According to Justice Marshall a company is ‘an artificial being, invisible. intangible ind existing only in the contemplation of Law.’’ According to Sec.3(1) of the Companies Act defines a company as ‘company formed and registered under this Act, or an existing company’. An existing company means a company formed and registered under any of the former companies Acts.
Characteristics of a Company
1) It is a Voluntary association of person.
2) A company has a separate legal existence. It can hold, purchase and sell property, can enter into contracts with others in its name.
3) It has a perpetual or continuous existence. Its existence is not effected by the death, lunacy or insolvency of any member. Members may he changing from time to time, but the company goes on for ever.
4) The liability of the members is limited to the extent of the face value of shares held by them.
5) The shares in a joint stock company are freely transferable, except in case of private companies.
6) It has a common seal. Being an artificial person it can act only through natural persons, called Directors.
All documents prepared by •directors will be valid only when it contains the common seal.
7) There is a separation of ownership and management. A company is owned by shareholders and managed by a separate body called ‘Board of Directors’.
8) In a public limited company, the minimum number of members is seven and there is no maximum limit. In case of private limited companies the minimum number is two and the maximum number is fifty.
9) A company comes into existence only after its registration under the companies Act. A company from incorporation to liquidation is governed by various provisions of the companies Act.
Characteristics of a Company
1) It is a Voluntary association of person.
2) A company has a separate legal existence. It can hold, purchase and sell property, can enter into contracts with others in its name.
3) It has a perpetual or continuous existence. Its existence is not effected by the death, lunacy or insolvency of any member. Members may he changing from time to time, but the company goes on for ever.
4) The liability of the members is limited to the extent of the face value of shares held by them.
5) The shares in a joint stock company are freely transferable, except in case of private companies.
6) It has a common seal. Being an artificial person it can act only through natural persons, called Directors.
All documents prepared by •directors will be valid only when it contains the common seal.
7) There is a separation of ownership and management. A company is owned by shareholders and managed by a separate body called ‘Board of Directors’.
8) In a public limited company, the minimum number of members is seven and there is no maximum limit. In case of private limited companies the minimum number is two and the maximum number is fifty.
9) A company comes into existence only after its registration under the companies Act. A company from incorporation to liquidation is governed by various provisions of the companies Act.
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