The following are some of the features of a company:
- Legal entity: A company is a legal entity, which means that it is separate from its owners. This means that the company can own property, sue and be sued, and enter into contracts in its own name.Limited liability: The liability of the owners of a company is limited to the amount of their investment in the company. This means that the owners are not personally liable for the debts of the company.Transferability of shares: The shares of a company are freely transferable. This means that the owners of shares can sell their shares to other people without the consent of the other shareholders.Perpetual succession: A company has perpetual succession, which means that it continues to exist even if its members change. This is because the company is a legal entity that is separate from its members.Common seal: A company has a common seal, which is a physical stamp that is used to authenticate the company’s documents.
Multiple Choice Questions
- Which of the following is not a feature of a company?
- Legal entity.Limited liability.Transferability of shares.Perpetual succession.
The answer is common seal. The common seal is not a feature of all companies. Only certain types of companies, such as corporations, have a common seal.
- A company is formed by two persons. Is it a private company or a public company?
It is a private company. Private companies are limited to a maximum of 50 members.
- A company offers its shares to the public. Is it a private company or a public company?
It is a public company. Public companies are allowed to offer their shares to the public.Answers
- Common seal.A private company.A public company.