What Is A Company? Meaning, Features, & Types Of CompaniesThe word ‘ company ’ is judged from the Latin word Com Panis (Com Com means ‘ With or together ’ and Panis means ‘ Bread ’), and it originally pertained to an association of persons who took their refections together. In the poky yesteryear, tradesmen took advantage of jovial gatherings, to bat business matters.
In popular parlance, a company denotes an association of like glad persons formed for the purpose of carrying on some business or undertaking
In the legal sense, a company is an association of both natural and artificial persons and is incorporated under the living law of a country.
In terms of the Companies Act, 2013 a “ company ” means a company incorporated under this Act or under any precedent company law ( Section 2 (68 68))
In common law, a company is a “ legal person ” or “ legal object ” separate from, and fit of surviving beyond the lives of its members.
NATURE AND CHARACTERISTICS OF COMPANY
1. Marketable PERSONALITY
A company incorporated under the Act is vested with a marketable personality so it bears its own name, acts under name, has a seal of its own and its riches are separate and distinct from those of its members. It's a different ‘ person ’ from the members who compose it. So it's fit of
. incurring debts,
. espousing deep pocket,
. having a bank account,
. employing people,
. entering into contracts and
suing or being sued in the same manner as an integer.
2. COMPANY AS AN ARTIFICIAL PERSON
A Company is an artificial person created by law. It isn't a mortal being but it acts through mortal beings. It's considered as a legal person which can enter into contracts, have plats in its own name, sue and can be sued by others.
3. COMPANY IS NOT A CITIZEN
The company, though a legal person, isn't a citizen under the Citizenship Act, 1955 or the Constitution of India.
4. COMPANY HAS Race AND Place
Though it's established through judicial resolutions that a company can not be a citizen, yet it has race, quarters and place.
5. LIMITED LIABILITY
“ The honor of limited liability for business debts is one of the supereminent advantages of doing business under the salable form of organisation. ” The company, being a separate person, is the proprietor of its wherewithal and bound by its obligation. The liability of a member as shareholder, extends to the donation to the capital of the company up to the nominal value of the shares held and not paid by him.
6. PERPETUAL Kin
An incorporated company nowise dies, except when it's wound up as per law. A company, being a separate legal person is guileless by death or departure of any member and it remains the same commodity, despite total change in the count. Perpetual bloodline, means that the count of a company may keep changing from time to time, but that shall not affect its ceaselessness.
7. SEPARATE PROPERTY
A company being a legal person and entirely distinct from its members, is able of commanding, enjoying and disposing of property in its own name. The company is the real person in which all its property is vested, and by which it's controlled, managed and disposed off.
8. TRANSFERABILITY OF SHARES
The capital of a company is divided into belt, called shares. The shares are said to be mobile property and, subject to certain conditions, freely shippable, so that no shareholder is permanently or needs wedded to a company. Section 44 of the Companies Act, 2013 enunciates the principle by furnishing that the shares held by the members are mobile property and can be transferred from one person to another in the manner furnished by the essays.
9. CAPACITY TO SUE AND BE SUED
A company being a body marketable, can sue and be sued in its own name.
10. CONTRACTUAL RIGHTS
A company, being a legal individuality different from its members, can enter into contracts for the conduct of the business in its own name.
11. LIMITATION OF ACTION
A company can not go beyond the power stated in its Memorandum of Association. The Memorandum of Association of the company regulates the powers and fixes the objects of the company and provides the edifice upon which the entire structure of the company rests.
12. SEPARATE Control
The members may deduce gains without being burdened with the control of the company. They don't have effective and intimate control over its working and they choose their representatives as Directors on the Board of Directors of the company to conduct mass-market functions through executive manpower employed by them. In other words, the company is administered and managed by its executive manpower.
13. VOLUNTARY ASSOCIATION FOR PROFIT
A company is a voluntary association for profit. It's formed for the accomplishment of some stated ambitions and whatsoever profit is gained is divided among its shareholders or saved for the coming expansion of the company.
14. TERMINATION OF EXISTENCE
A company, being an artificial juridical person, doesn't die a natural death. It's created by law, carries on its affairs according to law throughout its life and sometime is abolished by law. Generally, the actuality of a company is terminated by means of winding up
. Schwing Stetter (India) Private Limited