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 Companies Act, 1956 Meaning and Definition of a Company - Section 3(1)(i) of the Companies Act, 1956 defines a company as: ―a company formed and registered under this Act or an existing Company‖. ‗Existing Company‘ means a company formed and registered under any of the earlier Company Laws.  Characteristic Features Separate Legal Entity Case: Salomon v. Salomon & Co. Ltd. Limited Liability However, liability of a company is never limited. It‘s liability of members only that is limited. Free Transferability of Shares Other Features: Perpetual Succession: Separate property and Common Seal.  4. Types of Companies 1-Private Company. 2- Public Company.  Private Company:- [Section 3(1)(iii)] A private company means a company which has a minimum paid up capital of one lakh rupees or such higher paid-up capital as may be prescribed and by its articles : ( a ) restricts the right to transfer its shares, if any; (b) limits the number of its members to 50, not including:- (i) persons who are in the employment of the company, and (ii) persons who, having been formerly in the employment of the company, were members of the company while in that employment and have continued to be members after the employment ceased; prohibits invitation to the public to subscribe for any shares in or debentures of, the company; and (d) prohibits any invitation or acceptance of deposits from persons other than its members, directors or their relatives. Where two or more persons hold one or more shares in a company jointly, they shall, for the purposes of membership, be treated as a single member.

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