What is the meaning of company? Definition, features, types

In this session, we will be discussing what is the meaning of company, and also company definition, features of the company, types of company, how a company work, company vs corporation, public vs private companies, examples of company.

What is the meaning of company?

A group of people who work together to achieve common goals, which defines the meaning of the company. so, let’s discuss deeply what is the actual meaning of the company.

A company, which one is an artificial person having a separate legal existence, perpetual succession, and common seal. Most of the companies, which aim are to earn profit but some of the companies are not to earn profit. for examples humans, companies can hire and fire workers. They can also buy shares in other companies, sue, and be the target of a lawsuit. Additionally, companies can borrow and lend money, and own property.

Here we will be discussing the company definition, which is defined by the most popular authors. justice Lindley, Prof. Haney, Chief justice Marshall, Lord Lindley, Kimball, and Kimball, James Stephenson. 

According to the company, definition defines by justice Lindley, “joint-stock company is meant as an association of many persons who contribute money or money’s worth to a common stock and employ it for some purpose.”

 Company definition defines by Prof. Haney, “joint-stock company is a voluntary association of individuals for profit, having a capital divided into transferable shares, the ownership of which is the condition of membership.”

The definition of the company defines by Chief justice Marshall, “A joint-stock company is an artificial person, invisible, intangible and existing only in the eyes of low.”

The definition of the company defines by Lord Lindley, “By a ‘company’ is meant an association of many persons who contribute money or money’s worth to common stock and employ it for some common purpose. The common stock so contributed is denoted in money and is the capital of the company. The persons who contribute it or to whom it belongs are members. The proportion of capital to which each partner is entitled is his share.”

According to the company, definition defines by Kimball and Kimball, “A corporation is by nature an artificial person created or authorized by the legal stature for some specific purpose.”

James Stephenson defines the definition of company, “A company is an association of many persons who contribute money or money’s worth to a common stock and employs it in some trade or business, and who share the profit and loss (as the case may be) arising therefrom.” (What is the meaning of company).

According to the definition of a company by the Indian Act 2013;

‘‘A registered association which is an artificial legal person, having an independent legal, entity with perpetual succession, a common seal for its signatures, a common capital comprised of transferable shares and carrying limited liability.’’

According to the US legal definition;

‘‘A company can be a corporation, partnership, association, joint-stock company, trust fund, or organized group of persons, whether incorporated or not, and (in official capacity) any receiver, trustee in bankruptcy, or similar official, or liquidating agent, for any of the foregoing.’’

According to the British definition;

‘‘A company is a body corporate or an incorporated business organization registered under the companies act. It can be limited or unlimited company, private or a public company, company limited by guarantee or a company having the share capital, or a community interest company.’’

In the session on what is the meaning of a company, we will be also discussing the features/characteristic of a company.

The features/characteristic of a company can be dedicated to the following points.

1. Incorporated Association
2. Separate Legal Entity
3. Limited Liability
4. Transferability of Shares
5. Perpetual Existence
6. Common Seal

Incorporated Association: – Under the company act 2013, any of the companies has to be required for registration. Any business organization of persons that are not registered and subsequently incorporated with the Registrar of Companies is not recognized as a company at all.

Separate Legal Entity: – According to the low. any kind of company, which is to be distinct (separate) from its shareholders and members. that’s why they have their own contract, which is deal with their shareholders to enter there. it is also in the eye of the law; the shareholders can sue the company and be sued by the company. (What is the meaning of company).

Limited Liability: – According to the law, the members of the company have limited liability because the company exists as a separate entity. There are some companies limited by guarantee, where the liability of each member is determined by such a guaranteed amount.

Transferability of Shares: – The capital of a company is divided into small components that are called shares. So, shareholders of a public limited company have easily transferred their shares as per the rules laid down in the articles of association. but in the private limited, there are some restrictions placed on the transfer of shares. But the right is not taken away completely.

Perpetual Existence: – In the eye of the law, the company is an artificial person, which exists regardless of the differences in its membership. In simple words, the company is an artificial person, so Death, insolvency, insanity, retirement, etc. these all never affects the company.  It is said, “Members may come, members may go but the company goes forever”.

Common Seal: – The company has its own signature, which is called a common seal. because the company is an artificial person in the eye of law. Putting the common seal on papers relating to the company’s transactions makes them binding on the company. (What is the meaning of company).

In the session on what is the meaning of a company, we will be also discussing the types of company.

The types of a company can be dedicated by the following points.

Types Of Companies Based on The Number of Members

1. Public Limited Company
2. Private Limited Company
3. One Person Company

Types Of Companies Based on The Liability of The Members

1. Companies Limited by Shares
2. Companies Limited by Guarantee
3. Unlimited Company

Other Types of company

1. Limited Liability Company (LLC)
2. Business Corporation
3. Foreign Company
4. Government Company
5. Holding Company
6. Subsidiary Company
7. Associate Company
8. Listed Company
9. Unlisted Company
10. Dormant Company
11. Nidhi Company

Types Of Companies Based on The Number of Members

Public limited company: – According to a public limited company. The public limited company is those types of companies, where required a minimum of 7 members, which is mandatory by the company law, but the maximum number of members they can have been unlimited. These types of companies allow their members’ securities to be listed on a recognized stock exchange, and their shares are freely transferable to others. (What is the meaning of company).

Private limited company: – According to a Private limited company. The private limited company is a type of companies, which has a separate legal entity, owned entirely by a relatively small group of individuals or groups were required a minimum of 2 members, which is mandatory by the company law, but the maximum number of members they can have been 200. These types of companies didn’t allow their members’ shares cannot be publicly traded in stock markets.

One Person Company: – According to (OPC) OPC means a one-person company. The one-person company is a type of company, which is a new category of company introduced to encourage startups and young entrepreneurs wherein only one member is their sole shareholder. These types of companies are separate from sole proprietorships because one-person companies are legal entities distinct from their sole members.

Types Of Companies Based on The Liability of The Members

Companies Limited by Shares: – A company limited by shares is a type of company, which is registered to have the liability of its member limited by its memorandum of association to the amount, if any, unpaid on the shares respectively held by them. A shareholder cannot be called upon to pay more than the amount remaining unpaid on his shares. Shareholder’s assets cannot be called upon for the payment of the liabilities of the company if nothing remains to be paid on the shares purchased by him. Such a company is also known as a “Share Company.”

Companies Limited by Guarantee: – According to the company limited by guarantee. The limited guarantee is those types of company, which is one having the liability of its members limited by the memorandum to such amount as the members are limited to a definite sum stated in the memorandum of association of the company in the event of its being wound up.

Unlimited Company: – According to unlimited company. The members or shareholders of a company, which has no limited liability those types of company are also known as the name of the unlimited company. so, in these types of companies, the liability of the member or shareholders ends when he/she ceases to be a member of that company. (What is the meaning of company).

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