The following are the characteristics of the company:
- Incorporated Association: Under the Companies Act, a company must be registered or incorporated. The minimum numbers of persons required for incorporation are seven in case of public co. and two in case of private company.
- Artificial person: It is an artificial legal person enjoying same rights and owing same obligation as a nature person.
- Separate Legal Entity: A company is separate and distinct from the persons who constitute it.
- Limited Liability: the liability of its members is limited to the unpaid value of the shares held by them or guarantee given by them.
- Separate Property: Company is entitled to own and hold property as distinct from its members.
- Transferability of Shares: Shares of the company are freely transferable which makes the life of the company independent of the lives of its members.
- Perpetual Existence: A company being an artificial judicial person, it is not affected by the death, insolvency or retirement of the members. Members may come and members may go out but the company can go on forever.
- Common seal: Common seal is the official signature of the company because a company cannot sign like a natural person.
- Company may sue and be sued in its own name: One of the consequences of separate legal entity is that a company may sue and be sued in its own name.
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