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Chapter: 12th Accountancy : Company Accounts

Company Accounts | Accountancy | Study Material, Lecturing Notes, Assignment, Reference, Wiki description explanation, brief detail |

Characteristics of a company

Following are the characteristics of a company:

Characteristics of a company

Following are the characteristics of a company:

Voluntary association: A company is a voluntary association of persons. No law can compel persons to form a company.

Separate legal entity: Company is an artificial person. It has a separate legal entity which is separate and distinct from its members.

Common seal: A company may have a common seal which can be affixed on the documents.

Perpetual succession: A company continues for ever. Its continuity is not affected by the changes in its members. It can be wound up only by law.

Limited liability: The liability of the shareholders of the company is limited to the extent of face value of the shares held by them.

Transferability of shares: The shares of a company are freely transferable except incase of a private company.

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