Companies Act, 2013
*1. Define ' Company '. Discuss the various characteristics of the company under the Company Law.
Or
Is Company a Legal Person? What are its various characteristics?
Or
"The company is an artificial person created by law with perpetual succession and a common seal." Explain this statement and describe the basic features of a company.
Answer:- The word 'Company' is very popular and almost known to each person. Generally, it is meant to be a collection of many individuals united in an association for a specific purpose. When many individuals together make an agreement to carry out a business or trade, then such group is understood by the public as a company. In view of the law, its definition may be somewhat different.
Definition
According to Section 2 (20) of the companies Act, 2013, "Company means a company incorporated under this Act or under any previous company law."
But this definition is neither complete nor satisfactory because it does not disclose the actual meaning and form of the company. To assimilated the meaning of 'Company', it will be appropriate to mention here the definitions of various Jurists.
According to Lord Justice Lindley, "Company is an association of many persons who contribute money or money's worth to common stock and employ it for a common purpose ".
According to Chief Justice Marshal, " Company is a person artificial, invisible, intangible and existing only in the eyes of law. Being a mere creation of law, it possesses only those properties which the charter of its creation confer upon it either expressly or as incidental to its very existence.
According to Halsbury, " Company is an association of many individuals united into one body under a special denomination having perpetual succession under an artificial form and vested by the policy of the law with the capacity of acting in serval respects as an individual particularly of taking and granting property of contracting obligations and of suiting and being sued, enjoying privileges and immunities in common, extensive according to the designs of its institution or the power conferred upon it, either at the time of its creation or at any subsequent period of its existence."
According to Springle, " The corporation is the creation of state and possesses an entity separate and distinct from the person owing its stock or their other securities."
According to Justice Buckley, the word 'Company includes two ideas:-
(i) The members of the association alike company are so numerous that it cannot
aptly be described as firm or partnership, and
(ii) A member may transfer his interest in the association without the consent of other members.
According to Heney, a Joint Stock Company is a voluntary organization formed with the object of earning a profit, whose capital is divisible into transferable shares and membership necessary for its ownership.
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