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Etymology:
The word company was first used in 1150. In Latin it was called companio
companion which means one who eats bread with you. Now, a company means
business association which was recorded for the first time in 1553. Under the
Companies Act,2013 a company is defined under Section. 2(20) wherein a company
means a company incorporated under this act or the previous company law.
Definition:
Characteristics:
1. Juristic Person
2. Corporate Personality
3. Separate Existence
4. Different from shareholders
5. Sue and be sued
6. Perpetual succession
7. Hold property in its name
Case Laws:
Types of companies:
Incorporation
Blacks Law dictionary defines incorporation as the formation of Legal Corporation. This
gives a corporate personality to the company by which it is distinguished from it members.
The certificate of incorporation brings a company into existence.
Advantages:
1. Independent existence
Salomon v. Salomon
Lee v. Lee
Kondoli tea co.ltd.
2. Limited Liability
Diff it with limited by gurantee 2(21) 2013 Act
3. Perpetual sucession
Refer definitions of Blackstone and Grover
Re Noel Tedman Holdings Pvt. Ltd.
- Only husband wife members they die, co.goes to govt - escheat
Floating Services Ltd. v. MV san Fransesco Pipacola
- Advantage of incorporationis that co. never dies unless striked from register . it
has perpetual succession and remains in existence however often its members
change until its dissolution.
4. Separate Property
Macaura v. Northern assurance co.ltd.
Disadvantages:
1. Peeping
2. Penetration
3. Extending
4. Ignoring
Cases:
Tax evasion
Fraud or misconduct
1. Jones v. Lipman
2. PNB finance ltd. v. Shri Shital Prasad jain and ors.
3. Jyothi harshad Mehta and ors. V. Custodian
4. Workmen of associated rubber industries ltd.
Co is sham