Company has been outlined as an association of a number of persons formed for some common purpose and registered as per the provisions of the law relating to company. The Companies Act, 1956 defines a Company as an existing company or formed and registered under this Act. Such a Company is regarded as a person having specified rights and obligations as the law confers on it a distinct legal personality with perpetual succession and a common seal. A corporation or a company established by an enactment is called a Statutory Corporation, such as Industrial Finance Corporation, Life Insurance Corporation of India, Reserve Bank of India, etc. The first step towards formation of a company is registration. A company is formed on the basis of a voluntary association of the members. An act of a shareholder in individual capacity cannot bind the company. A company must have capital, a registered office and a common seal. Generally, the liabilities of a shareholder of a company are limited. The individual shareholders are not liable to the creditors of the company. A company is bound to follow the statutory obligations regarding management, such as, filing balance sheets, maintaining proper account books, registers, etc.
