15 Important Features of a Company

by Shamsul
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15 Important Features of a Company

What is a Company

A company is an association of persons with the primary motive of doing business.  It’s a corporate enterprise with its own legal entity apart from the individuals in it.

It could be of various types, the most common being Corporations, General partnerships, Limited Liability Companies (LLC) and sole proprietorship companies.

It has many features and this article will focus on some of a company’s most common and important features.

15 Important Features of a Company

#1 Company Has a Separate Legal Entity

A country’s law and courts recognize the legal status of a business corporation. In this regard, it’s implied that the actions of its members will not hold the company liable for those. It has to abide by the laws of the land and by being an entity can have its own assets.

#2 Incorporation/Registration

A working entity can only come into existence after the registration. A certain set of requirements is to be fulfilled for company registration. The existence of Directors, shareholders, capital and members are also prerequisites for a company registration.

#3 Follow Rules and Regulations to Register a Company

Once registered a company is treated as an individual. It needs to obey the laws, can own and sell properties; it can sue others if its rights are infringed.

#4 Perpetual Existence.

A company is everlasting; no departure or retirement of its members can affect its existence and continuity. It comes to an end only when it liquidates; until then it lives on.

#5 Management of the Company

A Board of Directors and managers runs the entity. They appoint management as Acts and Articles of Association of a company. It’s a hierarchy that starts from the Board of Directors to an employee working on minimum wage.

Company Contract

#6 Ownership Separate from Management

In most cases, the shareholders despite being the owners don’t run the day to day affairs of the business. They hire or select a member of their choice to run the company business fluently. In some companies, a shareholder cannot become a part of the management; in others, they choose the right person for the right job.

#7 Multiple Ownership of a Company

For the establishment of a company, many individuals can have an equal percentage of ownership or an agreed percentage among a large group of people. As per the Companies Act, a private business organization can have members ranging up to Fifty numbers. No fixed cap is necessary on the number of members in a public business organization.

#8 Company Seal

A business entity despite being a legal entity cannot sign for itself as it’s not a person. In this case, an organization’s seal acts as its signature in the courts of law. The seal acts as assent to any contract or document; without it, these would not be legally binding.

#9 Transfer of Shares

Shares are the units of ownership of a business. They divide the shareholders of the company. In a public entity, the transfer of shares is possible without any restrictions. Private companies, however, impose few restrictions on shares transfer by their members.

Features of a Company

#10 Minimum Liability of a Company

The liability of the company’s members is limited to the value of shares held by them. It implies that the partners will be secure if assets fall short of their liabilities. They will not be responsible to pay anything more than the unpaid amount on the shares held by them. It’s unlike a partnership where the private properties of members are at stake and they can claim the company’s creditors.

#11 Voluntary Association

When forming a company the persons involved come together for a common goal on a voluntary basis. They form with the help and consent of the other members.

#12 Capital Investment of the Company

One of a company’s most important features is capital investment. Any entity cannot work without capital. It is the responsibility of the business owner to generate investment by himself or from other partners of the group.

Features of a Company

#13 Registered Office

When registered, a company needs to provide an address that would act as its office and should carry out all the work from there.

#14 Statuary Obligations

This is the responsibility of management that they should meet the obligations within a company. The most common being the filing of balance sheets, and maintaining proper records and account books.

#15 Social Duties

Similar to the responsibilities of a state towards its people, a company has responsibilities towards society and its employees.


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