Define company and briefly explain its features
Answers
Answer:
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Explanation:
Features & Characteristics Of A Company
Separate Legal Entity: A company has a distinct entity and is independent of its members or people controlling it. A separate legal entity means that only the company is responsible to repay creditors and to get sued for its deeds.
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A company or a joint stock company is an association of persons for a business purpose. It is incorporated under the Companies Act. Its capital is subscribed by the shareholders. It is a corporate enterprise that has a legal entity separate that of its members.
Features of a Company:
Incorporation : A company is an artificial person created by law. A company comes into existence only after registration under the Companies Act.
Separate Legal Entity : A company is a separate legal entity from its shareholders. It can own property, enter into a contract, conduct business, sue or be sued.
Perpetual Existence : A company has a perpetual succession (continuous life without interruption) not affected by the death, lunancy or bankruptcy of its members or shareholders.
Limited Liability : Liability of the members of the company is limited (though not in all the cases to the value of the shares subscribed by each of them.
Transferability of Shares : The shares of a company are freely transferable, except in case of private companies.
Common Seal : Every company has its own common seal which is affixed to all the important documents of the company.
Management and Ownership : A company is not run by all the members but by their elected representatives called ‘Directors‘.
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