The Companies Act, 2013 - Corporate Characteristics

Vocabulary flashcards detailing key corporate law concepts from The Companies Act, 2013, including property ownership, perpetual succession, limited liability, and relevant case law.

Separate Property Ownership

The legal capacity of a company to own, enjoy, and dispose of property in its own name, establishing that shareholders are neither private nor joint owners of the company's capital and assets.

Insurable Interest

A legal right or interest in an asset that a company member does not hold with respect to the company's property, barring members from recovering insurance for company assets insured under their own names.

Macaura Vs. Northern Assurance Co. Limited (1925)

A landmark case ruling that an individual who held nearly all shares and was a major creditor could not claim insurance compensation for destroyed company timber insured in his own name, as shareholders have no legal or equitable interest in company property.

Perpetual Succession

The principle that a company's existence continues uninterrupted regardless of the death, insolvency, or retirement of its members, continuing until it is formally wound up on grounds specified by the Act.

Artificial Person

An entity brought into existence by the operation of law, whose life and legal existence can only be ended by the law itself.

Limited Liability

A corporate condition where company debts do not become the personal debts of the shareholders, restricting a member's liability solely to the nominal or unpaid value of their shares.

Creditors of the Company

The specific parties who are legally entitled to sue the company for its debts, as opposed to its members who cannot do so.