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    Question

    Which of the following statements does not represent a

    true characteristic of a company under the Companies Act, 2013?
    A It is an incorporated association. Correct Answer Incorrect Answer
    B It is regarded as an artificial legal person created by law. Correct Answer Incorrect Answer
    C It enjoys perpetual succession. Correct Answer Incorrect Answer
    D It has a limited life span dependent on its members. Correct Answer Incorrect Answer
    E It possesses a separate legal identity from its shareholders. Correct Answer Incorrect Answer

    Solution

    A company, once incorporated under the Companies Act, 2013 (or earlier laws such as the Companies Act, 1956), acquires certain defining features: • It is an incorporated association, formed through registration. • It is considered an artificial person created by law, capable of holding property, entering into contracts, and suing or being sued. • It has a separate legal entity distinct from its shareholders. • It enjoys perpetual succession, meaning the death, insolvency, or exit of members does not affect its continuity. However, the idea of a “limited life span” is not a feature of a company, since companies continue to exist until legally wound up.

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