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Home » Business » 16 Important Features of a Company

16 Important Features of a Company

September 14, 2019 | By Hitesh Bhasin | Filed Under: Business

A company is a body which is established by people for business purposes and registered under the company act law. A company is considered as an artificial legal individual having legal status and entity.

A company can be different types such as public or private company, limited or unlimited company. Click here to learn about the different types of companies.

A company has various features. In this article, you will learn about the different features of a company in detail.

Table of Contents

  • Features Of A Company
  • #1 A Legal Entity
  • #2 Incorporated association
  • #3 Voluntary Participation
  • #4 Everlasting existence
  • #5 Capacity to get into a contract
  • #6 Limited liability of shareholders
  • #7 Common Seal
  • #8 A company can be a trustee
  • #9 Owns property
  • #10 A registered place
  • #11 Capital
  • #12 Transferability of shares
  • #13 Ownership and management can’t be merged
  • #14 Artificial citizen
  • #15 A company can be held responsible for criminal activities
  • #16 Social responsibilities

Features Of A Company

16 Important Features of a Company

#1 A Legal Entity

A company is considered as an individual who separates it from the people who made the company.

Like all other citizens of a country, a company also has rights and duties bestowed by the law of the country but does not have fundamental rights. Therefore, a company can do business, own properties, and own other assets. A company remains a separate entity, even it is owned by a single person or has many shareholders.

A company can get a loan and is also liable to pay taxes to the government where it operates.

#2 Incorporated association

A company becomes a legal entity when it is registered under the Companies Act. All the requirements are needed to be fulfilled to get the legal status for a company. In addition to this, all other requirements, such as share capital, shareholders, and directors, etc. are required to be fulfilled to register a company legally.

However, there is no need to register a company in partnership, but there will always be a few legal benefits that the company will be deprived of.

#3 Voluntary Participation

A company is established by the voluntary participation of all the members of a company. The capital investment made by each member is completely voluntarily.

#4 Everlasting existence

A company has a legal identity separate from its shareholders, owners, directors, and employees. The existence of a company does not get affected by the existence of people associated with the company. The company will exist even after the people who established the company.

Also Read  Business Model of a Company- How Companies Make Money!

#5 Capacity to get into a contract

Capacity to get into a contract

 

A company being an identity has the capacity to get into contract. A company cannot be bind by the shareholders of the company in any way. People can do business with the company by getting into a contract with it, or they can also get into contract to work as employees of the company.

#6 Limited liability of shareholders

The shareholders of a company have limited liability in the company. The shareholders of the company will not be executed in case the company goes bankrupt. It will be credited from the assets of the company itself.

#7 Common Seal

A company is an artificial person has its seal, which is equivalent to the signature of an individual. The common seal of the company will make that document legally binding by the company and will provide a proof for the authenticity of the document.

#8 A company can be a trustee

Like a person, a company can also work as a trustee. However, it requires approval from the legal body associated with the legal work in order to act as a trustee.

#9 Owns property

Like an individual, a company can also own property and assets on its own name. The members or shareholders of a company can make their claim on the assets of the company once the company is shut down permanently.

#10 A registered place

It is necessary for a company to have a legally registered place or office to act as a company. For example, companies like Apple and Nike have started their business in a small room like a place which was registered as the office at the name of the companies.

#11 Capital

Capital

 

Another important feature of a company is the capital. A company can’t exist without capital. The capital of the company can be provided by a single person or by several members.

#12 Transferability of shares

The shares of a company can be transferred easily from one shareholder to another shareholder. With the transferability of the shares, the ownership of the individual in the company also gets transferred. It is easy to transfer the share of a public company, but there are a few restrictions in the transferability of the share of a private company.

Also Read  What is Business Structure? Common Business Structures Explained

The whole share market works on the transferability of the shares from one person to another.

#13 Ownership and management can’t be merged

The people who own the shares of a company have their own in the company. A person who holds even one share of a company is the owner of the company. Shareholders and the management of a company should not be mixed as there can be a large number of shareholders of a company. However, shareholders play an important role in the appointment of the management of the company.

They appoint a director and senior managers of the company with the agreement and the management work to achieve the goals and objective set by the owners or the shareholders of the company. However, the recruitment of department-level managers and employees is the job of management.

#14 Artificial citizen

Artificial citizen

 

A company being an artificial citizen of the country in which it operates has the duty to pay taxes and abide by other rules and regulations, but it does not have fundamental rights real citizens of a country. for example, a company can’t vote to elect the political leader of a country whereas a real citizen can.

#15 A company can be held responsible for criminal activities

A criminal case can be filed against a company. However, a representative of the company is required to represent the company in the courtroom at the place of the company.

#16 Social responsibilities

Like other responsible citizens of a country, a company also has duties and responsibilities towards the society it exists and for the employees and workers who work for it.

Liked this post? Check out the complete series on Business

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About Hitesh Bhasin

Hitesh Bhasin is the Founder of Marketing91 and has over a decade of experience in the marketing field. He is an accomplished author of thousands of insightful articles, including in-depth analyses of brands and companies. Holding an MBA in Marketing, Hitesh manages several offline ventures, where he applies all the concepts of Marketing that he writes about.

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