Company Incorporation and Liability

Incorporation

• Section 8 of the Company Act 2013 deals with the incorporation of a company as a separate legal entity.
• A company is considered incorporated when it is registered with the Registrar of Companies (ROC) and a Certificate of Incorporation is issued.
• The company comes into existence from the date of its incorporation.

Liability

• Section 8(1) states that the liability of the members of a company is limited to the amount unpaid on the shares held by them.
• The liability of the members is limited to the extent of the unpaid amount on the shares, and they are not personally liable for the company's debts.
• The liability of the members is limited, but the company itself is responsible for its debts and obligations.

Transferability

• Section 8(2) states that the shares or interests of a company are freely transferable, subject to the restrictions imposed by the articles of the company.
• The transferability of shares is a key feature of a company, allowing members to easily buy and sell shares.
• The articles of the company may impose restrictions on the transfer of shares, but these restrictions must be reasonable and not against public policy.

Perpetual Succession

• Section 8(3) states that a company has perpetual succession, meaning it will continue to exist until it is legally dissolved.
• The company will continue to exist despite changes in its membership, and the death or insolvency of its members will not affect its existence.
• Perpetual succession ensures that the company can continue to operate and fulfill its obligations despite changes in its membership.

Common Seal

• Section 8(4) states that a company may have a common seal, but it is not mandatory.
• The common seal is a symbol of the company's authenticity and is used to authenticate documents and contracts.
• The use of a common seal is optional, and the company can choose to use it or not, as it deems fit.

Incorporation

• A company is considered incorporated when it is registered with the Registrar of Companies (ROC) and a Certificate of Incorporation is issued.
• The company comes into existence from the date of its incorporation, as specified in Section 8 of the Company Act 2013.

Liability

• The liability of the members of a company is limited to the amount unpaid on the shares held by them, as stated in Section 8(1).
• Members are not personally liable for the company's debts, with their liability limited to the extent of the unpaid amount on the shares.

Transferability

• The shares or interests of a company are freely transferable, subject to the restrictions imposed by the articles of the company, as per Section 8(2).
• The transferability of shares is a key feature of a company, allowing members to easily buy and sell shares.

Perpetual Succession

• A company has perpetual succession, meaning it will continue to exist until it is legally dissolved, as stated in Section 8(3).
• The company will continue to exist despite changes in its membership, and the death or insolvency of its members will not affect its existence.

Common Seal

• A company may have a common seal, but it is not mandatory, as specified in Section 8(4).
• The common seal is a symbol of the company's authenticity and is used to authenticate documents and contracts.