Meaning of company

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Querist : Anonymous

Querist : Anonymous (Querist)

10 October 2014 Hello i am ca cpt student. i was read the meaning of company that company is an association of person and registered under companies act . it exist only in the eyes of law as it is invisible ,intangible and legal person only. company is body of person to whom act gives legal personality. so how we can say it is person exist only in the eyes of law as it is the association or body of person which is actually exist ,means not invisible and company is the body of person.

@VaibhavJ

@VaibhavJ (Expert)
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11 October 2014 well said..

However when you say XYZ ltd. then you are not referring to living being but to an artificial legal entity.

Thanks

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Querist : Anonymous

Querist : Anonymous (Querist)

11 October 2014 Ok it means any person other than natural person ,i.e.,company,LLP,co-operative society and any other body corporate is artificial legal person and exist only in the eyes of law..am i right Mr.vaibhav...??

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Querist : Anonymous

Querist : Anonymous (Querist)

12 October 2014 Ok it means any person other than natural person ,i.e.,company,LLP,co-operative society and any other body corporate is artificial legal person and exist only in the eyes of law..am i right Mr.vaibhav...??

Querist : Anonymous

Querist : Anonymous (Querist)

Asha Kanta Sharma

Asha Kanta Sharma

(Expert)
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03 August 2024 Your understanding is correct, and your question touches upon fundamental concepts in company law. Here's a more detailed explanation to clarify the meaning of a company and the concept of artificial legal persons:

### **Meaning of a Company**

**Definition:**
A company is a form of business organization that is legally recognized as a separate entity from its owners. It is created under the Companies Act or equivalent legislation in various jurisdictions.

**Key Characteristics:**
1. **Legal Personality:** A company has its own legal identity distinct from its owners (shareholders) and managers (directors). This means it can own property, enter into contracts, and sue or be sued in its own name.
2. **Incorporation:** It is formed by a process called incorporation, which involves registration under relevant company law, such as the Companies Act in India. This process grants the company its legal status.
3. **Separate Existence:** Although a company is composed of individuals (shareholders and directors), it exists independently of them. This means that the company's existence continues regardless of changes in its membership or management.

### **Artificial Legal Person**

**Definition:**
An artificial legal person is an entity that is created by law and recognized as having rights and responsibilities similar to a natural person (a human being). These entities can include companies, limited liability partnerships (LLPs), cooperatives, and other bodies corporate.

**Key Points:**
1. **Legal Existence:** Unlike natural persons, artificial legal persons do not have a physical form or biological existence. Their existence is purely legal and defined by the statutes under which they are created.
2. **Rights and Obligations:** Artificial legal persons can own assets, incur liabilities, enter into agreements, and be subject to legal actions, just like natural persons.
3. **Examples:** Examples of artificial legal persons include:
- **Companies**: Incorporated entities that can be public or private.
- **LLPs**: Limited liability partnerships that combine features of partnerships and companies.
- **Cooperatives**: Organizations owned and operated by a group of individuals for their mutual benefit.
- **Other Bodies Corporate**: Entities like municipal corporations and statutory corporations created by specific legislation.

### **Summary**

- **Company:** A company is a type of artificial legal person that is created under company law. It is a separate legal entity with its own rights and obligations, distinct from its shareholders and directors.
- **Artificial Legal Person:** This term refers to entities created by law with legal rights and responsibilities, including companies, LLPs, cooperatives, and other bodies corporate. These entities exist in the eyes of the law and are recognized as having legal personality without a physical form.

Your understanding that a company, as an artificial legal person, exists only in the eyes of the law while being made up of actual individuals is accurate. The company itself is intangible and does not have a physical presence, but it operates through its human representatives and legal framework.