A company is an incorporated voluntary association of persons in business having joint capital divided into transferable shares of a fixed value, along with the features of limited liability, common seal and perpetual succession.
This form of organization can into existence due to advent of large scale organization and operations. Mass production, wider scope of coverage, heavy demand both in national as ell as international market, huge investment, cut throat completion and others pose severe restriction on sole proprietor and partnership form of organization to achieve the same.
Thus emerged the new form of organization i.e. company, which day by day become more popular and common because of its numerous advantages.
“A Joint Stock Company is a voluntary association of individuals for profit, having a capital divided into transferable shares, the ownership of which is the condition of membership”
“A Joint Stock Company means, “a company having a permanent paid up or nominal shares capital of fixed amount divided into shares, also of fixed amount, held and transferable as stock and formed on the principle of having for its members the holders of those shares or that stock and no other persons”.
Section 566 of Indian Companies Act, 1956
Justice Lundley defines company as “A company is voluntary association or organizations of many persons who contribute money or money’s worth to a common stock and employs it in some trade or business and who share the profit or loss arising there form.
The common stock so contributed is denoted in money and is the capital of the company. The persons who contribute it are remembers or share holders and proportional capital to which each member is entitled is his share”.
Thus, a company is an incorporated association which is an artificial person created by law, having a common seal and a perpetual succession.