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Meaning, Definition And Characteristics Of Company

The word company is derived from the combination of two latin words, com and panis,' com' means together and 'panis' means bread. Thus company means an association of persons who took their meals together.

Company is an voluntary association for profit with capital, divisible into transferable share with liability having corporate entity common seal, and perpetual succession.

Statutory Definition

The term company is defined under section 2(20) of the companies act 2013, according to which a company formed and register under this act or any pervious company law.

Previous Company Law Means

  1. Indian Companies Act, 1866
  2. Indian Companies Act, 1882.
  3. Indian Companies Act, 1913.
  4. The Registration Of Transferred Companies Ordinance, 1942.
  5. The Companies Act, 1956.
  6. Portuguese Commercial Code,
  7. The Registration Of Companies (Sikkim) Act, 1961.
  8. The Companies Act, 2013.

According To Lord Lindley

A company is an association of many persons who contribute money to a common stock and employed for a common purpose the proportion of capital to which each member is entitled, is his share.

According To Chief Justice Marshall Of USA

A company is an artificial being invisible, intangible, and existing only in the eyes of law. Dormouth Cottege v/sWoodward

Being a mere creation of law it possesses only those properties which the charter of its creation confers upon it either expressly or as incidential to it's very existence.

Characteristic And Features Of A Company

  1. Incorporated association came into existence as a company on registration under companies act and if it is not registered as a company under companies act or under any other law then it becomes an illegal association.
     
  2. Separate Legal Entity

    The main feature of a company is its independent corporate existence one of the effect of incorporation is contained under section 9 of the act which provides that upon the issue of certificate subscribers to the memorandum and other person shall be separate from body corporate and no can say that he is owner of property.

    Saloman vs. Saloman and company limited.
    Company is legal entity seperate and distinct from who compose it. Company is not the agent of subscribers or trustee of it.

    Lee vs Lee's air farming Ltd.
    A member of company can contract with a company of which he is a shareholder. Under section 56 and 44 of companies act. Limited liability of member and unlimited liability of company at the time of liquidation of company.
     
  3. Common Seal( Section. 22(2)

    According to companies act 2015 the use of common seal is now optional and all members which requires affixing the common seal may not instinct the sign by two directors or one director and a Secretary of the company with effect from 29-5-2015.
     
  4. Perpetual Succession

    Like a natural person company never died and it is dependent on the life it's members for example death or insolvency of a member doesn't affect the corporate existence of the company.

    Company is an immortal person and members may comes and go but the company continues its operation unless it is wounded up. Thus there all members may were killed by
    bomb but the company was being to survive.

     

Separate Management

The members may derives profit without the burden with the management of the company. They do not have effective control over it's working. but they elect there representative and director of the company to conduct corporate functions through key Mangetarian personals.

Capacity To Sue Or Be Sued.
Against Company:
Suit must be filed with the name of company. Ex. On the infringement of copyright. negligence and contempt of court.

Company May File :
In the case of injury done to it's business or reputation by defamation.

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