What is meant by 'perpetual succession' of a company?

Perpetual succession means a company has continuous existence — it continues to exist even when its members die, become insolvent, or transfer shares. Since the company is a separate legal entity from its members, it is not affected by changes in membership. 'Members may come and members may go, but the company goes on forever.'

What is the difference between a statutory corporation and a government company?

Statutory Corporation is created by a special Act of Parliament (e.g., LIC Act 1956, RBI Act) — has more autonomy, exempt from many government rules. Government Company is formed under the Companies Act with government owning 51%+ shares (e.g., BHEL, SAIL) — governed by Companies Act, must file returns with Registrar of Companies.

What is a prospectus and when is it required?

A prospectus is an invitation to the public to subscribe to shares or debentures of a company. It must contain: company details, purpose of issue, financial information, terms of issue, risk factors. Required for public limited companies issuing shares/debentures to the public. A private company cannot issue a prospectus.

Types of Companies and Public Enterprises

Private, Public and Global Enterprises • Class 11 Business Studies • NCERT • CBSE

Joint Stock Company: Artificial legal person, limited liability, perpetual succession, transferable shares. Private Ltd: 2–200 members, 'Pvt. Ltd.' in name, shares not freely transferable. Public Ltd: Min 7 members, shares listed on stock exchange, 'Ltd.' in name, IPO for public subscription.

Frequently Asked Questions

What is meant by 'perpetual succession' of a company?: Perpetual succession means a company has continuous existence — it continues to exist even when its members die, become insolvent, or transfer shares. Since the company is a separate legal entity from its members, it is not affected by changes in membership. 'Members may come and members may go, but the company goes on forever.'
What is the difference between a statutory corporation and a government company?: Statutory Corporation is created by a special Act of Parliament (e.g., LIC Act 1956, RBI Act) — has more autonomy, exempt from many government rules. Government Company is formed under the Companies Act with government owning 51%+ shares (e.g., BHEL, SAIL) — governed by Companies Act, must file returns with Registrar of Companies.
What is a prospectus and when is it required?: A prospectus is an invitation to the public to subscribe to shares or debentures of a company. It must contain: company details, purpose of issue, financial information, terms of issue, risk factors. Required for public limited companies issuing shares/debentures to the public. A private company cannot issue a prospectus.

Study With GyanAI

GyanAI's AI tutor can answer any question about this topic instantly. Try GyanAI free for step-by-step NCERT solutions aligned with the CBSE curriculum.