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Simple definition of Company and Company Accounts

>> July 7, 2009

Definition of Company

Company is the voluntary and autonomous association of people . These people invest their money in the form of shares . Total capital of company divides in to shares which are transferable from one person to another person . Company is made for general and specific motive. In other words , " it is artificial person and its board of directors controls company business .
According to Indian Company Act 1956's section 3(1) (i) , " All companies who are formed and registered under this act or any other previous company act . "

From definition , we get idea that Indian Company act accepts only those association of people which are registered under Indian Company act 1956 or any previous act . It has its own personal entity . Members come and go but it is continually operating . It does not affect from the death , madness and insolvency of any member .

Definition of Company Accounts

For showing the revenue and financial performance of company , Accountant maintains company accounts .All company accounts are made in Corporate accounting . We can define it as recording of issue of equity and pref. shares , debentures , bonus and right shares . It is also duty to maintain all routine accounts like sole trade and partnership firm . In normal transactions , we can include purchase , sale , receipt and payment transactions and it is recorded in journal first and after posted it to ledger of Company accounts . Company accounts are also helpful for making company's final account .

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