Which of the following is not a feature of a Company?

Answer & explanation

Correct answer: option 4

The correct answer is Option (4) → The company being an artificial person, can sign its name by itself.

A company is an artificial person created by law. It can own property and make contracts, but it has no hand to sign with. That is why every company has a common seal, which acts as its official signature.

Option (1) A company is formed according to the provisions of Law enforced from time to time. — A feature of a company. This is the “body corporate” feature: companies are formed and registered under company law.
Option (2) A company has a separate legal entity which is distinct and separate from its members. — A feature of a company. The company can hold property and open a bank account in its own name.
Option (3) The liability of the members of the company is limited to the extent of unpaid amount of the shares held by them. — A feature of a company. A member who has paid fully for his shares owes nothing more.

NCERT (2026-27 edition):
Features of a Company – “… Body Corporate: A company is formed according to the provisions of Law enforced from time to time.”

NCERT (2026-27 edition):
Features of a Company – “… Separate Legal Entity: A company has a separate legal entity which is distinct and separate from its members.”

NCERT (2026-27 edition):
Features of a Company – “… Limited Liability: The liability of the members of the company is limited to the extent of unpaid amount of the shares held by them.”

NCERT (2026-27 edition):
Features of a Company – “… Common Seal: The company being an artificial person, cannot sign its name by itself. Therefore, every company is required to have its own seal which acts as official signatures of the company.”