The Company…

Features of a Company

Nikunj Barnwal
 Incorporated Association
Artificial Person
Separate Legal Entity
Limited Liability
Agenda…

Separate Property
Transferability of shares
Perpetual Existence
Common Seal
A company may sue and be sued in its
own name
A company has nationality and domicile
A company can act through human
intermediaries only
 A company, in its ordinary, non-
Definition:

technical sense, means a body of

individuals associated for a common
objective, which may be to carry on
business for gain or to engage in
some human activity for the benefit of
the society.
 Incorporated or registered under the
Incorporated
Association

Companies Act

Minimum 7/2 members

Maximum 10/20

Illegal Association!!!
Artificial Person
Not a human being but has some
rights and obligations and called a
person

It does have a personality, status,

name and common seal
Separate Legal Entity
Distinct from the people
constituting it and not a mere
aggregation of its members

Classic Saloman vs. Saloman & Co.

Ltd.
 In case of loss, the liability of
Limited Liability
members is limited to the nominal
(unpaid) value of shares held by them.
If the shares are fully paid-up, the
liability is nil.
In case of unlimited liability
companies…
In case of company limited by
guaranteed…
In case of members reduced below
the statutory minimum…
Separate Property
Shareholders are not the part-
owners of the company
No member can claim to be owner
of the company during its existence
or winding-up
Even when a shareholder holds the
entire share capital, he does not
have an insurable interest in the
property of the company
Transferability of
Shares are transferable in the
manner provided in the AoA
shares

This feature makes the life of the

company independent of the lives
of its members and enjoys what is
known as perpetual succession
Perpetual Existence
Cannot be incapacitated by illness
and doesn't have an allotted span
of life

Death, insolvency or retirement of

its members leave the company
unaffected
 Company, being an artificial person
Common Seal

signs via its common seal

The AoA of the company provide for

putting the seal of the company on
the documents.
 A company…
Miscellaneous

May sue and be sued in its own

features…

name

Has nationality and domicile

Can act through intermediaries only