when it comes to company characteristics, which of the following is true? course hero

What are the 10 characteristics of a company?

Characteristics of Company – 10 Important Characteristics: Legal Person, Artificial Person, Continued Existence, Limited Liability, Freely Transferable and a Few Others A company is an association of persons who contribute money or money’s worth to carry on some agreed activity for their economic gain.

Which is an important feature of a company?

Representative control is thus an important feature of a company. Characteristic # 8. Incorporated Association of Persons: A company is an incorporated or registered association of persons. One person cannot constitute a company under the law.

What are the features of continued existence of a company?

Continued existence – A company has a life of its own distinct from the life of its members. So the death of a member will not affect the life of the company. 4. Limited liability – The liability of the members are limited to the extent of the face value of the shares held by them.

What are the characteristics of a public company?

Characteristic # 7. Separation of Ownership and Management: The number of members in a public company is generally very large so that all of them or most of them cannot take active part in the day-to­day management of the company. Therefore, they elect their representatives, known as directors, to manage the company on their behalf.

What is a company?

A company is an association of persons who contribute money or money’s worth to carry on some agreed activity for their economic gain. The money contributed by them forms the capital of the company. It is an artificial person created by law.

Who has the ultimate control of a company?

In law and theory, the members of the company, who contribute the share capital, have the ultimate control of company’s affairs. Every company is required to hold an annual general meeting at which the shareholders are supposed to exercise their power of control. In practice, the control lies with the Board of Directors or the ‘inside group’. But the Board is required to publish and present to the shareholders at the annual general meeting the accounts and the results of the working of the company.

What does liability mean in a company?

It means that the liability of the shareholders is limited upto the value of the shares held by them. Once the shareholders have paid the full nominal value of the shares they have agreed to take, they cannot be held responsible for any of the debts of the company which cannot be met from company’s assets.

How does a company become immortal?

A company comes into being by a process other than natural birth, and so possesses the property of immortality. Its life is not measured by the lives of its members. It continues to exist even if all the members constituting it die or are adjudicated insolvent. This capacity of perpetual succession ensures its continuity.

Why do companies have a common seal?

Since a company is an artificial person, it is required to conduct its business through others (Directors). The company has a common seal which is affixed on important documents as a token of the company’s approval.

How is a company formed?

A company is formed under the provisions of the relevant Act after completing certain formalities. When these formalities are completed and the Registrar of the Companies is satisfied, he issues a Certificate of Incorporation. With the issue of this certificate, the company comes into existence.

What is a company registered under the Companies Act?

A company formed and registered under the Companies Act is a legal entity separate and distinct from its members. It may contract, sue and be sued in its own name. It has no physical body and exists only in the eyes of law.