Forms of company. Advantages and disadvantages of incorporation

to achieve some common objective. In its legal sense, the

term company, as per the Companies Act, 2013, under section 2(20), is defined as “a company incorporated under the Companies Act 2013 or any previous company law.”

transferable shares
delegated management under a board structure
investor ownership

Separate Legal Entity: 

Company has Perpetual Succession

Can own Separate Property

Capacity to sue and be sued

Easier access to Capital

is independent and separate from its members, and the members

cannot be held liable for the acts of the company, even when a particular member owns majority of shares. This was held in the case of  Salomon v Salomon & Co. Ltd. (1897) AC 22.

existence, which means that a company never dies, even if

the members cease to exist. The membership of a company changes from time to time, but that has no effect on the existence of the company. The company only comes to an end, when it is wound up according to law, as per the provisions of the Companies Act, 2013.

a separate legal entity in the eyes of law, it

can hold property in its own name and the members cannot claim to be the owner of the companies property(s). The Supreme Court, in the case of Bacha F. Guzdar v CIT Bombay stated that a company being a legal person, in which all its property is vested and by which it is controlled, managed and disposed of a member cannot, ensure the companies property on its own name.

of suing a person or being sued by another person

in its own name. A company, though can be sued or sue in its own name, it has to be represented by a natural person and any complaint which is not represented by a natural person is liable to be dismissed in the same way in which an individual complaint is liable to be dismissed in the absence of the complainant.

since a corporation can issue shares of stock. This may

make it easier for your business to grow and develop. If the in the market for a bank loan, that’s another reason to incorporate, since n most cases, banks prefer and easily lend money to incorporated business ventures.