Asked in Incorporation
Independent corporate existence is a outstanding feature of a company.explain?
The outstanding feature of a company is its idependent corporate exitence. A Partnership has no existence apart from its memebers. It is nothing but collection of the partners. A comapny, on the other hand, is in law a person. it is a distinct legal persona exixting independent of its member. by incorporation under the Act, the company is vested with a corporate personality which is distinct from the members who compose it. one of the effects of incorporation is stated in Section 34(2) of the Act. it says that upon the issue of the certificate of incorporation, the subscribers to the memorandum and other persons, who may from time to time be the members of the company, shall be a (body corporate) capable forthwith of exercising all the functions of an in corporated company and having perpetual succession and common seal. Thus the company becomes a body corporate which is capable immediately of functioning as an incorporated individual. The enterprise acuires its own entity. it becomes impersonalised. No one can say that he is the owner of the company. the business now belongs to an institution. the entity of the enterprise becomes institutionalised. in the words of palmer: The benefits following from incorporation can hardly be exaggerated. It in because of incorporation that the owner of the business ceases to trade in his own person. The company carries on the business, the liabilities are the company's liabilities and the former owner is under no liability for anything the company does, although, as principal shareholder, he is able to take full advantage of profits which the company makes. (Mirza Asad Moazzam Baig)