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The company is an artificial person, created under the law. A company has a separate and distinct legal entity from its member. The company is an artificial person. It has no physical existence or body. So, it cannot be touched or seen. But it is a real person in contemplation of law. A company, being a legal person, is capable of owing, enjoying and disposing of property in its own name.
1. Artificial person
A company is an artificial person created under the law. It does not come into existence through a natural process. It has no physical body, no soul, and no conscience. But, it is not a fictitious person. It is a real person and exists only in contemplation of law. It is clothed with legal personality. It has almost the same rights and powers of a person.
2. Separate legal entity
A company is a separate and distinct legal entity from its subscribers or members or directors. It has its own legal existence independent of its members. It has own name. it can enter into contract and sue and be sued by its members as well as outsiders it can acquire assets or open bank account in its own name.
3. Perpetual succession
a company is a legal entity with perpetual succession. It never dies. Business Law creates it and law alone can dissolve it. Its existence is even not affected by lunacy,
4. Common seal
Every company is required by law to have a common seal. The name of the company is engraved on it. When this seal is affixed in the manner prescribed by the articles of the company and authorized person sign on any document it is usually presumed to be an authenticated one and legally binding on the company.
5. Registered voluntary association
A company is a voluntary association of persons registered or incorporated under the companies act. It comes into existence only when a group of persons gets it registered under the companies act. On registration, the companies become a body corporate by the name with which it is registered.
For registration of a company minimum member of persons are required. At least seven persons in case of OPC are required. The person who agrees to form a company is required to sign the memorandum of the company. Such signatories are called the subscribers to the memorandum. On registration of the company, they are known as the first member of the company.
7. Share capital
The company may be registered with or without share capital. Even the companies with a share capital are no more mandatorily. Required to have a minimum paid-up capital. Now the companies with a share capital may be incorporated with any amount of paid-in share capital. As amended by the company’s share capital of an OPC cannot exceed
8. Transferable shares
The fully paid up shares in a public company are freely transferable subject to a condition prescribed in its articles. The shares are movable property or goods, however, a private company has to restrict the right to transfer its shares by its articles.
9. Separate property
A company can acquire and have property in its own name. no number has either individually or jointly a right to the assets of the company during its existence or on its winding.
10. The capacity of sue and be sued
Although a company can enter into a contract only through some human agency it can sue on others in its corporate name. similarly, others can also sue the company in its own the name.
11. Limited capacity on contract
A company has the capacity to contract within the scope of its memorandum of association. That too must be entered into through some human agency. Any contract made beyond the scope of memorandum renders it ultra vires.
12. Management team
A company is managed by a board of directors elected by the members of the company. The day to day affairs of the company is interested in the manager or the managing director and other officers. A shareholder, therefore, cannot directly participate in the management of the company.
13. Governance by majority
A company is governed by the rule of the majority. Any decision in a company is taken with the support either of the simple or special majority.
14. Business or property in the names other than its own
It is an important feature of a company that it can own property and carry on its business in the names other than of its own.
15. The business of goods or services
A company can carry on the modern business of production or sale of goods or rendering of services within the scope of its memorandum. A company can do the business of sugar, computer, cloth etc. and can also render services of a share broker, executor, trustee, administer etc. if authorized by a memorandum of association.
16. Existence independence of estate or undertaking
The identity and the existence of a company are independent of its estate or the undertaking. Therefore, if the estate or the undertakings are taken over or nationalized by the government, it does not amount to taking over of the management of the company.
A company has its residence. For communication purpose, the residence of the company its registered office. The real business is carried on where the central management and control really resides.
A company does have a nationality. A company has the nationality in the country where it is registered. a company cannot change its nationality but a natural person can.
19. Not a citizen and has no fundamental rights
A company is a legal person but it is not a citizen either under the citizenship act. It, therefore, cannot claim the fundamental rights granted to a citizen by the constitution.