Companies Act-1956

“Company is an association of collection of individual person whether natural person, legal person or a mixture of both”. Company member shares a common purpose and unite in order to focus their various talent and organise their collectively available skills or resources to achieve specific, declared goals. This act is applicable to the whole of India except Jammu and Kashmir.

Characteristics of Company:

  1. Voluntary association which may include non profit organisation.
  2.  Its own name and seal – Company is treated as an artificial purpose and is been run by the Board of Directors chosen by shareholders. Thus a common seal of the company name is needed to register the decisions on company’s name.
  3. Company is a separate legal entity.
  4. Company has its own financial and banking accounts.
  5. Perpetual succession– It means that it is never ending until and unless it has been winded up or the purpose of forming a company has been completed.Insolvency or death of the partner do not affect the life of the company.
  6. It has a capacity to sue or to be sued– It gives access to the company that it can file a court case against any person doing harm to him(business) and in return can be sued too.

Types of Companies:

Types of companies

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4 Responses to Companies Act-1956

  1. Shanya singh says:

    Why company act is not applicable in Jammu and Kashmir??

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  2. Shanya singh says:

    What is artificial purpose??

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    • Himanshee says:

      artificial purpose basically means we assume company as one individual purpose. The company has its own existence whereas company is not a living human being and thus we term it as artificial person. An individual created in the eyes of the law.

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  3. Himanshee says:

    Article 370 make J&K as an integral part of India. and does not allow some acts to be applicable in the state.
    Why special treatment . Because India needs J&K to keep Pakistan and China at bay . Its not like J&K needs India. SO TO MAKE THEM BE AN INTEGRAL PART OF INDIA they were given a special status.

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