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Companies Act

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THE COMPANIES ACT, 1956
DEFINITION AND NATURE OF A COMPANY

Learning Objectives
At the end of this chapter, you will be able to
• Identify the meaning and nature of a company
• Identify the important characteristics of a company
Introduction
Today, we will begin with the Companies Act that was passed in 1956.
In the lecture of today we will discuss the meaning and nature of a company.
Do you know what do we mean by company?
In simple words, a company can be defined as a group of persons associated together for the purpose of carrying on a business, with a view to earn profits. The word ‘Company’ is an amalgamation of the Latin word ‘Com’ meaning “with or together” and ‘Pains’ meaning “bread”. Thus, a company is nothing but a group of persons who have come together or who have contributed money for some common person and who have incorporated themselves into a distinct legal entity in the form of a company for that purpose.
Section 3(1)(i) of the Act provides that, “a company means a company formed and registered under this Act or an existing company.”
Section 3(1)(ii) lays down that, “ An existing company means a company formed and registered under any of the previous companies laws specified below.”
(a) any Act or Acts relating to companies in force before the Indian Companies Act, 1866 (10 of 1886), and repealed by that Act;
(b) The Indian Companies Act, 1866 (10 of 1866);
(c) The Indian Companies Act, 1882 (6 of 1882);
(d) The Indian Companies Act, 1913 (7 of 1913);
(e) The Registration of Transferred Companies Ordinance, 1942 (54 of 1942); and 40[
(f) An law corresponding to any of the Acts or the
Ordinance aforesaid and in force-
(1) In the merged territories or in a Part B State (other than the State of Jammu and Kashmir), or any part thereof, before the extension thereto of the Indian Companies Act, 1913 (7 of 1913); or
(2) In the

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