Everything You Need to Know About Companies in India and Its Incorporation
A company is a legally recognized organization created by a group of people to do commerce or trade with the goal of making money or accomplishing particular goals. Businesses are distinct from the individuals who own or run them because they are independent legal entities. In contemporary commerce, the idea of a corporation is essential because it provides a framework for how enterprises can function, expand, and maintain legal compliance. This article examines the definition of a company, its key attributes, and the many business forms permitted by the Companies Act of 2013.The Latin words "com" (together) and "panis" (bread) are the origin of the word "company," which denotes a gathering of individuals for a shared goal. Legally speaking, it refers to a legally recognized corporate body that is able to engage into contracts, hold property, and carry out business operations under its name. Section 2(20) of the Companies Act of 2013 states
Features of company –
The legal definition of a corporation includes a number of unique features that set it apart from other business structures such as partnerships or sole proprietorships. The following are the main legal attributes of a business:
• Artificial Legal Person
A business is a legally recognized organization. It can enter into contracts, own property, and sue or be sued—all of the rights and obligations of a real person. It functions through its Board of Directors, nevertheless, and is unable to take actual action.
• Separate legal entity
A company's legal identity is different from that of its members. This guarantees that the assets and liabilities of the business are distinct from those of its stockholders. In the Salomon case, the idea of distinct legal personality was upheld, shielding stockholders from being held personally liable for the debts of the business.
• Perpetual succession
The retirement, insolvency, or death of a member has no bearing on the company's continued existence. It stays in operation until winding-up processes are used to formally dissolve it.
• Limited Liability
Shareholders of a company are only liable for the unpaid value of their shares. This guarantees that shareholders' private assets are safeguarded even in the event that the business experiences financial difficulties.
• Transferability of shares
Shares of a public company are readily transferable, giving investors liquidity. However, the Articles of Association of private companies may restrict the transfer of shares.
• Profit-driven Voluntary Association
A company is freely established by people or organizations with the goal of making money. Dividends from profits are distributed to shareholders.
