INSTITUE OF PROFESSIONAL EDUCATION

&RESEARCH

ASSIGNMENT
ON
COMPANY

SUBMITTED TO:
SUBMITTED BY:
Prof B.K.UPADHYAY
Gagan Singh(53)
Technical experience of a shareholder is
not the experience of the company?
A company may be defined as a group of people
associated together for a purpose of carrying on
a business, with a view to earn profits. A
company is an association of many people who
contribute money or money’s worth to a
common stock and applies it in some trade or
business and who share the profit and loss there
arising from. The people who contributes it or to
whom it belongs are members. The proportion of
capital to each member is entitled is his share.
The shares are always transferable although the
right to transfer is often more or less restricted.
But a company once incorporated has a
separate legal entity from its members. It has an
existence of its own. It becomes a separate legal
entity of its own. It is an artificial legal person as
it exists in the eyes of the law and cannot act on
its own. . However it was observed that the
corporate veil can be experienced to find out the
 nature of the company from that of the
shareholders. It was also held that the
experience of the company means the
experience of the constituents of the company.

. Members may die but a company never?

Company has a legal entity distinct from and
independent of its members. A company has
a perpetual succession and is independent
of the life of its members. Its existence is not
affected in any way by the death, insolvency
or exists of any shareholder. A company can
be compared with a river which retains its
identity through the parts which compose it
are constantly changing. Perpetual
succession thus means that in spite of the
change in the membership of the company,
its continuity is not affected. Since a
company is created by law, it can be wound
up by restoring to the legal provisions of the
companies act . Before a company is
dissolved the member should ensure that
assets owned by the company are dealt with
the prior to dissolution and transferred out of
 the company’s ownership. So conclusively
a company is an artificial legal entity. It
cannot live and it cannot die. Its effective
birth is registration and its effective death is
dissolution.

A company cannot be a citizen, yet it has

nationality, domicile and residence

A company is an incorporated association,

which comes under existence only after the
companies act. It has a personality of its own distinct
from its share holders. A company is deemed to be
an artificial and imaginary person and as such it
cannot manage its own affairs. A company is without
doubt a legal person or entity but under Article 19 of
IC, it is not a citizen. A company cannot take the
recourse of law to press for its fundamental rights
like a citizen can. It does not have right to franchise.
Though the company cannot be a citizen yet its
nationality can be recognized. Its nationality is
recognized at the place where the company is
incorporated. The company which is incorporated in
India shall be Indian company even though its
members are foreigners. A company is capable of
having a domicile. Its domicile is the place of
registration and it retains the domicile throughout its
existence. However the formation of the company is
decide into four steps :
I. Promotion
II.Registration or incorporation
III.Capital subscription
IV.Commencement of business
However it is in the second step which decides the
citizenship , nationality and domicile of the company.