Question

Discuss about the company form of organization

Answer 1

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The distinctive features of the company form of organization are as follows:

1. Separate legal entity:

A company has a distinct legal entity independent of its mem­bers. It can own property, make contracts and file suits in its own name. Shareholders are not the joint owners of the company's property.

2. Perpetual succession:

A company is a creation of the law and only the law can bring an end to its existence. Its life does not depend on the life of its members. The death, insolvency or lunacy of members does not affect the life of a company.

3. Limited liability:

As a company has a separate legal entity, its members cannot be held liable for the debts of the company. The liability of every member is limited to the nominal value of the shares bought by him or to the amount of guarantee given by him.

4. Transferability of Shares:

The capital of a company is divided into parts. Each part is called a share. These shares are generally transferable. A shareholder is free to withdraw his membership from the company by transferring his shares. However, in actual prac­tice some restrictions are placed on the transfer of shares.

5. Common Seal:

Being an artificial entity, a company cannot act and sign itself. There­fore, it acts through human beings. All the acts of the company are authorised by its common seal.

6. Separation of Ownership and Control:

Members have no right to participate directly in the day-to-day management of a company. They elect their representatives, called directors, who manage the company's affairs on behalf of the members. Thus, the own­ership of a company is distributed among the shareholders while management is vested in the board of directors.

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Answer 2

Hii,

A company is that form of organization which is established by some persons for earning point of view. It is registered under the company act. 1956. since, Many person involve and invest capital in a company, so, it's called Joint stock company. It's share is divided into transferrable share, means it can be transferred. As per latest info. comapnies act. 2013 has been come into existance.

Minimum 2 members are required to set up comany. A company may be of Two types Private company , denoted by pvt. ltd. and public company denoted by ltd.