Company Features
A Private Limited Company (PLC) is a voluntary organization of people created to do business that has its own identity and is restricted in liability. A corporation is regarded as a legal person with a separate legal entity from its members. In this post, we’ll look at some of the most important characteristics of an Indian private limited corporation. What are the Features of a Company in Company Act 2013, Essential Features of a Company.
Table of Contents
Company is a Legal Entity in Its Own Right.
A firm is a legal body that exists independently of its stockholders. Even if a business’s whole ownership is acquired by one person or a group of people working together, the company will remain a separate legal entity. A corporation, on the other hand, is not a citizen and so cannot claim citizenship.
The company is a legal entity.
The word “person” is defined under the Companies Act to encompass not only natural individuals but also other legal entities. A corporation is a legal entity that may be represented in a court of law or any other setting by someone qualified to do so. In the case of a corporation, the ability to bring a lawsuit rest with the Board of Directors, and an individual Director can only do so if explicitly empowered. A business, on the other hand, cannot take an oath or make an affirmation. As a result, a corporation cannot serve as a testimony.
Perpetual Succession is a feature of the company.
Perpetual succession is one of the major reasons for forming a business. A firm’s existence will endure after its incorporation until it is wound up. Even if a shareholder owning 99.99 per cent of the business’s shares dies, the company will continue to survive.
Decree against the Company and Corporate Veil
Attachment and sale of properties belonging to other limited businesses controlled by the same group of Directors would not satisfy a court order against a firm. The corporate veil shields the firm’s members from the company’s responsibility.
Employee’s Tortuous Act Doesn’t Hold Company Liable
Because the carelessness or unlawful conduct of an employee occurs while the employee is employed by the firm, the corporation is not liable. To be held responsible, a corporation must commit unlawful conduct by an employee in the course of business, as opposed to being merely contemporaneous in time with it. As a result, if the employee is not engaging in the course of business at the time of the incident, but is doing something for himself, the firm cannot be held accountable.
Property can be owned by a company.
A corporation can possess property, and its assets belong to the corporation rather than its members.
A company can be a Trustee.
A business can be a trustee if the purposes clause in the company’s memorandum of association allows it.
In a criminal case, a company might be the complainant.
Through a representative, a corporation can be a complainant in a criminal action. The complainant in a criminal case must be a corporeal person capable of physically appearing in court. Nevertheless, as in the case of a corporation, a normal individual who, for all intents and purposes, represents the corporation as the complainant in the action. What are the Features of a Company in Company Act 2013, Essential Features of a Company.
FAQ
What are the salient features of a company?
- Separate legal entity
A firm is a legal body that exists independently of its stockholders. Even if a business’s whole ownership is acquired by one person or a group of people working together, the company will remain a separate legal entity. A corporation, on the other hand, is not a citizen and so cannot claim citizenship.
- Permanent succession
The Company’s existence is unaffected by changes in its membership. Members may die or change, but the business continues until it is closed down. Because it was formed by law rather than a natural person. Because a corporation is an artificial person formed by law, only the law may put an end to its existence. The death or insolvency of its members has no bearing on its continued existence.
- Limited Liability
The Company’s liability is distinct from that of its members.
- Artificial Judicial Person
The only human agency allows a company to act. In its name, a company can contract, sue, and be sued.
- Common Seal
A company’s official signature applied to documents by an authorised officer is known as the common seal.
What are two features of a Private Limited Company?
- Members
According to the Companies Act, 2013, a private limited company must have a minimum of two members and a maximum of 200 members.
- Limited Liability
Members’ liability is limited to the number of shares they own. For example, if the firm suffers losses in any way, the shareholders are solely accountable for the shares they own. The stockholders’ assets are not in jeopardy. What are the Features of a Company in Company Act 2013, Essential Features of a Company.
