Question

What is meant by the word ‘Company’?

Answer 1

Section 3 (1) (i) of the Companies Act of 1956 defines an organisation as a company that is formed and registered under the Act or any existing company that is formed and registered under any earlier company laws. In general, a company is an artificial person, created by law that has a separate legal entity, perpetual succession, a common seal and limited liability. It is a voluntary association of persons who together contribute capital to the company to conduct business. Generally, a company’s capital is divided into small parts known as shares, the ownership of which is transferable, subject to certain terms and conditions. There are two types of companies, public and private.