BBA -210 BL 12/13/2017

 Introduction of Companies Act, 1956

 Essential characteristics of a Company
 Difference b/w Partnership and Company

BBA -210 BL 12/13/2017

 “Company is a voluntary association for profit
with capital divisible into transferable shares
with limited liability, having a corporate body
and common seal.”

BBA -210 BL 12/13/2017

 The Companies Act, 1956 defines a
company as: “a company formed and
registered under this Act or an
existing Company”.

 „Existing Company‟ means a company

formed and registered under any of
the earlier Company Laws.

BBA -210 BL 12/13/2017

1. Incorporated Association –
 A company must be incorporated or
registered under the Companies Act
 Minimum no. of required for the purpose is 7,
in case of public company and 2, in case of
private company [Sec 12]
 As per Sec [11], an association of more than
10 persons, in case of banking business and
20 persons in case of any other business.

BBA -210 BL 12/13/2017

 2.Artifical Person
 A company is created with the sanction of law
and is not itself a human being

 3. Separate Legal Entity

 A company is registered as an entity separate from its
members. It has independent existence. The company’s
money and property belong to company not to the
shareholders.

 4.Perpetual Existence
 The death, insolvency or retirement of its members leaves
the company unaffected. Members may come and go but
the company can go forever.

BBA -210 BL 12/13/2017

 5. Capacity to Sue
 A company can and be sued in its corporate
name.

 6. Transferability of shares
 Business is separate from its members in a
company form of organization, it facilitates
the transfer of member‟s interest.

 7. Common seal
 Separate and independent legal existence

BBA -210 BL 12/13/2017

 Difference b/w Partnership and Company
Basis Partnership Company
Regulating Governed by the provisions of the Governed by the provisions of the
Act Indian Partnership Act, 1932 Company Act, 1956

Agency Every partner is an agent of the A member is not an agent of the

other partners, as well as of the other members or of the company,
firms his action do not bind either
No. of Not exceed 20 in case of any For a private company , not less
membershi business firm other than banking, than 2 - 50
p In case of bank no. must not For public company , not less than 7
exceed 10
Transfer of A share cannot be transferred A shareholder may transfer his share
shares without the consent of all the freely without any restriction, in
partners case of public company
Manageme All the partners of the firm are The right to control and manage the
nt entitled to take part in the business is vested in the BOD
management of the business
Registratio May or may not be registered Registration is essential
n
BBA -210 BL 12/13/2017
 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.

BBA -210 BL 12/13/2017