalities mentioned above and exercise borrowing powers immediately after incorporation.

Debenture is a document issued by the company for acknowledging the loan from the public.Debentures are generally classified into different categories on the basis of :
(i) Convertibility ofthe Instrument
(ii) Sccurity of the Instrument
(iii) Redemption ability, and
(iv) Registration of Instrument.
(i) On the basis of convertibility :
(a) Non-convertible debentures : These instruments cannot be converted into equity shares.
(b) Partly convertible debentures : A part of these instruments are converted into equity shares.
(c) Fully convertible debentures : These are fully convertible into equity shares.
(d) Optionally convertibility debentures : The investor can have the option to either convert the debentures at a price decided by the issuer or agreed upon at the time of issue.
(ii) On the basis of security :
(a) Secured debentures : These instruments are secured by a charge on the fixed assets of the issuer company.
(b) Unsecured debentures : These instruments are unsecured against the assets.
(iii) On the basis Redeemability :
(a) Redeemable debentures : It refers to the debentures which will be redeemed in future.
(b) Irredeemable debentures : It is a debenture, in which no specific time is specified by the companies to pay back the money.
(iv) On the basis of Registration, debentures may be classified as:
(a) Registered debentures : These are ssued in the name of a particular person, who registered by the company.
(b) Bearer debentures : These are issued to the bearer and are negotiable. Instruments, and are transterred by mere delivery.
 

'Formation of a company' has been divided into four stages: 1. Promotion 2. Registration 3. Capital subscription and 4. Commencement of business.
1. Promotion : Promotion stage begins when the idea to form company comes in the mind of a person. The Person who envisages the idea is called promoter.
2. Registration : The second stage in the formation of the company is incorporation on registration. In this stage the promoter does the following.
(i) Application for availability of name of company
(ii) Preparations of memorandum and articles of association.
(iii) Declaration from the professional, etc.
3. Capital Subscription : Both private company and public company not having share capital can commence its business after the completion of the above stages.
But a public limited company having its share capital has to pass through two more stages:
Example
(i) The fulfilling formalities to raise necessary capital
(ii) Fulfilling the condition for valid allotment by director.
(iii) Despatch allotment letters to allottees.
4. Commencement : As per section 11 of the Act, a company having share capital should file with the registrar declaration starting that
(i) Every subscriber to the memorandum has paid the value of shares agreed to be taken by him.
(ii) Paid up capital is not less than Rs 5 lakhs in the case of public limited company and Rs. 1 lakh in the case of private limited company.
(iii) It has filed the Registrar the verification of the Registered Office.