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Forms Of Business Organization

Question
CBSEENBS11003841
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Explain the following terms in brief:

a) Perpetual succession,
b) Common seal,
c) Karta,
d) Artificial person.

Solution
(a) Perpetual succession
Joint stock company has perpetual succession. Members may come and members may go but the company continuous to exist. Company being a creation of the law can be brought to an end only by the law.
(b) Common seal
Joint stock company being an artificial person operates through its Board of Directors which acts through the common seal.
The common seal is the engraved equivalent of an official signature.
Any agreement which does not have the company seal put on it is not legally binding on the company. 
(c) Karta
Joint Hindu Family business is a specific form of business found only in India.
It refers to a business which is owned and carried on by a member of HUF.
The business is controlled by the head of the family who is the oldest member and is called the Karta.
(d) Artificial person
A joint stock company is a creation of law and exists independent of its members. The joint stock company cannot breathe, eat, run, talk etc. like natural persons but it can own property, incur debt, borrow money etc. like natural person.

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