Lakshay has set up a cement company on 10th January, 2017. He has got his company registered under Companies Act, 2013. From the day of its incorporation, it acquires an identity separate from its members. Like natural persons, it can own property, incur debts, borrow money and enter into contracts. The Board of Directors of the company will appoint top officials for running the business.
Identify and explain the four features of company form of organisation highlighted above. (
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public company
Explanation:
The public limited company is preferred as it has a separate legal entity under the Companies Act, 2013. Such form of business has a wide legal capacity to own property and incur debts. This is because the member of the company, both shareholders and the directors, have no liability to the creditors of the company.
Shares offered by a public limited company are easily transferable to any other person, such that it merely requires filing and signing of share transfer form to transfer the shares.
A company by law is a juristic person such that it can acquire or own, enjoy or alienate, property in its own name. this makes sure that the shareholders cannot claim the property as long as the company is running operations.
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