Definition and Features of a Company
Chapter notes, video classes, MCQ practice tests and quick-revision one-liners for Banking Regulations and Business Laws — CAIIB.
One-liners from this chapter
Free sample — 8 of 65 rapid-fire Q&A cards.
How does the Companies Act, 2013 define a 'company'?
Under Section 2(20) of the Companies Act, 2013, a company means a company incorporated under this Act or under any previous company law.
What is the minimum paid-up share capital required for a public company under Companies Act, 2013?
No minimum prescribed; amount as per MOA.
What is the principle of 'separate legal entity' in company law?
A company is treated as a legal person distinct from its members, meaning it can own property, enter contracts, and sue or be sued in its own name, as established in Salomon v. Salomon & Co. Ltd. (1897).
What is the maximum number of members allowed in a private company?
Maximum 200 members (excluding employees).
What does 'perpetual succession' mean in the context of a company?
Perpetual succession means the company continues to exist regardless of changes in its membership — death, insolvency, or transfer of shares of any member does not affect the company's existence.
What is the minimum number of directors required for a public company?
Minimum three directors required.
What is meant by 'limited liability' as a feature of a company?
Limited liability means the liability of each member is limited to the unpaid amount on their shares, and personal assets of members cannot be used to satisfy company debts beyond that.
What is the minimum number of directors required for a private company?
Minimum two directors required.
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