Business law is that branch of law which is concerned with business entities like companies and partnerships. Icsi house, 22, institutional area, lodi road, new delhi 110 003. The definitions quoted above illuminate the principal attributes of a company, otherwise known as a corporation. Fundamental concepts in company law there are two fundamental concepts on the operational aspects of company law. A company is a voluntary association of persons, recognised by law, having a distinctive name, a common seal, formed to carry on business for profit, with capital divisible into transferable shares, limited liability, a corporate body and perpetual succession. Definition a business association of two or more persons to conduct a business unless formed under any other statute. Characteristic general partnership limited partnership. The company law has not given any legal status to promoters. It includes company law lectures of cs puja shree agarwal. Definition and characteristics of public limited company. A company is a voluntary association of person formed for some common purpose, with capital divisible in parts known as shares, and with a limited liability. Characteristics of a company, essential characteristics of.
Those that argue for codification of customary law in a form like the ustomary law manual cited above argue that it will make customary law certain and no. A private company limited by shares is the lack of freedom to exchange shares and the low transparency level of their accounts. Abe diploma in business administration study manual principles of business law contents study unit title page syllabus i 1 nature and sources of law 1 nature of law 3 historical origins 6 sources of law 9 the european community and uk law. Indian company law regulates the corporations formed under the section 220 indian companies act 20. They associate for the purpose of doing a lawful commercial activity with a view to earn profit. The principle characteristics of a company limited by shares. A company must be treated as a person in its own right. An overview 2 common law, equity and statute law 23 custom 25 case law 26 nature of equity 32. Everything you need to know about the characteristics of company. Characteristics of a company a company is a voluntary association of persons formed for some common purpose, with capital divisible into parts, known as shares, and with limited liability. A company is an intricate, centralized, economic, administrative structure run by professional managers who hire capital from the investors.
It may be noted in this connection that section 11 provides that an. And since people have no option when it comes to obeying the laws, it means that laws have to be good so that people dont feel the law is a burden. Being the arbitrary creation of the law, legal persons may be of. Like much of our course of british commercial and company law it is not easily compartmentalised, tort, contract, and equity all combine. Successful company cultures manifest seven distinct characteristics as well. Company means a company incorporated under this act or under any previous company law. A company is created when it is registered under the companies act. Ordinarily, a company may be defined as gathering, assembling or coming. The scope of company law the relationship between core company law, insolvency law, securities regulation and corporate governance. Company means a company incorporated under this act or under any previous company law history. However, if the company fails to comply any of these restrictions, it automatically qualifies for public limited company.
The latest edition of all the books referred to above should be read. Section 3 of the indian companies act, 1956 defines a company as company formed and. There are many definitions of a company by various legal experts. The government of the state is basically machinery for making and enforcing laws. It comes into being from the date mentioned in the certificate of incorporation. The state exercises its sovereign power through its laws. Being a mere creature of the law, it possesses only those properties which the character of its creation confers upon it either expressly or as incidental to its very existence. The company is distinct and different from its members in law. Sovereignty is its exclusive and most important element.
It is a creation of law and is sometimes known as an artificial person with a perpetual succession and a common seal. A company definition, features, types and companies act. A corporation is not allowed to hold public office or vote, but it does pay income taxes. Being a mere creature of law, it possesses only those properties which the character of its creation of its creation confers upon it either expressly or as. Introduction to companies act 20 chapter1 nature of company. Here are the seven characteristics of successful company cultures. Characteristic general partnership limited partnership limited liability company llc s corporation c corporation 1. This video explains the nature of company as per companies act 20 in a lucid manner which helps everyone to understand the basics of company form of organisation. A private company limited by shares cannot become a listed company since becoming a listed company requires first becoming a public company. A company comes into existence when it is registered under the companies act or other equivalent act under the law. Where systems do go further, the driving force is a policy of using company law to regulate company employee relations.
Let us see the elements of company law in more detail. Under incorporation law, a company becomes a separate legal entity as compared to its members. Notes on the growth and control of bureaucratic power in india. A corporation is a legal entity, meaning it is a separate entity from its owners who are called stockholders.
