The word company is derived from the combination of two latin words, com and
panis,' com' means together and 'panis' means bread. Thus company means an
association of persons who took their meals together.
Company is an voluntary association for profit with capital, divisible into
transferable share with liability having corporate entity common seal, and
The term company is defined under section 2(20) of the companies act 2013,
according to which a company formed and register under this act or any pervious
Previous Company Law Means
- Indian Companies Act, 1866
- Indian Companies Act, 1882.
- Indian Companies Act, 1913.
- The Registration Of Transferred Companies Ordinance, 1942.
- The Companies Act, 1956.
- Portuguese Commercial Code,
- The Registration Of Companies (Sikkim) Act, 1961.
- The Companies Act, 2013.
According To Lord Lindley
A company is an association of many persons who contribute money to a common
stock and employed for a common purpose the proportion of capital to which each
member is entitled, is his share.
According To Chief Justice Marshall Of USA
A company is an artificial being invisible, intangible, and existing only in the
eyes of law. Dormouth Cottege v/sWoodward
Being a mere creation of law it possesses only those properties which the
charter of its creation confers upon it either expressly or as incidential to
it's very existence.
Characteristic And Features Of A Company
- Incorporated association came into existence as a company on
registration under companies act and if it is not registered as a company
under companies act or under any other law then it becomes an illegal
Separate Legal Entity The main feature of a company is its independent corporate existence one of
the effect of incorporation is contained under section 9 of the act which
provides that upon the issue of certificate subscribers to the memorandum
and other person shall be separate from body corporate and no can say that
he is owner of property.
Saloman vs. Saloman and company limited.
Company is legal entity seperate and distinct from who compose it. Company
is not the agent of subscribers or trustee of it.
Lee vs Lee's air farming Ltd.
A member of company can contract with a company of which he is a
shareholder. Under section 56 and 44 of companies act. Limited liability of
member and unlimited liability of company at the time of liquidation of
Common Seal( Section. 22(2) According to companies act 2015 the use of common seal is now optional and
all members which requires affixing the common seal may not instinct the
sign by two directors or one director and a Secretary of the company with
effect from 29-5-2015.
Perpetual Succession Like a natural person company never died and it is dependent on the life
it's members for example death or insolvency of a member doesn't affect the
corporate existence of the company.
Company is an immortal person and members may comes and go but the company
continues its operation unless it is wounded up. Thus there all members may
were killed by
bomb but the company was being to survive.
The members may derives profit without the burden with the management of the
company. They do not have effective control over it's working. but they elect
there representative and director of the company to conduct corporate functions
through key Mangetarian personals.
Capacity To Sue Or Be Sued.
Suit must be filed with the name of company. Ex. On the infringement of
copyright. negligence and contempt of court.
Company May File
In the case of injury done to it's business or reputation by defamation.