Company Law: Definitions and Features

Perpetual succession means that a company's existence is not affected by the death or departure of its members. It continues to exist until it is wound up or dissolved as per the provisions of the Act.

Shareholders are liable only to the extent of their share capital contribution, which means that their personal assets are not at risk in case the company faces financial difficulties.

The artificial legal person concept means that a company is created by law, has similar rights to a human being, and can own property, bank accounts, and do everything that a natural person can do except go to jail, marry, take an oath, or practice a learned profession.

The Common Seal is the official signature of a company, affixed by its officers and employees on all its documents. The Companies (Amendment) Act, 2015 made the Common Seal optional.

A company is managed by its elected representatives called Directors, while ownership is held by the members.

A company means a company incorporated under this Act or under any previous company law.

A company is meant an association of many persons who contribute money or money’s worth to a common stock and employ it in some trade or business, and who share the profit and loss (as the case may be) arising there from.

The common stock contributed is denoted in money and is the capital of the company.

Distinctive features of a company include separate legal entity, perpetual succession, common seal, and limited liability.

The persons who contribute it, or to whom it belongs, are members.