15 Important Features of a Company

by Shamsul
Important Features of a Company
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A company is an association of persons with the primary motive of doing business.  It’s a corporate enterprise having its own legal entity apart from the individuals who are in it.

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


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


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 to be fulfilled for a company registration. The existence of Directors, shareholders, capital and members are also prerequisites for a company registration.

#3 Follow Rules and Regulations

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

The company run by a Board of Directors, Directors, and managers. They appoint a management as Acts and Articles of Association of a company’s. It’s a hierarchy which starts from Board of Directors to an employee working on minimum wage.

Management Cotract

#6 Ownership Separate from Management

In most cases, the shareholders despite being the owners don’t run the day to day affairs of the company. 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 while in some they choose the right person for the right job.

#7 Multiple Ownership

For establishment of a company, many individuals can have equal percentage ownership or on an agreed percentage among a large group of people. As per 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, the seal of an organization acts as its signature in the courts of law. The seal acts as assent to any contract or document and without it, these would not be legally binding.

#9 Transfer of Shares

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

Features of a Company

#10 Minimum Liability.

The liability of the company’s members is limited to the value of shares held by them. It Implies that if assets fall short of its liabilities the partners would be secure. 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 private properties of members  are on stake and they can claim of 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

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

Features of a Company

#13 Registered Office

A company when registered needs to provide an address which would act as its office and they 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, maintaining proper records and account books.

#15 Social Duties

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



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