Reviewed by Jun 10, 2021| Updated on
A business organisation having a separate legal entity, i.e. an identity distinct from its owners, is called a corporation or a company in India. Any corporation can sue or be sued in its own name. It refers to an association of people incorporated to undertake the business activities having a separate legal identity, a perpetual existence and a common seal.
These organisations generally have limited liability, i.e. the liability of the members is limited to the unpaid amount on shares held by the members. The members are not required to contribute anything to the company's debt in case of bankruptcy or insolvency.
A corporation comes into existence when a group of shareholders invest money in exchange for the shares of an organisation to pursue a common goal. These shareholders are the owners of such corporation. The goals can be both profit-oriented or non-profit. However, a significant number of corporations aims to provide the best possible returns to their owners.
All corporations are governed and regulated under the Companies Act, 2013 and its returns are taxed according to the Income Tax Act of India, 1961.
Here are the types of corporations that exist in the present scenarios:
Apart from the list above, corporations are classified into listed, unlisted, and dormant corporations as well.
All the owners or shareholders annually elect a board of directors who look after the day-to-day activities of a corporation. They execute the business plan of the corporation and take all the means to do so. They are bound to take due care of the corporation's assets and liabilities.