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Justice Lindley
A company is an artificial person. It has no physical existence. It is invisible and intangible. It exists only in contemplation of law. A company is an association of persons united for a common object. A company is an artificial person created by law having Separate identity Perpetual succession Common seal. A company is an association of persons These persons contribute money or moneys worth to a common stock. The common stock so contributed is denoted in money and is called as capital of the company. The persons who contribute the capital are called as members of the company. The capital is employed in some trade or business. The members share the profits and losses arising from such business. The proportion of capital to which each member is entitled is called as his share. The shares are always transferable although the right to transfer is often more or less restricted.
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The members do not participate in day-to-day affairs of the company. The management of company lies in the hands of elected representatives of members, commonly called as Board of directors or directors or simply the Board. The directors are appointed as well as removed by the members. Thus, the act has ensured the ultimate control of members over the company. A company can own and enjoy property in its own name. 9. Separate No member is the owner or co-owner of the companys property during its property lifetime or even on its winding up. Assets of the company are not the assets of the members. As a result, a member has no insurable interest in the property of the company. Macaura v Northern Assurance Co. Ltd. M owned all the shares except one in a company. The timber belonging to the company was insured in the name of M. The timber was destroyed by fire. The insurance claim was rejected by the insurance company for want of insurable interest. In other words, since the company was the owner of timber, only the company had insurable interest in timber. Therefore, any insurance taken by a person having no insurable interest did not result in a valid contract of insurance. A company is a legal person. A company acts in its own name, and not as an 10. Capacity to agent of its members. It has its own rights and obligations. Consequently, a sue and be company can sue others and be sued in its own name. sued in its own The creditors can make their claims only against the company and cannot name Shankar.iyer82@gmail.com Page 2
Bacha F.
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IS COMPANY IS CITISEN?
A company is not a citizen No rights of citizens Citizenship under the Citizenship Act is available only to an individual. Therefore, no company can be a citizen of India. The constitution of India grants certain fundamental rights to citizens. Since a company is not a citizen, the fundamental rights which are available only to a citizen, are not available to a company. The constitution of India grants certain fundamental rights to every person. Whether a citizen or not. Thus, a company registered in India can enjoy all the fundamental rights which are available to all persons.
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