Read the given below two statements and mark the correct answer.

Assertion (A):  Incorporation is the second stage in the formation of a company.
Reason (R) : The certificate of incorporation may therefore be called the birth certificate of the company.

Both Assertion (A) and Reason (R) are true and Reason (R) is not the correct explanation of Assertion (A).

The correct answer is option 2- Both Assertion (A) and Reason (R) are true and Reason (R) is not the correct explanation of Assertion (A).

Assertion (A):  Incorporation is the second stage in the formation of a company. THIS IS CORRECT.
Reason (R) : The certificate of incorporation may therefore be called the birth certificate of the company. THIS IS CORRECT. 

After completing the formalities in promotion stage which is ist stage in formation of company, promoters make an application for the incorporation of the company. The application is to be filed with the Registrar of Companies of the state within which they plan to establish the registered office of the company. The application for registration must be accompanied with certain documents. The Registrar upon submission of the application along with the required documents has to be satisfied that the documents are in order and that all the statutory requirements regarding the registration have been complied with. However, it is not his duty to carry out a thorough investigation about the authenticity of the facts mentioned in the documents. When the Registrar is satisfied, about the completion of formalities for registration, a Certificate of Incorporation is issued to the company, which signify the birth of the company. The certificate of incorporation may therefore be called the birth certificate of the company.