Explain clearly the concept of “Perpetual Succession” and “Common Seal” in relation to a company incorporated under the Companies Act, 1956


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Unlike a natural person a company never dies. It is an entity with a perpetual succession. The life of the company does not depend upon the life of any of its members; it is independent from the lives of its members. Even the death, insolvency, mental disorder or retirement of a member does not affect the corporate existence of the company. it is created by the process of law and can be put to an end only by the process of law. Members may come and go out the company will carry on to exist unless it is wound up. The companies continuous to exist even if it’s all members are dead.

A company is of perpetual succession in the sense that inspite of the change in the membership of the company it persist to exist.

Common Seal: Since a company has no physical existence, it cannot sign its name on a contract. So it takes the help of the seal which is used as a substitute for its signature. Every company must possess their own seal with its name engraved on it. It acts as the official signatures of the company. the documents that do not bear the common seal, of the company do not bind the company.


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