Introduction to Company and Companies act 2013

in this article we will study about Introduction to Company and Companies act 2013. we will discuss about The companies act 2013 and also the characteristics of a company, meaning and features of a company.

Introduction to Company and Companies act 2013

THE COMPANIES ACT, 2013

The Companies Bill,2011 was passed by Rajya sabha and after that in august 2013, it was renamed as the Companies Bill 2013. After assent of the President of India ,It was now called as Companies Act 2013. The main provision of this act is to change in national and international economy format and expand economic growth by using advance technology in our country. The Act aims to provides greater economy and innovation with reasonable cost and process. The Companies Act, 2013 extend the whole India and comes into force after assention by president to Companies act 2013.

Objectives of the Act :

The Companies Act 2013 comes with broad objectives are as follow –

  1. To encourage  Investment in companies by making suitable provisions.
  2. To avoid overlapping and conflict of jurisdiction in sectoral regulation.
  3. To provide innovative process and compliance cost.
  4. To protect shareholders interest by participation and control.
  5. To achieve objectives of economic and social policy.

                                           Company  :

Introduction to Company and Companies act 2013

According to the Companies Act, 2013, ‘Company’ means  an organisation incorporated  under Company law 2013 or any other previous company law. Company is an artificial person formed by single or group of people to done their work efficiently and effectively. Companies includes sole proprietorship, partnership, limited liability, corporation, and public limited company.

According to Lord  Justice Lindley, “ A Company is an association of many persons who contribute money or money′s worth  to a common stock and employed in some trade or business and who share the profit and loss arising therefrom.

According to Prof. Haney, “ A company is an artificial person  created by law, having separate entity, with a perpetual succession and common seal.”

In the eyes of law, Company is an artificial person having separate legal entity  from its members with perpetual succession and common seal. The capital of the company is divided into different shares and the shareholders are the members of company.

Characteristics of Company 

  1.  An incorporate institution or body – A  company is an institution or body  incorporated under companies act 2013 or any previous company law. A company is also known as body corporate because it is incorporated under provisions of company law.
  2. Incorporated by persons or person –  A company is an institution incorporated by single person or group of persons . One person company is incorporated by a person and other companies are incorporated by two or more persons.
  3. Number of members – In private company  there are minimum no of persons are 2 and maximum no of persons are 200, and in public company minimum number of persons are 7 and maximum members are unlimited.
  4. Artificial Person – A company is an artificial person created under law because it has no physical body. It is clothed with legal personality.
  5. Limited Liability: The principle of limited liability is a feature as well as a privilege of the corporate form of enterprise. In other words, the liability of the members is limited. It means that the shareholders enjoy immunity from liability beyond a certain limit. A shareholder cannot be called upon to pay anything more than the unpaid value.
  6. Perpetual Succession: As a juristic person, a company enjoys perpetual succession. In other words, a company never dies, nor its life depends on the life of its members. Even if all the members die, it shall not affect the privileges, immunities, estates and possessions of the company.
  7. Common Seal: The common seal is considered as the Official Signature of the company. Its common seal must authenticate all the acts. When common seal is affixed on a document, it is considered as the authoritative document of the company.
  8. Capacity to Sue and be Sued: A company being a legal person, can sue other persons in its corporate name. Similarly, others can also sue the company in their own name.

So we have studied Introduction to Company and Companies act 2013 and if you have any query please let us know in the comments section below.

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