Questions and Answers
What is the origin of the term 'company'?
What distinguishes a company from a partnership firm?
What denotes the capital of a company?
How is a company formed?
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What can dissolve a company?
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Study Notes
Origins and Characteristics of a Company
- Originated from the Latin word 'compania', meaning 'companion' or 'association'
- Refers to a group of people united for a common goal, typically for business purposes
Key Distinctions from a Partnership Firm
- A company is a separate legal entity from its owners, with limited liability
- Partners in a partnership firm have unlimited personal liability
Capital of a Company
- Denoted by its share capital, which is divided into shares of a fixed amount
- Each share represents a unit of ownership in the company
Formation of a Company
- Formed by incorporating with the relevant government agency, such as the Securities and Exchange Commission (SEC)
- Requires a memorandum of association, articles of association, and other legal documents
Dissolution of a Company
- Can be dissolved voluntarily by its shareholders or involuntarily by a court
- May be dissolved due to bankruptcy, insolvency, or other legal reasons
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Description
Test your knowledge about the different types of companies and their definitions.
