The word ‘company’ in simple terms, may be described to mean a voluntary association of persons who have come together for carrying on some business and sharing the profits there from.
The Companies Act, 1956 does not define a company in terms of its features. Section 3(1)(i) of the Act merely states that “ a company means a company formed and registered under this Act or an existing company as defined in section 3(1)(ii).” Section states that “an existing company means a company formed and registered under any previous Company Law.” In common law, a company is a “legal person” or “legal entity” separate from, and capable of surviving beyond the lives of its members.
But a company is not merely a legal institution. It is rather a legal device for the attainment of any social and economic end. It is, therefore, a combined political, social, economic and legal institution. Thus, the tem company has been described in the many ways. “It is a means of cooperation and organization in the conduct of an enterprise.” It is “an intricate, centralized, economic and administrative structure run by professional managers who hire capital from investor(s).
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