— Kishore V, SME and ACW at Edumarz
- “Company” is defined as “a company formed under this Act or any earlier Company Law,” according to Section 2 (20) of the Company Act 2013.
- In general, a corporation is a legal entity with its own legal entity, perpetual succession, and common seal, as well as restricted liability.
- It is a group of people who get together to contribute to the company’s capital in order to conduct business.
- In most cases, a company’s capital is divided into small pieces known as shares, the ownership of which can be transferred subject to specific requirements.
Company Characteristics-
i) Incorporated Association:
A corporation is formed by the application of legislation. As a result, it must be incorporated under the Companies Act.
No corporation may exist without this type of registration.
(ii) Separate Legal Entity:
A corporation has its own legal entity that is unaffected by ownership changes.
As a result of its status as a separate entity, a corporation can contract, sue, and be sued in its own name and capacity.
(iii) Artificial Person:
A corporation is a juristic and artificial person constituted by law.
(iv) Limited Liability:
A company’s shareholders have limited liability.
His obligation is limited to the unpaid market value of the shares he owns.
He is free of additional responsibility if the shares are completely paid up.
(v) Perpetual Existence:
The company’s existence is unaffected by its members’ death, retirement, or insolvency.
That is, the life and duration of a company’s members have no bearing on the company’s longevity.
A company’s existence is limitless until it is properly wound up in accordance with the Companies Act.
(vi) Common Seal:
The corporation is not a real person and does not exist in the physical world. As a result, it is unable to sign.
As a result, the common seal was created.
(vii) Management and Ownership:
A corporation is administered by its elected representatives, known as Directors, rather than by all of its members.
As a result, management and ownership are distinct.
(viii) Share Transferability:
Except in the case of private firms, a company’s shares are freely transferable.
Articles of Association govern the transfer of shares in private corporations.