Briefly explain the following terms in brief. (a) Perpetual succession (b) Common seal (c) Karta (d) Artificial person
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Answer:
(a) PERPETUAL SUCCESSION :
A company is a type of business with perpetual succession and as such the death , insanity or insolvency of shareholders or director will not affect at all the continuity of the business to be carried on by the company. It is rightly said, “A company does not cease to exist merely because it has ceased to have any members. There is no reason why a Corporation should not continue to live, although the last of its member is dead.”
(b) COMMON SEAL :
Every company will have a common seal. The company shall have its name print in readable characters on it seal. For all legal matter its common seal will be stick on all documents. The common seal of the company will act as its signature.
(c) KARTA :
The management of the joint Hindu family firm is vested in the eldest male member of the family known as Karta. The karta may take the suggestions of other co- parceners but the final say rests with him. His authority cannot be questioned by other co-parceners.
(d) ARTIFICIAL PERSON :
A company is an artificial person. According to Justice cave J, “A company is a legal person just as much as an individual but with no physical existence.”
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