Based on The Words & Meaning of the Question ICAI is absolutely Correct
Read the Question carefully. Opening words of the Question itself makes it Amply clear that the Co is in the Process of Incorporation & that means its Not yet Incorporated ( Not come Into existence.)
Attached above Forum Post will give you all your answers & a Justification to the Suggested Answer Given by ICAI to the Question.
FRIENDS PLS NOTE & SEE THIS IS WHERE THE REAL DIFFERENCE LIE BETWEEN THE ICAI STUDY BOOKS & PVT AUTHORS BOOKS. ICAI & LEARNED PEOPLE ISSUING STUDY BOOKS AT ICAI ARE FAR FAR MORE BETTER THAN ANY OF THE PVT AUTHORS
( PLS DONT TAKE THIS COMMENT AS MY DISLIKE TO ALL AUTHORS. BUT ALWAYS TRY & USE BOOKS OF ONLY THOSE AUTHORS AS RECOMMENDED BY ICAI. YOU WILL GET A LIST OF ALL SUCH AUTHORS FOR RELEVANT SUBJECTS ON ICAI SITE. & BE SURE THAT WILL HELP YOU MORE)