298. 299. 300. Capital divided into transferable shares ;The capital of a company is divided into a number of shares. each share is transferable .that means a shareholder can sell his interests in the company to another person without getting the consent of other shareholders .of course ,it is true that there are certain restrictions in the transfer of shares in the case of a private company. 55
301. 1. Common seal 302. Since a company is a separate entity it will be necessary for it to sign papers and documents .such signature is embodied in the common seal of the company .the seal is kept under the safe custody of some responsible official so as to avoid its misuse . 2. Long life 303. it enjoys continued existence. The death or retirement of any member cannot affect the running life of the company. it life separates from its members. its business continues until it is wound up by the provision of the company ordinance. therefore ,it is known as PERPETUAL SUCCESSION. 304. 4. Members cannot bind a company by their acts . 305. Members of a company are not entitled to bind it by their acts.third parties are expected to know the powers granted to each shareholder.they have also to see that the acts are in strict the regulations of the company. 5 centralised management 306. Individuals members of a company are not entitled take part in the management of the business. it is managed by a representative body known as the board of directors .members to the board of directors are elected by the members of the company. 307. 6. Limited liability 308. Another important feature is the limited liability of the shareholders .each share holder is liable only to the amount of capital contributed by him an to settle the debts incurred and other business obligations of the company.this is a prominent distinctive feature from other forms of business obligations of company .this is a prominent distinctive feature from other forms of business organisaions.this follows from the fact a company is a legal entity separate from the shareholders. 6 Number of members. 309. There are large numbers in the joint stock company.in the case of public company,minimum numbers is seven and there is no restriction for the maximum numbers.in case of aprivate company , minimum number of members is two and is fifty. 310. 7. Transferability of shares 311. The shares of the public company is transferable.this type of shares may easily be purchased or sold in the stock exchange market.but members of partnership form of business cannot freely transfer their shares to another person. 8. Object 312. The basic object of the formation of the joint stock company is to earn profit .while profit is not distributed among the share holders but some portion of profit is transferred to reserve fund.so that it may be used at the time of emergency.
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- Fall '19