Incorporation of Company — SPCC STD 11 Commerce — Question

The features of the company are as follows:
1. Independent Existence:

• The personality of the company is independent.
• This is a special feature.
• Thus the law of the company is an independent personality.

2. Limited Liability of Company's Members:

• The company has a legal personality.
• The company owns assets and liabilities as an individual; But the liability of the members is limited to the shares they hold, yet a company with unlimited liability can be formed.

3. Perpetual Succession:

• The company is a person with an artificial personality and it has a permanent existence.
• The death or illness of its members does not affect the existence of the company.

4. Separate Property:

• Since the company is a separate person, it can buy and sell property in its own name.
• No shareholder has any right over the property of the company.

5. Transferability of share:

• The shares of the company may be exchanged as per the rules laid down in the regulation.

6. Company can sue, Company can be sued (Capacity of Company to Sue and be Sued):

• Since the company is a legal person in the eyes of the law, it can take legal action against anyone. Similarly, any third party can sue the company for breach of contract or other reasons.

7. Professional Management:

• The corporate sector has the potential to attract professional managers.
• Professional managers are efficient and dynamic, which can take a company to the pinnacle of progress.

8. Finances:

• A company can start a business with capital raised through shares or debentures.