Company : An Introduction — Flashcards

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According to Section 2(20) of the Companies Act, 2013, a company means a company incorporated under this Act or any previous company law. It is a legal entity formed by a group of individuals to carry…

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A company is called an artificial legal person because it is created by law and has many rights and powers similar to a human being. It can enter into contracts, own property, sue and be sued in its o…

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An incorporated body means a company that is registered under the Companies Act. Once registered, it gains a separate legal identity distinct from its shareholders. This allows it to own assets, incur…

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The capital of a company is divided into small, equal units called shares to make it easier for people to invest. Each share represents a portion of ownership in the company. This division allows for …

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Transferability of shares means that shareholders can buy or sell their shares freely, especially in public companies. These transactions usually happen on stock exchanges. However, private companies …

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Perpetual existence means that a company continues to exist regardless of changes in its membership. Death, insolvency, or resignation of shareholders does not affect the company's existence. It only …

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Limited liability means that a shareholder's financial responsibility is limited to the unpaid amount on their shares. They are not personally liable for the company’s debts beyond this. For example, …

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Since a company has many shareholders spread across locations, they elect representatives called directors. These directors form the Board of Directors and manage the company’s affairs on behalf of al…