Question

explain any four characteristic of company​

Answer 1

Answer:

Four characteristic of company are:-

i) Legal Person

ii) Artificial Person

iii) Continued Existence

iv) Limited Liability

v) Freely Transferable and a Few Others.

Answer 2

Explanation:

1. Creature of Law:

A company is a creation of law, and is sometimes called artificial person. It exists only in contemplation of law and therefore has no physical shape or form. Although invisible and intangible, as a legal person, it enjoys almost all the rights of natural person. It has a right to enter into contracts and own property. It can sue and can be sued. The legal personality is one of its distinctive features.

2. Distinct Legal Entity:

Being a creature of law, a company is a legal entity, something distinct from the persons who are its members. A shareholder is not liable for the acts of the company, even though he holds almost all the shares. Also the shareholders cannot bind the company by their acts. They are not its agents. As the company is an artificial creature of the law, distinct and separate from its members, a shareholder can both own its shares and be its creditor. The life of the company is independent of the lives of its members. Even if all the members die, the company does not come to an end because of their demise.

3. Limited Liability of Members:

The limited liability is another important feature of a company. A person, by buying shares in a company, acquires an interest in the company, and is at liberty to dispose of these shares whenever he likes. If anything goes wrong with the company, his liability is limited by the nominal amount of the shares held by him. In other words, while he stands to lose the money he has invested, he cannot be called upon to pay a paisa out of his private- property in order to help meet the company’s obligations.

4. Perpetual Succession:

The incorporation process brings into being a corporate body distinct and separate from the members who constitute it. The right given to the shareholders to transfer their shares without in any manner affecting the position of the company gives the company continuity. As a natural consequence of incorporation and transferability of shares, the company has perpetual succession or uninterrupted existence.

The life of the company being independent of the lives of its members, its life expectancy is not limited to that of the various founders. Members may come and members may go, but the company goes on uninterrupted (until, of course, wound up according to law). The law creates the company and the law brings it to an end.

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