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Justify the following statement:

The company has a distinct feature of separate ownership and management.

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1 Answers

  • The company has a unique feature of separate ownership and management.
  • Shareholders are its owner and Directors are its managers.
  • Being an artificial person, it needs a human agent to manage and control the working of the company.
  • Shareholders are scattered all over therefore management of the company by them is not possible.
  • Also, the shareholders are not interested in the management of such a big organization.
  • The company as an artificial person having no physical existence needs humans to control its affair.
  • Thus, the company has a distinct feature of separate ownership and management.

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