🏢 What is a Company? 🏢
Let's learn about companies in a fun and easy way!
A Company is like a big team of people who come together to do business and make money!
It's registered under special rules called the Companies Act (made in 2013).
👥Association of Persons
Think of it like this:
Imagine you and your friends want to start a lemonade business together. You all have the same goal - to make and sell lemonade and earn money. This is called an "Association of Persons"!
Simple Definition: A group of people who join hands to achieve the same goal in business.
📜Companies Act
Just like schools have rules for students, companies have rules too!
The Companies Act 2013 is like a rule book that tells companies:
- How to start a company
- How to run a company
- What they can and cannot do
🆔Separate Legal Entity
Easy Example:
Imagine a company as a robot. Even though people control the robot, the law sees the robot as a separate "person"!
This means the company can:
- Own things (like buildings, cars)
- Sign contracts
- Go to court if needed
Key Point: The company is different from the people who own it!
🤖Artificial Person
A company is called an "Artificial Person" because:
- It's not a real human being
- It has no body or feelings
- But the law treats it like a person!
Think of it like this:
A company is like a character in a video game - it's not real, but it can do things in the game world!
♾️Lives Forever & Limited Risk
Perpetual Existence (Lives Forever)
Companies don't die like people do! Even if the owners change, the company continues to exist.
Example: Coca-Cola company started long ago, but it's still running today!
Limited Liability (Limited Risk)
If you buy shares worth ₹1000 in a company and the company loses money, you can only lose your ₹1000 - not more!
Your house, car, or other things are safe!
🔄Easy to Trade & Official Stamp
Transferability of Shares
Company shares are like trading cards - you can easily sell them to someone else without asking permission from the company!
You just go to the stock market and trade them.
Common Seal
Since a company can't sign papers (it has no hands!), it uses a special stamp called a "Common Seal".
This stamp shows that the document is official and approved by the company.
🎥Watch & Learn More
Video: Understanding Companies Made Simple
This video will help you understand companies even better with visual examples and real-world cases!
❓Frequently Asked Questions
Quick Answers: Everything you want to know about companies!
A company is a group of people who come together to do business. It's like a team that follows special rules to make and sell things or provide services.
Think of a company like a big group project at school. Friends come together, each person has a job, and they work together to create something cool like a science project or a school play!
All companies are businesses, but not all businesses are companies. A company is a special type of business that's registered under the Companies Act and has specific rules to follow.
Because it's not a real human but the law treats it like a person. It can own things and make contracts, just like a person can, but it's created by people, not born naturally.
It means the company is like a separate person in the eyes of law, different from its owners. Just like you are separate from your parents, a company is separate from the people who started it.
Companies can exist for a very long time, much longer than people. They only end when they are officially closed following legal rules, not when owners die or leave.
Limited liability means if you invest money in a company and it fails, you can only lose the money you invested, not your personal things like your house or car. It's like a safety net for investors.
Yes! Anyone who is 18+ years old and follows the legal requirements can start a company. You need to register it with the government and follow the Companies Act rules.
Very easy! Company shares can be bought and sold in the stock market without needing permission from the company or other shareholders. It's like trading cards that you can exchange anytime.
A common seal is like a special stamp that companies use on important documents to show they are official. Not all companies need one - it's optional, but many use it to make documents look more official.
It's like a rule book that contains all the laws that companies in India must follow. It was created in 2013 to make sure companies operate fairly and honestly.
People form companies because they get limited liability (less risk), can easily transfer ownership, and the business can continue even if owners change. It's like having extra protection and flexibility.
Sure! Tata Motors, Reliance Industries, Infosys, and Wipro are famous Indian companies. Internationally, companies like Apple, Google, Microsoft, and Coca-Cola are great examples.
The company itself can be taken to court and punished, just like a person would be. The owners are usually protected because the company is a separate legal entity.
Both have advantages! Starting a company gives you freedom and potential for big profits but comes with risks. Working for a company gives you steady income and less risk. It depends on your goals and personality!