§ Portability – The shareholder of a company can transfer his share and usually the acquirer becomes a member of the company. 9. Common label – Each company should have its own common label. It is similar to the signature of a natural person. A corporation is a legal entity that is separate from its members and shareholders. The Company is subject to certain legal rules and regulations in order to achieve the desired purpose. Without directives or laws, it is directionless and becomes a chaotic state. First, in France, the word “company” was used to refer to the body of soldiers. After 1500 years, the word company became famous in business. At that time, a group of businessmen was called a company. A business can buy real estate, sign contracts, employ people or be used. According to the law, everything capable of rights and duties is a person and therefore has a personality.
According to the law, there are two types of persons such as natural person and artificial person. Man is known as a natural person and companies or corporations as artificial persons. When a corporation registers under the Corporations Act, it can become a person capable of buying, lending money, defending and suing, selling property and holding property. We can explain the importance of the company like this – if two people want to do business and are not interested in entering into a partnership because of their responsibilities, they can go to the company registry office, fill out the company incorporation form and pay the fees. And then the registrar will register his company with an independent identity. India`s first Companies Act was the Joint Stock Companies Act of 1850. This was based on the English law of 1844. This Act introduced the principle of limited liability for the first time in India. The government appointed a committee of experts in 1950 under the chairmanship of Sric C.
H. Bhaba to propose how company law could be formed. A company has an open-ended succession, which means that it can exist continuously regardless of a change in ownership model. This means that the liability of shareholders is limited to the value of the shares they hold. Once shareholders have paid the full par value of the shares they have agreed, they cannot be held liable for any debts of the Company that cannot be satisfied from the assets of the Company. A corporation is an artificial legal entity created by a statute that makes it an entity, separate and distinct from its members, who compose it. Since the life and form of the company cannot exist without the authorization of the State, a company with legal personality may be constituted by completing certain legal formalities. The creation of a company goes through two phases: promotion and incorporation.
There is no formal limit to the amount of money that the shareholder/member of the company must pay in the event of liquidation of a limited liability company. 1. Separate legal entity – A corporation is a legal entity and its entity is completely different and distinct from its members. You can buy and sell the properties in your own name, open a bank account in your name and enter into contracts. Where a company has a legal personality different from that of its partners, a creditor of such a company may sue the company only for its debts and not one of its partners. Jurisdiction: In RF Perumal vs H. John Deavin, it has been decided that no member can claim to be the owner of the assets of the corporation during its existence or liquidation. A business cannot even have an insurable interest in the ownership of the business. Since a company is a legal person, it is obliged to conduct its activities through others (directors).
The company has a common seal that is affixed to important documents as a sign of approval from the company. If the company is limited to shares, the shareholder`s contribution obligation is based on the par value of the shares he holds, so that once he or someone who previously held the shares has paid this par value plus a premium agreed upon the issue of the shares, he is no longer obliged to contribute anything more. However, companies can be incorporated with unlimited liability of members or members can guarantee a certain amount. In this case, the liability of the partners is not limited to the nominal or nominal value of their shares and, where applicable, to any unpaid premium. The directors of a railway company, which had fully exhausted its powers of credit, advertised the guarantee of the bonds by lending funds, “W” lent £500 in the belief of advertising and received a surety. As Lord Macnaughten says: “Society is legally a very different person from subscribers. And while it may be that after incorporation the business will be exactly the same as before and the same people will be managers and the same hands receive the proceeds, the company is not legally the agent of the underwriters or trustees for them.