COMPANY ACCOUNTS :

Sole proprietorship is the most common type of business when the size of business is small. Partnership became popular as the size increased. As firms became very big requiring more amount of capital and involving more risks, it lead to the formation of Companies.

A company is an association of persons who contribute money or money’s worth to a common stock (capital), for carrying on business for the purposes of profit. The capital is divided into shares, which are held by the members (shareholders) in any proportion and are
transferable. It is a legal person, and in law exists like an individual, but with no physical existence.

Section 3(1)(i) of the Companies Act, 1956, defines a company as “a company formed and registered under this Act or an existing
company”. An existing company means a company formed and registered under any of the previous Companies Act.