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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: тАв It is an incorporated association, formed through registration. тАв It is considered an artificial person created by law, capable of holding property, entering into contracts, and suing or being sued. тАв It has a separate legal entity distinct from its shareholders. тАв It enjoys perpetual succession, meaning the death, insolvency, or exit of members does not affect its continuity. However, the idea of a тАЬlimited life spanтАЭ is not a feature of a company, since companies continue to exist until legally wound up.

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