What does the certificate of incorporation allow a new company to do?

What does the certificate of incorporation allow a new company to do?

• A. It allows the company to trade as ltd
• B. It approves annual accounts
• C. It obligates to publish all financials
• D. It appoints directors

Answer: (A)

The certificate of incorporation is the official proof that a new business has been created as a separate legal entity that can operate as a limited company. Once this certificate is issued, the company is allowed to trade with the Ltd designation, meaning it has limited liability and can enter into contracts, own assets, and sue or be sued in its own name. The certificate itself does not approve annual accounts, obligate publishing all financials, or appoint directors—those are handled through other legal processes and documents (like annual filings and the Articles of Association).

The certificate of incorporation is the official proof that a new business has been created as a separate legal entity that can operate as a limited company. Once this certificate is issued, the company is allowed to trade with the Ltd designation, meaning it has limited liability and can enter into contracts, own assets, and sue or be sued in its own name. The certificate itself does not approve annual accounts, obligate publishing all financials, or appoint directors—those are handled through other legal processes and documents (like annual filings and the Articles of Association).