A company has following features : A. Separate Legal Entity B. Body C…

A company has following features :

A. Separate Legal Entity

B. Body Corporate

C. Unlimited Liability

D. Cannot sue or be sued

E. Common Seal

Choose the correct answer from the options given below :

Answer & explanation

Correct answer: option 4

The correct answer is Option (4) → A, B and E only

(A) Separate Legal Entity – true. The company exists apart from its members and can own property and make contracts in its own name.

(B) Body Corporate – true. It is formed and registered under the law.

(C) Unlimited Liability – not a feature. A member’s liability is limited to the unpaid amount on his shares.

(D) Cannot sue or be sued – not a feature. Being a legal person, a company can sue and be sued in its own name.

(E) Common Seal – true. The company signs through its own common seal.

NCERT (2026-27 edition):
Separate Legal Entity – “… A company has a separate legal entity which is distinct and separate from its members. It can hold and deal with any type of property. It can enter into contracts and even open a bank account in its own name.”

NCERT (2026-27 edition):
Body Corporate – “… A company is formed according to the provisions of Law enforced from time to time. Generally, in India, the companies are formed and registered under Companies Law except in the case of Banking and Insurance companies for which a separate Law is provided for.”

NCERT (2026-27 edition):
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):
May Sue or be Sued – “… A company being a legal person can enter into contracts and can enforce the contractual rights against others. It can sue and be sued in its name if there is a breach of contract by the company.”

NCERT (2026-27 edition):
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. Any document which does not carry the common seal of the company is not binding on the company.”