A company, being a separate legal person is unaffected by death or departure of any member and it remains the same entity, despite total change in the membership. The liability of a member as shareholder, extends to the contribution to the capital of the company up to the nominal value of the shares held and not paid by him.Īn incorporated company never dies, except when it is wound up as per law. “The privilege of limited liability for business debts is one of the principal advantages of doing business under the corporate form of organisation.” The company, being a separate person, is the owner of its assets and bound by its liabilities. Though it is established through judicial decisions that a company cannot be a citizen, yet it has nationality, domicile and residence. The company, though a legal person, is not a citizen under the Citizenship Act, 1955 or the Constitution of India.Ĥ. It is considered as a legal person which can enter into contracts, possess properties in its own name, sue and can be sued by others.
It is not a human being but it acts through human beings. suing or being sued in the same manner as an individual.Ī Company is an artificial person created by law.It is a different ‘person’ from the members who compose it. In common law, a company is a “legal person” or “legal entity” separate from, and capable of surviving beyond the lives of its members.Ī company incorporated under the Act is vested with a corporate personality so it bears its own name, acts under name, has a seal of its own and its assets are separate and distinct from those of its members. In terms of the Companies Act, 2013 a “company” means a company incorporated under this Act or under any previous company law In the legal sense, a company is an association of both natural and artificial persons and is incorporated under the existing law of a country.
In popular parlance, a company denotes an association of like minded persons formed for the purpose of carrying on some business or undertaking In the leisurely past, merchants took advantage of festive gatherings, to discuss business matters.
The word ‘company’ is derived from the Latin word Com Panis (Com means ‘With or together’ and Panis means ‘Bread’), and it originally referred to an association of persons who took their meals together.
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