A promoter is neither an agent nor a trustee of the company because it is a non entity before incorporation. At least two people are required to form a limited liability partnership. For guidance, the developers looked to south african company law for the 21st century. Meaning, characteristics and kinds business management. It then identifies the five core characteristics of company law. Companies have a crucial role to play in british commercial law. Some legal cases have tried to specify the status of a promoter. There must be at least one partner with unlimited liability section 42. Business entities play an important role in the society and significantly impact the economy of a nation. A company is a corporation an artificial person created by law. In common law, a company is a legal person or legal entity separate from, and capable of surviving beyond the lives of its members. This policy is particularly strongly embedded in the company laws of. Where systems do go further, the driving force is a policy of using company law to regulate companyemployee relations. According to the companies act, 1956, a company is a person, artificial, invisible, intangible, and existing only in the contemplation of the law.
A company thus has legal rights and obligations in the same way that a natural person does. Characteristics of limited liability partnership incorporation. Law may, if it so provides withdraw personality from certain human beings. The essential characteristics of a company are following. It aims to do this by providing a sound, flexible framework for uk company law. Dec 28, 2017 this video explains the nature of company as per companies act 20 in a lucid manner which helps everyone to understand the basics of company form of organisation.
Here, the law must be able to satisfy the needs of the people. It is the supreme power of the state over all its people and territories. Many company law systems do not deal with stakeholder relations beyond those with creditors. According to section 31iii, an existing company is a company formed and registered under any of the former companies act. A corporation is treated as a person with most of the rights and obligations of a real person. In order for a law to qualify as a good law, it must have the following characteristics. According to wellknown professors william pride, robert hughes, and jack kapoor, business is the organized effort of individuals to produce and sell, for a profit, the goods and. The seven characteristics of successful company cultures. Other significant legal characteristics of a company are also examined. Characteristics of a company, essential characteristics of a. Nov 09, 20 conversion of private company to public company. A company is an artificial legal person created by complying with the provisions of the companies act, 2015 of the laws of kenya.
These are company cultures that indicate growth and an upward dynamic, and they are typically characterized by a high level of teamwork and engagement. On the basis of definitions studied above, the following are the characteristics of a company. From a theoretical perspective, this allows us to bridge theories of comparative politics and international relations, which in turn will permit the development of a more. The principle characteristics of a company limited by. Introduction to companies act 20 chapter1 nature of. Company law i 2008 2009 semester one lecture outline i an overview of our company law course semester one. Elements of company law i meaning and characterisitics of. It is a creation of law and is sometimes known as an artificial person with a. A company is a company formed or registered under the companies act or an existing company. In this case the court was examining the question, namely, whether the. Company law page 2 of 84 separate legal personality of companies and exceptions to that principle in both statute and the common law. Guidelines for corporate law reform may 2004, a policy document developed by the department of trade and industry the dti. Introduction of company under the companies act 20.
Elements of company law i meaning and characterisitics. A partnership having one or more general partners and one or more limited partners. The importance in the study of company law of foundation course legal knowledge. It does not take birth like natural person but comes into existence through law. A company has to fulfil requirements in terms of documents moa, aoa, shareholders, directors, and share capital to be deemed as a legal association. An attempt to reduce the customary law of the former anambra state into writing produced a manual of customary law by the commissioner for law revision of former anambra state dr s. All good laws must be in the interest of the people whose lives and behavior they seek to control and regulate. However, section 220 of the companies act, 20, defines the term company as follows.
Law can also be defined as the body of rules that is made in order to control and regulate the behavior of people. A company as an entity has many distinct features which together make it a unique organization. This chapter discusses the limited circumstances in which the law departs from the separate entity rule by looking into the company, and disregarding the corporate veil, to examine the purpose of its creation and the manner of its control. The word meeting is not defined anywhere in the companies act. A company is a creation of law, and is, sometimes called an artificial person. Characteristics of business law linkedin slideshare.