Question

In terms of legal rights, what is something that an individual can do which a company cannot do?

Answer 1

A Company is an Artificial legal entity distinct from its members,thus, the affairs of the company are practically done by the Board of the Directors.So, Practically Company can not do any activity and its every single activity is done by Group or Collections of person who takes decision on behalf of the Company called,"Board of Directors".

However some decisions only Company have to take and it can not be totally relied upon "Board of Directors", so those crucial decisions (Like Auditors appointment,Dividend declaration,Financial activities say Liquidation,Loan,Borrowing which are beyound Boards power) are taken by Shareholders , who has invested or are real owners of the Company. All decision taken by Shareholdrs normally callled as Company decision and others are called as Board decision.

The Board of dircetors in carrying out day to day affairs of the company has to perform role within limited powers and the powers, which are granted to them.Certain powers can be excersised by the Board of their own and some with consent of the company at the general meeting .The Shareholders or owners of the Company ratify the actions of the Board at the meeting of the company.

Following actviries are generally done by Board as its involve time and which evry individual shareholders can not do,However these decision are finally ratified by the all shareholders in the meeting, if the decision is beyond the Boards power. Power of the Board is grnated by Company law, Artcile of Association and Customery practice in the country.

• Make calls on shareholders
• Authorise the buyback of securities and shares
• Issue securities and shares
• Borrow monies
• Investing the funds
• Grant loans
• Approve the financial statement
• Approve amalgamation/merger
• Diversify the business
• Take over a compan
• Making political contributions
• Appointing or removing key managerial personnel.
• Appointing internal auditors and secretarial auditors.