COMPANY LAW-I

STUDY MATERIAL

This study Material is Prepared by

Dr. Pradip Kumar Das, CUSB,
for the students
Nature and characteristics of Company
1. Corporate Personality or separate legal entity:
Company has a separate corporate
personality/separate legal entity which is different
from its members/shareholders/subscribers to the
memorandum;
This has been established from various judicial
decisions, e.g.
a. FOSS vs. HARBOTTLE(1843) 67ER 189
b. KONDOLI TEA CO. Ltd, Re(1886)I.L.R. 13 Cal.43;
 Nature and characteristics of
Company(Contd.)
c. SALOMAN vs. SALOMAN & CO. Ltd(1897) A.C. 22
d. LEE vs. LEE’s AIR FARMING Ltd.(1961) A.C. 12(PC)

2. Limited Liability:
(a). Company Limited by Shares &
(b). Company Limited by Guarantee

In the case of company limited by shares, the liability of

members is limited to the payment of full value of
shares.
 Nature and characteristics of
Company(Contd.)
In the case of company limited by guarantee, the
liability of members is limited to a specified amount
mentioned in the memorandum as guaranteed
amount.

3. Perpetual Succession:
Company is unaffected by the death/departure of any
member and remains the same entity, despite total
change in the membership.
 Nature and characteristics of
Company(contd.)
A company’s life is determined by
MOA(Memorandum of Association).

As per Prof. L.C. B. Gower- Members may come and

go, but the company can go on for ever.

4. Separate Property:
 A company is capable of owning, enjoying and
disposing of property in its own name.
 Nature and characteristics of
Company(contd.)
 Relevant Cases:
(a). R.T. Perumal vs. H. John Deavin, AIR 1960 Mad.43
(b).Gramophone and Type Writer Co. vs.
Stanley(1906)2 K.B. 856;
(c). Mrs. Bacha F. Guzdar vs. The C.I.T., Bombay, A.I.R.
1955 S.C. 74.
5. Transferability of Shares:
Company's shares are transferable from one person to
another.