In this Blog you learn about, What is a Company? , Salient Features of a Company, how the Company can Differ from other forms of Business and Meaning of Company.
If any person wants to start a business. the first step is to choose the Nature of Business and what type of form of business they need to start. because there are various form forms of organization. Whether, it is a Proprietorship, HUF, LLP, Partnership Firm, Trust, and Company.
For this, in this blog, we discuss the most important Type of Business Categories that is a Company.
Before Starting a company we need to learn What is a Company. and what are the Salient Feature of a Company.
What is a Company?
Person may be a Natural Person or Legal Artificial Person. Thus, Company is a Legal Artificial Person. Because it cannot be a live person, but Company can be creates through a Law.
So, we can say that Company means a Business that is Artificial, Invisible, Intangible but Existing and Created by the Nature of Law.
Thus, If you want to start a Company then you need to follow the Rules of Company Act,2013.
Salient Features of a Company
A Company Form of Business has certain Salient features that help us to understand the realms of a company. Following are the Main Features of a Company that Differentiates from other forms of organization.
- Separate Legal Entity
- Perpetual succession
- Limited Liability
- Artificial Juridicial Person
- Common Seal
Separate Legal Entity: Company has Legally separate from the members and their existence is Separate. A company has almost the same rights and powers as a human being.
Now, A company can own property, have a bank account, raise loans, incur liabilities and enter into contracts. Most Importantly, The Shareholder is not the joint owner of the company’s property.
Perpetual succession: Change in members does not affect the existence of the Company. Members may die or change, but the company goes on till it is wound up. because it created by Law, not a natural person.
Since a company is an artificial person created by law, law alone can bring an end to its life. Its existence is not affected by the death or insolvency of its members.
Limited Liability: Liability of Company different from liability of members.
Artificial Juridicial Person: Company can act through human agency only . Company can contract, sue and be sued in its own name.
Common Seal: Common Seal is an official Signature of the company affixed by the authorized officer in the Documents.
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